Proposed Booze Hike Too Much Too Fast

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In an effort to find money to save programs and help with a huge budget deficit, Maryland legislators are currently considering a wealth of bills, some aimed at increasing fees and at least one targeting a tax increase.

House Bill 791 and Senate Bill 729 call for sweeping increases in the state’s alcohol excise taxes. The bill supporters want to see hikes to “the State tax rates for alcoholic beverages sold in Maryland from $1.50 to $6.00 per gallon for distilled spirits, from 40 cents to $1.60 per gallon for wine, and from 9 cents to 36 cents per gallon for beer; providing for the distribution of the additional revenue to special funds to be used only for the purpose of providing additional funding for specified services; etc.,” the bills’ synopsis reads.

For every year as long as pundits can remember, legislation has been introduced to increase alcohol excise taxes in Maryland. However, powerful wholesale and restaurant lobbyists have routinely been able to convince legislators it’s not in the best interest of the state or their political fortunes.

Supporters of this so-called sin tax point out it’s been 37 years since the excise tax on beer has been raised and 54 years since the liquor tax was increased. Out of fairness, they say it’s booze’s turn to see an increase. They also point out Maryland’s levy on booze is the lowest in the country, and the hike could result in $80 million in new money for the state that could save critical state services, like those serving people with developmental disabilities and programs targeting alcohol and drug addiction.

It’s true Maryland’s tax on alcohol is far lower than the national average. The national average for beer is 24 cents per gallon (state, 9 cents); 74 cents per gallon for wine (state, 40 cents); and $3.62 per gallon for spirits (state, $1.50). However, what these stats do not reveal is Maryland is a liquor control state and businesses therefore pay more for their booze than others and a variety of other taxes in Maryland shows the cost of doing business here is higher than other states.

Opponents say an increase in the state’s take on alcohol purchases could cripple the state’s hospitality industry, which is already struggling in the recession as people cut back on eating out, celebrating parties in restaurants and bars and general nights on the town. Additionally, they argue the hospitality industry is being forced to cut jobs currently to keep their net profits looking healthy, and the fear is more waiters, waitresses, bartenders and support staff would have to be eliminated if proprietors were forced to up drink prices to make up for the tax change.

Where the public stands on this matter is largely unknown. However, according to an online poll in The Baltimore Sun, of about 900 online users, 56 percent said they do not favor raising the tax on booze to fund services for people with addictions and developmental disabilities. Forty-six percent said they supported it, while 3 percent were uncertain.

We commiserate with the need to raise revenue and understand supporters’ belief it’s time for the alcohol tax to be increased. The idea here is everything else, such as sales, income, property, cigarette and fuel, has been hiked and alcohol should not be immune from this frenzy.

We get that approach and see the reasoning to slightly boost the tax if the revenue is directed to the proper places, but the legislation being considered now is incredibly too drastic and, perhaps more importantly, poorly timed. These are enormous increases that are too much too fast for the people of Maryland and our visitors as well as the hospitality industry to stomach.

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