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Baltimore County Delegates Get Sobering Truth of Alcohol Tax Hike

Lawmakers are upset that the county's share of the increased revenues would be spent in Baltimore City and Prince George's County.

 

The proposed increase in Maryland's alcohol tax isn't going down smoothly with Baltimore County delegates, who say their constituents will be paying the tab for a levy whose revenues are earmarked for Baltimore City and Prince George's County.

Now, with less than a week before the General Assembly session ends, the county's delegates are looking for a better deal—especially after county lobbyist Yolanda Winkler recently delivered sobering news about the effects of the increase on the state’s sales and use taxes on alcoholic beverages.

"You will be the biggest contributor and not get anything out of it," Winkler told the delegates in a briefing last week.

The bill, as passed by the Senate, would phase in a 3 percent increase that would raise the sales and use tax from 6 to 9 percent in 2014.

The increase is projected to raise $29 million in the first year. About $21 million of that would go to Baltimore City and Prince George's County. Another $5 million would be earmarked for programs for people with developmental disabilities.

If Baltimore County's last-minute opposition attracts other delegations, the tax increase could be jeopardized.

"I just wanted our members to be aware of the implications," said Del. John A. Olszewski Jr., a Dundalk Democrat and chairman of the county delegation. "Wherever you are on the policy of raising the alcohol tax, that's fine—I'm not judging one way or the other. I just want everyone in this delegation to be aware of where that money will be going and the extent to which we would be contributing to that tax and realizing no benefit."

The county had the most wholesale beer sales in 2010 in Maryland and ranked second in the state for wholesale wine and distilled spirits sales, according to figures released by the Maryland Comptroller's office.

It's projected that the state will raise an additional $29 million by increasing the tax to 7 percent in the first year. By 2014, when the tax is fully implemented, the state projects it will collect $87 million in new taxes.

Of the $29 million raised in the first year, Baltimore City would get about $12.2 million. Prince George's County would get about $8.8 million. The money would go to the schools systems in each jurisdiction.

"There is going to be an alcohol tax increase if you all decide, through your wisdom, to vote for this bill and Baltimore County will not benefit," Winkler said.

2010 wholesale alcoholic beverage sales by county. Source: Maryland State Comptroller

Jurisdiction Beer (gallons) Pct/Rank Wine (Gallons) Pct/Rank Spirits (Gallons) Pct/Rank
State 100,827,468 -- 13,709,989 -- 10,092,344
Anne Arundel 11,333,117 11.2 (4) 2,006,305 14.6 (3) 1,089,117 10.8 (4)
Baltimore City 12,604,339 12.5 (3) 1,368,652 10 (4) 1,364,243 13.5 (3)
Baltimore 13,476,737 13.4 (1) 2,054,548 15 (2) 1,402,617 13.9 (2)
Prince George's 13,220,516 13.1 (2) 1,287,043 9.4 (5) 954,885 9.5 (5)
Montgomery 9,811,508 9.7 (5) 2,368,232 17.3 (1) 1,489,828 14.8 (1)

Winkler said that from the comptroller's figures "you can infer that if we're the largest in wholesales you can infer that retail-wise, we're number one in beer and number two in the other categories."

The county has not taken an official position on the alcohol tax increase, Winkler said.

Still, it is no secret that County Executive Kevin Kamenetz is looking to secure additional funding during the General Assembly session.

Increases in business and liquor license fees requested by Kamenetz moved closer to passage Tuesday as the House and Senate gave preliminary approval to each other's versions of the bills. Kamenetz told legislators earlier this year the increases were needed as the county attempts to offset several years of cuts in state aide.

Additionally, more than a dozen county legislators sent a letter to Kamenetz last week asking him to find a way to restore nearly 200 teaching positions that the school system is expected to eliminate in the next budget.

Kamenetz said last week that he would need nearly $16 million to protect those positions.

The county is also projected to have to make up a $40 million shortfall in revenues based on what was projected when the current county budget was passed last spring.

A number of Democratic and Republican delegates said they were concerned with seeing so much of the proposed tax increase on alcohol go to Baltimore City and Prince George's County.

"If you look at the overall budget, Baltimore City and Prince George's County will be receiving the lion's share of money from capital projects ... Baltimore City is the only one of all the municipalities to get highway user funds," said Del. Susan Aumann, a Republican. "It's just another greedy grab from them and I'm totally against it."

"I would also add to that, and the members of (the House Government Operations Committee) can remember when we voted for legislation to give $25 million each year to Prince George's County Hospital, because it was the right thing to do," said Del. Eric Bromwell, a Perry Hall Democrat. "This is not the right thing to do."

Currently, the bill sits in the House Ways and Means Committee awaiting a vote. The session ends at midnight on Monday. Any change in the House would require the Senate to confer or force the bill into a conference committee between the two chambers.

Bromwell suggested there may be time to work with other jurisdictions to force a better deal.

"If I'm from Cecil County, I'm not going to vote for an amendment that says Baltimore County gets more money—it doesn't matter to me," Bromwell said. "But if there's a way to try to even the money out, do it in a better way where we can actually form a coalition with other jurisdictions, I think that's something we should absolutely be looking to do."

