O'Malley, Ehrlich, Oppose Dime-a-Drink Tax


ANNAPOLIS (Sept. 23, 2010)—The proposed dime-a-drink tax, which would fund health care initiatives and disability services, may have strong support in the General Assembly, but neither candidate for governor backs the proposal, campaign spokesmen said.

"Ehrlich likes to protect the taxpayer every way possible," said Andy Barth, a spokesman for former Gov. Bob Ehrlich.

And Gov. Martin O'Malley "is not inclined to support any tax increase," O'Malley spokesman Rick Abruzzese said.

In an election year, taxes are often treated like the plague.

Ehrlich, who is fighting to regain the governor's seat he lost to O'Malley four years ago, has made lowering taxes a central theme of his campaign, promising no new taxes or fees. While O'Malley has not made an ironclad guarantee, he has no intention of raising taxes during a recession.

But Vincent DeMarco, president of the Maryland Citizens' Health Initiative, said the lack of gubernatorial support is not troubling because the General Assembly can ultimately force the governor to sign a bill by overriding his veto.

DeMarco remains hopeful that the proposed Lorraine Sheehan Health Care and Community Services Resolution, which would raise the tax on alcoholic beverages by about 10 cents per drink, will pass during the upcoming legislative session.

During the session this spring, 41 delegates and eight senators sponsored the tax, but it died in committee in both chambers.

If passed next year, revenue from the tax would fund health care coverage, disability services, substance abuse treatment and prevention, and mental health needs.

A December 2009 Johns Hopkins University study reported that in addition to raising an estimated $214.4 million in revenue, the tax would save the state $249 million in alcohol consumption related costs.

According to the study, the tax would reduce drinking by 4.8 percent, which would "annually prevent 14,987 cases of alcohol dependence, 37 deaths, 13 forcible rapes, 316 assaults, 21 robberies, 67 incidents of severe violence against children, and 19 cases of fetal alcohol syndrome."

O'Malley "supports the purpose and objective" of the tax, Abruzzese said.

"Improving and expanding health care services is a noble goal," but given the recession, the governor has no plans to support tax increases, he said.

But with the endorsement of 87 primary election winners, "support for the alcohol tax is strong," DeMarco said. "The large part of the incoming legislature believes that raising the alcohol tax is a good policy and good politics."

Critics of the proposed tax disagree.

"It's very irresponsible fiscal policy management," said Bruce Bereano, an Annapolis liquor lobbyist. "Economy should be the first priority, not increasing revenues."

Bereano predicted that rather than increase, the proposed tax would decrease state revenues by driving business out of state.

In Maryland, the tax on alcohol, which for liquor has remained untouched since 1955 and for beer and wine since 1972, is the same rate as in Washington. In all three categories, the Maryland tax is below the national average.

But, if the tax in Maryland increases, it could hurt retailers in the counties surrounding the district because people would cross the border for the price benefit, Bereano said.

Barth, who said the main goals of Ehrlich's campaign are "lowering taxes and creating more jobs," agreed with Bereano that the tax would hurt local businesses and possibly restrict employment.

DeMarco disagreed.

By putting money into healthcare and community service ventures, the proposed tax would actually help the economy and create jobs, he said.

The Johns Hopkins study supports DeMarco's belief.

The estimated $214.4 million revenue generated from the tax would "undoubtedly create and preserve jobs" in state services such as public safety, education and social services, the study reports.

DeMarco estimated being close to having the support of the 24 senators and 71 delegates needed to pass the tax during the legislative session.

"I think we will have the votes in 2011," DeMarco said.

Capital News Service contributed to this report.

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