March 24, 2011

Health advocates embrace new alcohol sales tax being fast tracked in Senate

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By Len Lazarick
Len@MarylandReporter.com

Advocates who have been pushing for a dime-a-drink alcohol tax hike for more than a year are now embracing a newly introduced 3% sales tax on beer, wine and spirits that would raise less than half of what they were seeking, and would not be dedicated to health and disability services as the advocates had hoped.

The new sales tax, expected to raise $88 million, would increase 1% a year over the next three years – on top of the existing 6% sales tax — and mimics the District of Columbia’s tax structure. It is on a fast track for passage in the Senate Budget and Taxation Committee, and could be approved as soon as Thursday.

The Senate suspended its rules Monday night to allow the bill to be introduced by two committee members and sent it directly to the budget committee, which held a hearing on it Wednesday.

The beer, wine and liquor distributors and dealers who vehemently opposed the original excise tax barely had time to poll their members on the new plan, their lobbyists said.

“All the members are of the opinion that they prefer no tax,” said Steven Wise for the Maryland State Licensed Beverage Association.

Bob Douglas, lobbyist for the Licensed Beverages Distributors, said, “Nobody’s for a tax.”

A wide array of people supported the tax. They represented mental health providers, people with developmental disabilities, managers of group homes, the largest state employee union and Progressive Maryland, the coalition of left leaning groups.

“Of all the revenues, the alcohol tax is the most favored one,” said Sue Esty, deputy director for the state chapter of the American Federation of State, County and Municipal Employees. The union is pushing to hold off changes in pensions and health benefits for retirees.

Representatives for the Health Care for All coalition lobbied for an even higher alcohol tax, adding an extra 1% on drinks consumed at a bar or restaurant to the proposed 3% tax, and the existing 6% tax.

David Jernigan of the Bloomberg School of Public Health at Johns Hopkins University estimated the tax would raise more money than estimated by the Department of Legislative Services. Revenues would go up $34 million a year, raising $102 million. Adding an extra 1% tax could raise $17 million more, he said.

  • Abigail Adams

    And if this higher tax rate passes, the money will be “dedicated” to health & disability services? Just how gullible do these people think Joe Six-pack is? Or do they hope he will be too juiced to notice? Why will we need to increase spending on these services when Obamacare is promised to solve these problems? Because the taxes collected will be used, or abused, by the legislature to balance the budget, a la the transportation fund.

  • Reality again raises its ugly head. There was no chance that revenues from dime-a-drink would be dedicated to health-related programs, given the overwhelming pressures to feed the general fund. Moreover, trying to sell it as health-care funding was only a timid campaign by “Mr. Audacity” DeMarco, creating an illusion of making progress toward healing our non-functional health-care non-system, in which health insurance and pharmaceutical companies rule. It’s a lesson that should be applied to the politically-named PPACA, put together by an insurance industry agent and premised on an illusion: that the health insurance and pharmaceutical industries can be regulated.