Chris Kessler

8:32 am on Wednesday, April 6, 2011

Not shocking that the bill will provide the majority of the money to PG and the City, they elected Marty O. I guess the rest of the state doesn't exist, with funding needs. Keep voting Blue!

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Mrs. H

11:40 am on Wednesday, April 6, 2011

Was thinking the exact same thing while reading this article.

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Tim

12:51 pm on Wednesday, April 6, 2011

Number of votes for O'Malley in PG and BC: 337,025. Number of votes for Ehrlich: 52,229.

http://www.elections.state.md.us/elections/2010/results/General/governor_details.html

I am disgusted at this unadulterated fiscal kickback, and hope it fails. They want to implement this tax and have a considerably more balanced distribution of the funds? I'm all for it. It's not a state benefit bill if the vast majority of the funds go towards the city and additiona county which essentially gave you your election victory.

K Blue

8:55 am on Wednesday, April 6, 2011

Thank you Delegates! If this bill passes, our school system needs and should get some of those funds. PG County Schools just got hit with a $4 million judgment against it plus more than a $1 million in punitive damages. I don't think for one minute that the tax revenues earned in Baltimore County won't be going to that at the expense of Baltimore County students. Our students have futures that need to be protected too. Thank you for your efforts.

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Mike Lurz

10:12 am on Wednesday, April 6, 2011

What will it take for these people to realize that more taxes in one of the country's already MOST taxed states is NOT THE ANSWER!!! How long before 1, 2, 3% percent tax hikes here there and everywhere adds up to 100%?

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Tim

12:57 pm on Wednesday, April 6, 2011

You'd sooner ask when the state will start spending within its means. Although you won't get a good answer either way.

Ed Conway

10:16 am on Wednesday, April 6, 2011

I guess our delegates dont read the fine print I heard where the money was going before they took the vote I am happy it was posted who voted for and who voted against. It doesnt take a genius to figure out who I will be voting against this coming election.

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Betty Lou

11:11 am on Wednesday, April 6, 2011

Thanks once again for those "wonderful" Democrats screwing up Maryland taxpayers, yet again. Their philosophy is to solve all problems with taxes. They don't quite understand that when people are taxed, they are unable to put more money into the economy. More money in the economy helps on so many levels. And now to find out that this hefty alcohol tax is really only going to benefit 2 jurisdictions just verifies the incompetent legislators running this state. We need to get NEW people in there who understand what it's like to live "out here"!

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Ann Miller

11:21 am on Wednesday, April 6, 2011

This is why Jennifer's thinking, like so many liberals, is destroying our state: First, the reason the money is going to those two jurisdictions is because it's a payback to the Dems who re-elected our incompetent governor from PG and the city. It's not because they need the money the most. Second, throwing yet more money into failing city schools, which already receive more than any other jurisdiction in the state, is a crime. The money will not solve the problems of the city schools, that's already being proved out.

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Mike Lurz

11:33 am on Wednesday, April 6, 2011

It isn't a partisan thing, while admittedly Maryland has had an extra long run of one party.

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Tim

1:03 pm on Wednesday, April 6, 2011

Exactly. You can 'kinda' blame Democrats locally (I don't exactly hold the Marlyand state Congress in particularly high esteem), but you sure can't blame a single party nationally - both are guilty as charged.

Mike Lurz

11:34 am on Wednesday, April 6, 2011

That's what politicians do, they throw a pile of money at a problem ( whether the money is there or not) and then walk away expecting all to be well. The problem is that the money never makes it to the target.
It is usually sucked up by the bloated administration in the for of "deputies" and assistant to the deputy to the assistant to the director... Again, not as liberal or conservative thing, a political thing. We can't keep finger pointing and name calling, we have to sit on top of ALL of these people and treat them like irresponsible teenagers, because that is how they are acting. If you still insist on making this a partisan issue, then show me the last thing ANY republican has done to shrink government or reduce taxes that wasn't at the expense of the citizenry.

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Sue

8:19 pm on Wednesday, April 6, 2011

Mike I agree entirely its not a liberal, republican, democratic or otherwise issue. The question is management. Where is education money best spent? In the classroom and in the school house where the children are. That is what the Baltimore City Public Schools CEO, Dr. Alonso, has done. He eliminated over 350 central office positions, shrunk centrally funded programs, and pushed the vast majority of funding from the City, State, and Federal Governments to the school house. Each principal receives an amount certain per pupil and each principal along with their staff, and family and community councils make decisions about how to spend their money to educate their students. The principals set the class size, the principals hire the teachers, the principals make decisions about additional programming like after school, and debate. As a result of Dr. Alonso's work test scores are going up, graduating students are increasing, and more students are taking and passing AP courses. Your superintendent should take a page from our song book!

eaglei218

1:32 pm on Wednesday, April 6, 2011

The longer we standby and allow this to happen with voices unheard, it will soon become the "new normal". Gas prices rise with the daily commute to and from work, and Annapolis wants to raise the gas tax as well. O'malley says our tax code needs to be modernized, which to me equates to higher taxes overall. Not to mention Slots, Marylanders have hemorrhaged millions over state lines for years, and why. Merely because the impetus for slots was introduced by a republican governor in a democratically held state house. Democrats, via entitlement programs, expand their voter base. Its time to take America back, we can't afford 4 more years!

