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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 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 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 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."

Mike Lurz April 07, 2011 at 12:28 AM
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.
Sue April 07, 2011 at 12:35 AM
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 April 07, 2011 at 12:53 AM
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.
Rob June 27, 2011 at 04:49 PM
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.
Tim June 27, 2011 at 05:11 PM
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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