Alcohol Tax Pits Supporters Against Liquor Industry


ANNAPOLIS (March 10, 2010)—Supporters of a dime-a-drink tax told a Senate committee Wednesday they need the fee in order to provide essential funds for mental health, disabilities and substance abuse programs to Marylanders. But opponents claimed the alcohol tax would deprive retailers of their livelihood in the midst of an economic recession.

The Lorraine Sheehan Health and Community Services Act of 2010, which was presented to the Senate Budget and Taxation committee, would tax each drink of alcohol an extra 10 cents.

The proceeds of the tax would go towards health care, substance abuse treatment and prevention, and developmental disabilities support, or into the state's general fund.

The alcohol tax is supported by mental health advocates who have held multiple rallies and events during the legislative session.

"This is not laundry soap," said David Jernigan, a professor at the Bloomberg School of Public Health at Johns Hopkins University. "This is a product that has a special tax on it because it brings a special burden on society."

The tax would lessen problems with alcohol and raise $214.4 million in the first year for disabilities services and other Department of Health and Mental Hygiene programs, according to an analysis by Jernigan and colleague Hugh Waters.

These programs lost $56 million in funding over the past 14 months.

One third of 15- to 20-year-olds' deaths in Maryland and 1,278 deaths in the state overall are due to alcohol, according to the Hopkins analysis. The paper also estimates 313,000 Marylanders could "fit the criteria for alcohol dependence or abuse."

"Taxes on alcohol still don't come anywhere near the costs that alcohol brings on society," said Jernigan. "Here in Maryland alcohol costs between $3.5 and $5.2 billion a year in social costs, health care, and so on. The alcohol tax pays less than one half of one percent of that at this point."

Opponents said this was the wrong time for the alcohol tax. They said the industry is still recovering from the economic recession and federal tax increases.

Currently, 40 percent of a $13.99 bottle of liquor is federal and state taxes. Under the new proposal, taxes would be $9.62 or 54 percent of the bottle's cost, bringing the final cost to $17.99.

The alcohol industry insisted that Maryland would be losing revenue and "good workers" would be hurt.

Former Gov. Marvin Mandel, who said he was at the hearing representing alcohol interests, reminded the committee of the "trade wars" with Washington that occurred while he was in office. Mandel said that Maryland and the District agreed to keep their alcohol taxes the same so they wouldn't steal each others' business.

"It's not a coincidence we have the same (tax)," said Mandel.

Supporters of the tax pointed to an OpinionWorks poll released March 1 showing that 71 percent of Maryland voters favor the bill if the money goes towards substance abuse and developmental disabilities, as well as mental health programs and health care for the uninsured.

Forty-one delegates and eight senators, all Democrats, are sponsoring the bill and, according to OpinionWorks' poll, being a supporter of the bill will be good for candidates in November's elections. Voters from both parties said they were more likely to vote for a candidate if they favored the bill, the poll said.

OpinionWorks completed phone interviews with 402 randomly-selected registered voters between February 24 and February 28. The sampling error was plus or minus 4.9 percentage points.

"For those who say 'it's an election year,' I say yes that's right. It is an election year," said Delegate William Bronrott, D-Montgomery, a sponsor of the bill in the House. "We have an unprecedented coalition of advocates and activists who are ... saying that this would be a very good vote, in virtually every district in Maryland."

Bronrott had at least one potential Republican supporter.

"Though you might not think it, you might have my vote in this bill," said Sen. J. Lowell Stoltzfus, R- Somerset, at the hearing. "I know. Everyone's in shock."

Capital News Service contributed to this report.

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