ANNAPOLIS – If an outright ban on smoking in taverns and restaurants fails to pass the General Assembly this year, a Baltimore County senator is offering what may prove to be an alternative: tax credits for establishments that voluntarily go smoke free.
“This bill is a compromise that will encourage restaurants and bars to go smoke free but will still let it be a business decision for private owners,” Sen. Katherine A. Klausmeier, D-Baltimore County, the bill’s sponsor, told the Senate Budget and Taxation Committee Wednesday.
The bill would give restaurants that voluntarily prohibit smoking a yearly income tax credit of up to $5,000. The tax credit would not apply to restaurants in the five Maryland counties where a county-wide smoking ban is already in place.
This marks the third straight year Klausmeier has introduced the bill, which died in committee in previous years. She said she “has no inkling” yet about its chances this year.
Both the restaurant and tobacco industries support the idea of a tax credit, as well as legislators who are advocating a state-wide smoking ban. Sen. Robert J. Garagiola, D-Montgomery, the sponsor of a bill that would make all Maryland restaurants smoke free, said he thought the legislation was a good incentive, but expressed reservations about the cost to the state.
“The tax credit is one way and I think we should help out restaurants that need it,” he said. “But there’s a cost factor we’ve got to look at too.”
The estimated cost to the state, which is addressing a potential budget crisis, would be about $10.7 million in lost revenues, according to a fiscal impact statement attached to the bill. Health advocates pushing for a state-wide smoking ban told the committee that it was not fair for the state to spend money on something they thought restaurants should already be doing to protect the health of their employees.
“We don’t give an incentive to restaurants for keeping rats out of their kitchens, so why would we give them an incentive to ban smoking?” said Bonita M. Pennino, South Atlantic director of government relations for the American Cancer Society.
However, those who say that a smoking ban hurts small businesses by driving away customers call a tax credit a step in the right direction.
“This also recognizes that there is a financial impact (to businesses),” Melvin Thompson, vice president of government relations for the Restaurant Association of Maryland said after the hearing. “If there are smaller restaurants and bars that were considering going smoke free and this tax credit helps them do it, we applaud that.”
Bruce C. Bereano, a lobbyist for the Maryland Association of Tobacco and Candy Distributors called the bill “logical” and said it was consistent with the point of view that business should manage their own establishments.
According to the bill, about 6,000 restaurants would qualify for an income tax credit. One-third of the state’s restaurants carrying liquor licenses would not qualify, due to smoking bans in Montgomery, Prince George’s, Charles, Howard and Talbot counties.
Before the hearing, Klausmeier said she hoped her bill addressed both the needs of patrons and business owners. “It’s not just bar owners, it’s constituents saying ‘it’s my right to smoke,'” she said. “It’s a tough issue and if I could wave a magic wand and make every place smoke-free, I would. But you have to reach out to as many people as you can.”