This may be the season of giving, but it's a little troubling to hear Maryland's governor talk this week about the need for another handout from Washington to balance the state's budget, particularly when the state's falling revenues show signs of bottoming out.
Gov. Martin O'Malley may only be trying to cover his bases in case a second stimulus bill gains momentum in Congress, but if he's looking for near-term help with the budget, the state Senate may be the more likely place to spot a Secret Santa.
In an appearance on Maryland Public Television this week, Senate President Thomas V. Mike Miller said there's a "possibility" the votes exist in his chamber to raise Maryland's tax on alcohol, which is currently stuck at one of the lowest rates in the nation and has been left unchanged for decades. While he personally opposes such a move - as does House Speaker Michael E. Busch - he also coyly acknowledged that not everything that happens in the Senate is completely under his control.
Too bad Mr. Miller also demonstrated some faulty math. He suggested such a tax might raise only about $20 million per year, a pittance when stacked against the state's projected fiscal 2011 deficit of about $1.8 billion. As a recent report prepared for the Abell Foundation found, a 10-cent-per-drink increase would raise 10 times more, an estimated $214.4 million.
That's no pittance, and it's high time state legislators stopped putting their re-election fundraising interests ahead of the citizens of this state. The state legislature's failure to merely allow the alcohol tax to keep pace with inflation (the tax on hard liquor hasn't moved a cent since 1955) has had serious adverse consequences for public health, safety and the economy.
Or, to put it another way, should lawmakers muster the political courage to defy the alcohol industry and raise liquor taxes in a manner that would cost the purchaser of a sixpack all of 60 cents, there would be an estimated 4.8 percent less alcohol consumption. That, the study's public health experts have pointed out, translates to less underage drinking and fewer alcohol-related deaths.
Make no mistake, even with the money generated by alcohol tax reform, Mr. O'Malley would have to make some painful budget choices. There are layoffs, furloughs and other spending reductions in Maryland's future. If history is any guide, the state's poorest residents are likely to be hit hardest.
The latest revenue estimates show state tax revenues are no longer in free-fall. While the numbers show the state will collect about $77 million less than projected, that loss is about one-tenth the size of the write-downs of the previous four quarters. In the scheme of a $13 billion budget, that means revenues were effectively flat for the first time in years.
The recovery is bound to be slow. The unemployment rate is still too high to assume otherwise. But the estimates strongly suggest a corner has been turned.
Under such difficult economic circumstances, the last thing Maryland needs is for lawmakers to continue artificially low alcohol excise tax rates in a policy choice that amounts to welfare for affluent beer distributors and tavern owners. Just how far should the state go to preserve this antiquated system? Should Maryland make deeper cuts into health care, public schools, fire and police services or higher education? Or turn public employees to the streets?
If Washington chooses to bail out states a second time, then fine, Maryland should be part of those calculations as taxpayers in this state certainly pay enough in taxes to Uncle Sam. But Governor O'Malley and state lawmakers have it within their power to soften the coming budgetary blows by relying less on federal government borrowing and more on addressing our own drinking problems. Readers respond
Funny how The Sun couldn't quite bring itself to tell readers just how much money Maryland received in the form of a bailout this year, let alone ask Governor O'Malley just how much he thinks he needs for next year. Pesky numbers, I guess.
May I suggest that Governor O'Malley perform at a series of concerts throughout the state, with all the proceeds going to alleviate the stress on the state's coffers? And maybe he could get Senate President Miller and House Speaker Busch to sing backup vocals. Creative troubadour that he is, new songs could be written to highlight the Free State's current fiscal plight.
Now that I would certainly pay to see.
Paul N. Jackson, Cockeysville