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|
|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."