Proposed Legislation Could Add a Dime a Drink

It may soon cost you more to have that beer or that margarita.

The Maryland General Assembly is debating legislation that would increase the state tax by the equivalent of a “dime a drink” and using the proceeds to fund health programs.

If passed, the new legislation would increase the excise tax on beer from 9 cents per gallon to $1.16 per gallon. The tax on spirits would go from $1.50 to $10.03 per gallon and 40 cents to $2.96 per gallon for wine.

Maryland’s alcohol taxes are one of the lowest in the nation. The last time the tax was raised was in 1972, when it increased on beer, and in 1955, when the rate increased on spirits.

Frederick County Delegation Chairman Sen. David Brinkley (R-Frederick) said he plans to oppose the bill, titled the Lorraine Sheehan Health and Community Services Act of 2011.

“It is a steep tax, and it will be passed on to the people,” he said. By linking the tax to health care funding, Brinkley said the legislation is attempting to shame lawmakers into support.

“They are trying to make you feel if you vote against it you are voting against children with disabilities,” he said. “It is ironic to use liquor sales to fund children with disabilities.”

Manish Desai, owner of Franklin Liquors in Urbana, said the tax will have people drinking cheaper products rather than drinking less. He said he had a stack of 100 fliers notifying customers about the pending legislation and they are already gone.

“My customers are going to see that a bottle of wine is costing them more, but really my profit margin is the same,” he said.

Rich Cochrane of Urbana learned of the legislation as he was buying a keg of beer at Franklin Liquors.

“I host parties all the time, and I will be paying for my consumption and everybody else’s, too. That tax increase is ridiculous,” he said.

Anne Ea, owner of Urbana Liquors, said the tax will hurt her business, which is already struggling to make it in the current economy.

“I think it is totally a bad idea,” Ea said. “These lawmakers should work in the field to see what people go through rather than sit in their offices and make decisions.”

Franklin Liquors customer Bill Titus of Dickerson said he thinks he pays enough in taxes and believes that a high tax could have people selling alcohol illegally.

“They are going to make people start bootlegging stuff,” he said. “They’ve got enough taxes on us already.”

Frederick County Delegate Kelly Schulz said she opposes the tax increase.

“They have promoted it as an effort to raise money for women’s health issues, and it has been my experience that anytime money is earmarked for a special fund it goes to the general fund. If there are ways to increase knowledge of women’s health issues, let’s look at that, not raising taxes on alcohol as part of that,” she said.

The legislation is headed to the Senate Budget and Tax Committee. Brinkley is a member of that committee.

“The bill has some traction, but not for this amount. I will work to oppose this,” he said.

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