ANNAPOLIS – A tobacco tax increase could revive a stalled school reform plan threatened by a tight budget, said the Senate budget chairwoman who hopes to link the two.
“We have to find a funding source,” said Sen. Barbara Hoffman, D- Baltimore, who heads the powerful Budget and Taxation Committee. “Tobacco is a good funding source.”
Schools need an extra $130 million next year and $1.1 billion over five years, according to a two-year state-ordered study by the Commission on Education Finance, Equity and Excellence, commonly called the Thornton Commission.
Gov. Parris N. Glendening supports the findings but did not fund them in his proposed $22 billion 2003 budget. Now lawmakers will have to cut programs or find new revenues if schools are to receive any of the recommended money.
The tobacco tax increase is about saving lives, not raising money, supporters insist. But the budget shortfall does not hurt its chances. The proposed 70-cent increase would generate $148 million, according to legislative analysts. Anti-tobacco groups put the figure as high as $200 million.
The tax bill’s sponsor, Sen. Christopher Van Hollen Jr., D-Montgomery, did not design the measure with the school plan in mind.
The Thornton plan would redistribute state money to bring poor jurisdictions such as Prince George’s County in line with more affluent ones such as Montgomery County.
But Van Hollen represents Montgomery County, where leaders want more money for their county than the Thornton plan provides. Van Hollen wants a compromise on the school plan before he backs amendments to his tobacco bill to pay for it.
“I have to think about it,” he said. “If someone proposes amendments to Thornton to address Montgomery County’s issues, then we can move to the next step.”
At the opposite end of the Thornton spectrum is Prince George’s County, which has the most to gain under the plan – about $30 million next year and $305 million over five years. The leaders of that county’s House and Senate delegations both support Hoffman’s idea.
“I think it’s a good idea,” said House delegation Chairman Rushern L. Baker III. “We’ve got to find money other than the sales tax, so you go after the sin tax.”
But it might be unrealistic for both the tobacco tax and the Thornton plan to pass without cuts, said Senate delegation chairman Paul G. Pinsky, D-Prince George’s. He expects a smaller tobacco tax increase that would fund part of the education plan.
“It’s not going to fully fund Thornton,” he said. “But a lot of steam is being picked up for the cigarette tax. It’s not just whimsical, it’s right in the middle of the radar.”
Both the school reform plan and the tobacco tax must pass Hoffman’s committee. A hearing on the Thornton recommendations is scheduled March 6. The committee heard the tobacco tax two weeks ago but has not scheduled a vote.
The committee isn’t ready to discuss the tax again yet, Hoffman said. When it is, she will offer an amendment linking the revenues to education, she said.
“We have to work on the budget first,” Hoffman said.
Glendening’s budget increased education spending by $161 million but did not provide for any new programs. It closes an estimated $1 billion budget gap by postponing a tax cut and drawing on surplus funds, but some analysts say it leaves another $1 billion shortfall the next year.
Glendening generally supports a high tobacco tax. He pushed for the last increase, which brought the tax to 66 cents, among the highest in the nation, but promised not to ask for more.
“He supports it but he’s not going to be out there pushing for it,” Glendening spokesman Michelle Byrnie said last week. “He looks at this as a health issue not as a revenue issue.”
The tax would save 15,000 lives and stop teen-agers from taking up the habit, supporters said. The last increase raised $64 million a year, according to the comptroller’s office. The American Cancer Society estimates long-term health care savings of $629 million.
“Everybody wants to raise the tobacco tax,” Hoffman said. “The only people who don’t are current smokers.”
Word of Hoffman’s idea is “rampant” among members of the General Assembly, said Delegate Barbara Frush, D-Prince George’s, sponsor of a House version of the tobacco tax.
Linking the tax to the school plan not only could salvage the Thornton recommendations, it bolsters support for the tobacco tax, Frush said.
“All of a sudden it’s taken on a life of its own,” she said. “It’s gaining momentum.”