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Liquor tax can be swallowed, but not the way it's distributed

April 20, 2011

Strapped for cash, as always, the Maryland General Assembly increased the sales tax on alcoholic beverages from 6 percent to 9 percent this session. We have less problem with the tax itself, than we do with the fact that, as always, what should be a matter of statewide benefit has been twisted into a none-too-subtle money grab by the metropolitan areas without consideration of the tax’s effect on more rural areas.

The alcohol tax hadn’t been raised in decades, and while we doubt proponents’ claims that it will reduce alcohol abuse and underage drinking, this tax hike was probably preferable to some other revenue streams the state might have tapped into.

Our first fear, however, is for the business that it will drive away from our local stores. State lawmakers never seem to realize how easy a hop it is from Western Maryland into adjoining states.

And while the new alcohol tax rate in Maryland might not amount to much more than the rates in adjoining states, there is still the perception of higher taxes that is part and parcel of every tax hike on consumer goods.

This perception matters, even if it’s wrong. How many people reading this could guess, for example, that Maryland’s gasoline tax is actually 5 cents less than the national average and 9 cents less than Pennsylvania and West Virginia?

And people usually tend to settle down and return to their old habits once the outrage phase has passed and they see that prices elsewhere are not that much different. So the tax itself is relative. Our bigger concern, however, is with the distribution of income generated by the tax.

The measure will raise $85 million, with the money going toward education and to services for the disabled. So far, so good. But millions will go to funding schools in Baltimore City and Prince George’s County, while the five counties of Western Maryland will split $750,000. We strongly agree with Del. Kathy Afzali, R-Frederick, who said, “We are not one Maryland; we are ours and yours.”

This ours and yours plays out time and time again, perhaps most notably in the state gasoline tax, where rural residents do most of the driving, but the metropolitan counties get most of the transportation projects.

Washington County schools and Washington County taxpayers have done their jobs. We have paid for education and spent wisely. The reward for this is to see our tax money from liquor sales siphoned off to jurisdictions that have not done so well, apparently. We do not mind helping our neighbors in other parts of the state when a crisis arises.

But we do object to a constant pattern of second-citizen status.

The tax distribution is not set beyond this year, so we hope and expect our own lawmakers to rectify the inequity in 2012.

It is a disturbing but true statement that an increasingly large part of our lawmakers’ job is to protect state raids on our own money.

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