Maryland lawmakers announcedplans for a 10-cent cocktail tax Tuesday — equal to about $2.40 on a case of beer — one day before the legislative session begins in Annapolis.
The dime-a-drink tax is expected to raise more than $200 million for the cash-strapped state of Maryland, which is now facing a $2 billion shortfall, said Del. Bill Bronrott, D-Bethesda, who is sponsoring the bill with state Sens. Verna Jones, D-Baltimore City, and Richard Madaleno, D-Wheaton.
About half the money would help expand Medicaid for childless adults, and the rest would fund services for the mentally disabled and programs for drug and alcohol addiction.
“More than 19,000 people are on a waiting list for developmental disability services,” Bronrott said. “And every dollar invested in addiction treatment saves $12 in correctional services.”
Maryland Senate President Thomas V. Mike Miller Jr., whose brother owns a liquor store in Clinton, has said he would not support the tax. Miller’s not alone: Numerous lawmakers have pledged to avoid raising taxes in an election year. A similar bill proposing a 5-cent alcohol tax failed in last year’s session.
But Bronrott said the legislation should fare well in the General Assembly this year because few lawmakers would deny the mentally disabled of much-needed funding in favor of cheaper booze.
“The fact that it’s an election year may play in our favor,” he said. “It could actually make this an easy vote.”
Local restaurant and liquor store owners say they can’t afford to shoulder any extra costs and are now in the awkward position of wrestling over funds with the developmentally disabled, some the bill’s strongest supporters, said Jack Milani, legislative chairman of the Maryland State Licensed Beverage Association.
“We will strongly oppose this,” Milani said of the legislation. He said the tax, implemented at the wholesale level, would pressure already struggling retailers to raise prices even further.
“God knows what it will cost by the time it gets to the consumer,” Milani said. “This isn’t a percentage, like a sales tax. People don’t realize — the guy who drinks a low-end case of beer every Friday night is going to have the same price increase as the guy who drinks premium beer.”
The tax would apply to every 8 ounces of alcohol — totaling about 55 cents for a bottle of wine and 75 cents on a handle of liquor.
The bill’s sponsors said they hope the tax will curb alcohol consumption in the state. But Milani said people won’t stop buying booze because of the tax — they will just take their business elsewhere.
“The biggest concern is for businesses that border D.C.,” he said. “Customers will just cross the border to get liquor.”
