Maryland Senate Passes 3 Percent Alcohol Tax Increase

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Maryland state senators have approved a three-percent alcohol tax increase, The Washington Post reported March 30.

Under the bill (SB 994), the alcohol tax would be raised one percent a year over three years, from six percent to nine percent, eventually raising an estimated $85 million a year. According to the Post, the Maryland Senate also approved a budget in which the majority of the alcohol taxes would be directed to public schools in three Maryland counties, and Baltimore in the first year.

The Baltimore Business Journal, reported March 30 that at least $5 million of the alcohol tax revenues would go toward shortening the wait list for developmental disabilities services during the first year of the new tax. In the two years following, that amount would increase by at least $5 million each year. Other monies would go to the state’s general fund.

Critics of the new tax say that low-income families will be hit hardest by it, and that it will be bad for business. Supporters argue that it will drive down drinking rates. Sen. Richard J. Madaleno Jr. (D-Montgomery) said, “”When this bill is fully implemented, it will save lives.””

The bill now has to be approved by the House of Delegates, and then be signed by Governor Martin O’Malley (D). A spokesman for the governor, Shaun Adamec, said O’Malley would “”keep an open mind”” on revenue measures. 

“We’ve got to start looking at revenues as a way to start looking at our structural deficit,” said Verna L. Jones-Rodwell (D-Baltimore City), who championed SB 994. “We’ve cut, cut, cut, and unless we get more people back to work and stimulate the economy more, we’re going to have to look at more ways.”

The bill falls short of the dime-a-drink tax hike proposed in earlier legislation, which would have raised over $200 millon in annual revenue.

If it passes into law, the alcohol tax increase will be a milestone. While alcohol taxes did rise in 2007, when Maryland increased the general state sales tax from 5 percent to 6 percent,  the state has not raised taxes specifically on beer and wine since 1973, when Richard M. Nixon was president.

It has not raised taxes on hard alcohol since 1955, when Dwight D. Eisenhower was president.

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