ANNAPOLIS — Gov. Parris N. Glendening’s proposed $1 a pack cigarette tax won critical House subcommittee approval Thursday afternoon, but not before some legislative tinkering.
A House Ways and Means subcommittee voted 5-1 in favor of the bill that calls for two 50-cent increases in the tax on cigarettes, but it reduced the governor’s proposed tax on cigars and smokeless tobacco products, slashed a portion of the bill allocating tax revenues to building education facilities and directed $10 million into drug treatment programs.
The full committee is expected to vote on the tax today. The panel reduced Glendening’s proposed 25 percent wholesale tax on cigars and smokeless tobacco products — products that have never been taxed in Maryland before — to 15 percent, making it consistent with Delaware. Maryland is one of only eight states without taxes on cigars and smokeless tobacco.
But the governor’s carrot-and-stick approach — tying tobacco tax revenue to construction of seven new buildings at state universities — didn’t survive subcommittee review.
“We wanted to leave that more open-ended,” said Delegate Anne Healey, a co-sponsor of the bill and vice chairman of Ways and Means. “We didn’t want to tie the hands of the legislature and the governor in the future.”
The governor still will have the discretion to spend the tax revenue on those projects, it just won’t force him to, said Healy, D-Prince George’s.
One subcommittee member, Delegate James Ports Jr. was the lone vote against the tobacco tax bill. Ports, R-Baltimore County, also voted against striking the facilities allocation portion because he wanted to be sure that the money would go to education.
“The governor can (spend the money that way), but he may not. That’s the difference,” said Ports. “You don’t want to have a `trust me’ from this governor.”
Since the governor provided capital funds for only one of the seven projects in his 2000 budget, early funding for the other six projects is contingent on revenues from the tobacco tax — $149.4 million in the first year. If the tax bill doesn’t pass muster in the General Assembly, the universities will have to go without the buildings for a few more years.
“Certainly if the tobacco tax bill dies altogether we’re not going to be able to advance-fund these projects,” said Ray Feldmann, the governor’s press secretary. “They will not be killed, they will just not be accelerated. They will be on the same slow track they have been on.”
With the cigarette tax revenue, some of these projects — like a $37.7 million engineering and computer sciences building at University of Maryland at Baltimore County — would be built four years ahead of schedule, Feldmann said. If UMBC has to wait, he said, “hundreds if not thousands of students will miss out on the opportunity to learn in this building.”
In a separate amendment, the subcommittee approved dedicating $10 million of the tax revenue to drug treatment programs. Delegate Clarence Davis, D- Baltimore City, said that this amendment means most if not all of the Black Caucus will now support the bill.
“A disproportionate amount of African Americans smoke cigarettes,” Davis said. “Most of the tax will come from African American and poor communities.” Providing money for drug treatment would be a way to “give something back to the poor people,” he said. While the tax bill is expected to sail through the full Ways and Means Committee and the House with little opposition, uncertainty looms in the Senate. Sen. Barbara Hoffman, chairwoman of the Budget and Taxation Committee reviewing the bill, said Wednesday that too many senators are undecided for her to know if the bill will make it out of committee. A vote in that committee also is expected this morning. -30-