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David A Aughenbaugh

2:24 pm on Wednesday, April 6, 2011

@eaglei218...Spot on...I believe we've achieved the 'new normal" here in Maryland, a sustained practice of putting the burden on the taxpayer to 'carry the water' for all. By ALL, I mean those that are particularly the burdensome folks...and before I get my "hateful" responses...they are NOT the poor and or underprivileged, I'm speaking of the power politicians that rely on the guaranteed voting block that support them. A cycle, until broken will continue to be used to keep them in power. The prescription is worse than the disease.

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Sue

6:08 pm on Wednesday, April 6, 2011

The increase in dollars that is being allocated to Baltimore City Public Schools is not a kick back or extra dollars. This is money that Baltimore City Public Schools receives from the State for education funding just as Baltimore County and every county receives money from the state for education aid. The $12 million increase is due to a calculation error in regard to Baltimore City's maintenance of effort. The additional $12 million for children living in Baltimore City arrived late in the budget, after the Governor introduced his budget. The $12 million deficiency has to be made up somewhere. Why not alcohol tax. Its a tax that hasn't been increased in more than 30 years. On its face the tax needs to be revisted. The money is required by state law. Increasing the tax and paying what is owed legally through the same formula that funds county schools is appropriate. To the extent the the County school system is cutting schools and growing its central office administration. I think people should be upset by that and I think they should focus on letting the school system know where the education funding priorities should be; at the school house. This is a red herring folks. Pay attention to what is happening in your district and support the idea that every child in Maryland County or City have the right to an education.

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Mike Lurz

8:28 pm on Wednesday, April 6, 2011

Hold on a minute, just because a tax has'nt gone up in percentage doesn't mean it should. The cost of alcohol has gone up so the revenue has as well. If the government cannot live within it's means it cannot simply raised percentage points on taxation to cover its debt. That money as well as other MUST come from other sources or things must be cut to maker it happen. And there are plenty of places ( including inside the school system) where that can and should happen. This kind of thinking is what is killing the middle class of Maryland and the US. How kind of you to give the government permission to take more of my money.

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Sue

8:35 pm on Wednesday, April 6, 2011

I imagine there is probably room to cut costs in the bloated administration of County Schools but for Baltimore City we've already played the song and have done that dance. the cuts are at the school house. Without our legally mandated state aid for education my school is looking at cutting a teaching assistant and reducing a social worker to 1/2 time. Those are real people losing their jobs, and real students losing the services provided by those people. Our State Government has cut spending every year since 2003. There is a national recession created in part by the severe mishandling of the financial market and the lack of regulation to control for unscrupulous mortgage providers. Maryland has a constitutional mandate to provide for a thorough and efficient system of free public schools through taxation or otherwise. Plain and simple. The State must provide for education, its a constitutional right (just like ours to speak our minds) and they have to pay for it. These dollars won't be tied to City Schools funding forever its just to cover a deficiency created by counting the beans wrong. Personally I don't mind paying the extra tax. If you are opposed to paying the tax I suggest boycotting alcohol.

Mike Lurz

8:53 pm on Wednesday, April 6, 2011

WOW so the city is entitled to the money I work for?? How do you figure that? The city government has a ridiculous tax rate and has chased tax payers out of the city for years. Why should those that do not live there or benefit form the city, receive ONE single city service have to pay for the mistakes made by city government and voters? Perhaps the city needs to figure out a way to finance itself so that the entire state does not have to pay for their irresponsible government. As far as the state I repeat, they already get way more of my tax money than those who are comparable to my situation in other states. By the way this tax doesn't just burden those who like to drink, it will cost business and those who work in liquor stores, bars and the makers of the product in the first place, just like the city they will be chasing away tax revenue by further over taxing. You may wish to turn this into a " its your option to drink or not" issue, but it goes much deeper. Our government will not stop mending their ways by taxing us ( be it on alcohol, or other ). It won't stop here. And at this point dumping money into a hole ( aka Baltimore City). I pay my bills and live within my means, but that may change as the state keeps using its citizens as ATMs. Perhaps cutting many bloated state and city entitlement programs and sticking to the 5 or 6 things government is supposed to do would be a good start.

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Rob

12:49 pm on Monday, June 27, 2011

Buy up your booze before the alcohol tax increase of 6% to 9% on July 1! Anybody got some extra storage space
for lease? So, the same day our Governor signed this bill, he also placed his signature on a bill classifying
incinerated trash as renewable energy. Well, w/ all the garbage that spews from Annapolis surely that could be
incinerated & used for renewable energy.

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Tim

1:11 pm on Monday, June 27, 2011

Meanwhile, O'Malley has begun playing gigs with his band again. He's a better musician then he's ever been a governor.

Instead of this tax money raised in our county going TO our county (which I'd be OK with). You know there are teacher positions we could use, or even better - Air Conditioning for our poor kids schools!

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