Maryland residents, business owners and legislators are buzzing about the proposed increase in alcohol tax. Dubbed the “Dime a drink tax”, some argue that the additional revenue such a hefty tax hike would generate could help the state through its budget woes and benefit public health. Others say such taxes will negatively impact small businesses and should not be earmarked for special interest groups, as it currently is.
The Lorraine Sheehan Health and Community Services Act of 2011, or Senate Bill 168/ House Bill 121 was introduced in January and proposes the first increase to alcohol tax in the state since 1955 on spirits and since 1972 on beer and wine.
Dave Dent of the St. Mary’s Licensed Beverage Association, who runs Chief’s Bar in Tall Timbers, called the dime-a-drink moniker attached to this bill “a misnomer.” The reality, he says, is that the wholesale level prices will go up significantly, leading to a price hike for businesses who sell alcoholic products and their consumers. “The actual increases are more like 569 percent on bottles of liquor, 640 percent on wine and 1189 percent on beer.”
Dent explained that such a spike in the tax would mean a loss for many liquor businesses and may lead to the loss of what he called, “Maryland’s competitive advantage over other states.” About 30 percent of liquor purchases, he said are from nearby states’ residents, where the tax is already much higher. These higher taxes, he suggests, may significantly slow sales and may even result in a loss of revenue to the state overall.
Proponents of the increase have been rallying in support, arguing that passage of the bill would save the state millions spent on alcohol-related healthcare costs and reduce crime stemming from alcohol abuse. Many also say the increased cost could decrease alcohol abuse and drinking among young people.
Vincent DeMarco, President of Maryland Citizens’ Health Initiative, is optimistic that the alcohol tax increase will pass this year. He shared that 18 Senators and 54 Delegates, all Democrats, have endorsed the proposed increase. He shared information with TheBAYNET.com about the anticipated $215.6 million in new revenues which would support the Md. Medicaid Trust Fund, as well as aid with development disability support, addiction treatment and prevention and the Mental Health Care Fund.
Many of these services have experienced heavy cuts in the weakened economy recently and anticipate additional cuts due to the state deficit.
Supporters have been urging lawmakers to consider the lives saved and the ways this tax increase can support social and health services for the many in need.
Dent said many liquor establishments have been sharing information with their customers, collecting signatures and input to share with local legislators. He explained that, “the majority of people consume alcohol responsibly…to punish those who do is not right.”
“People are just tired of being taxed,” he said, and suggested that any revenue gained from an increased liquor tax should be placed in the general fund and not funneled to specific groups.
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