ANNAPOLIS – The passing of a 30-cent tax on tobacco clouded an otherwise successful legislative session for the Western Maryland delegation, legislators said Tuesday.
The tax will hurt merchants without significantly reducing smoking rates, members of the delegation said.
But it did not overshadow gains in education, ethics reform and economic development, Western Maryland legislators said.
“The big thing, is that so many of the major issues were addressed,” said Sen. John J. Hafer, R-Allegany.
Speaker of the House Casper R. Taylor, D-Allegany, called the session one of the best ever for Western Maryland.
The energy deregulation bill, which mandates electric providers cut rates by 3 to 7 percent as determined by the Public Service Commission, was a highlight of the session, legislators said.
The bill will phase in competition for electricity over four years. Companies will have to be licensed before providing electricity and will have to meet basic standards of service.
Taylor, who co-sponsored the bill, said it is fair to both consumers and power companies.
Western Maryland will benefit from the bill more than most because it is bordered by three other states and may draw competitive interest from out-of- state power companies, said Delegate George C. Edwards, R-Garrett.
Western Maryland also will get a boost from Taylor’s One-Maryland Bill, which will offer tax breaks to companies expanding or starting up in economically distressed areas. Garrett and Allegany counties, which have steadily lost industry for decades, qualify for the One-Maryland program, as do impoverished areas on the Eastern Shore.
Promoting industry in areas like Western Maryland was more of a priority this session, Taylor said at Gov. Parris N. Glendening’s bill signing Tuesday. Sometimes, the legislature forgets the importance of economic development, but not this year, he said later.
Garrett County, which has the highest unemployment rate in the state, needs help to reduce the economic gap, said Edwards. “I am pleased to see that something finally went through that will help us.”
Legislators in the mostly Republican delegation were less pleased with the tobacco tax.
“A tax is a tax, and I don’t see how they can add a new one when they’re already flush with revenue,” Hafer said. Maryland is running a $222 million surplus now, and Republicans had hoped the legislature would accelerate an approved 10 percent tax cut this session. The tobacco tax is a step in the wrong direction, they said.
Merchants in Western Maryland, where residents can easily walk across state lines to buy cheaper cigarettes in West Virginia and Pennsylvania, will suffer from the tax, Edwards said. Smokers will be undeterred because they can easily buy cheaper cigarettes elsewhere and because 30 cents isn’t much money, even to a teen.
“I think most people don’t think it’s going to do what it’s supposed to do,” Edwards said. “I think it became more of a money issue than a health issue, which it shouldn’t have.”
Funds from the tax will go to anti-smoking education programs, programs to help tobacco farmers in Southern Maryland convert to new crops and science buildings at universities across the state.
A general tax cut to balance the new tobacco tax might have swayed some Republicans, Edwards said, but an amendment that would have provided a cut failed to gain much support.
Taylor voted against the tobacco tax when it called for a $1 increase but changed his vote when the increase was reduced to 30 cents. At $1, he feared the tax would put too large a price gap between Maryland and surrounding states, costing merchants in the state and opening the door to a black market.
“I don’t think 30 cents makes Maryland as much of an island,” he said. Taylor and his colleagues said that a tobacco tax should be federal law, so economic competition between states with different taxes would not be an issue. -30-