ANNAPOLIS – State lawmakers who want to double the tobacco tax for the second time in three years say the increase will generate $148 million and save 15,000 lives.
“It’s time to finish the job,” said Sen. Christopher Van Hollen Jr., D- Montgomery, who sponsored legislation heard by the Senate Budget and Taxation Committee Wednesday.
Maryland’s tax is the nation’s 13th highest, at 66 cents per pack, said supporters. The state raised the tax by 30 cents two years ago and Van Hollen’s bill would raise it 70 cents, making it the nation’s third highest.
But opponents said another increase would only serve to boost smuggling from Virginia, which levies a tax of 2.5 cents per pack, and hurt convenience stores and gas stations in Maryland. Tobacco lobbyist Bruce Bereano said anti- tobacco groups are “health police” who “don’t know business.”
“It’s unfair to continue to look at a segment of the adult population of Maryland and tax them to the exclusion of other people,” Bereano said.
Convenience store owners testified that cigarettes are a significant part of their business, and they already lose enough to stores across the state line that sell not only cheaper cigarettes but cheaper gas.
But this is not about money, supporters said.
A tearful Joel D. Lapin of Ellicott City told legislators about his wife Martha’s death from lung cancer in 1998. When she was weak from chemotherapy, she lobbied for the previous increase, saying high prices would have stopped her from smoking as a teen-ager. She died before the tax was passed.
“I am here in memory of my wife,” Lapin said. “And for the living.”
High prices are the strongest smoking deterrent, according to tobacco industry documents cited by Van Hollen.
Since the last tax increase, state tobacco sales have dropped 16 percent, according to legislative analysts. That drop comes from a combination of smokers quitting, cutting back and sneaking over state lines.
In a tight economy, the extra money from a tax increase could offset other cuts, Van Hollen said. The last increase brought in $64 million a year, according to the comptroller’s office. The American Cancer Society estimates long-term health care savings of $629 million.
About 20 states are considering tobacco tax increases this year to boost sagging revenues. This is the year to try again, said Delegate Barbara Frush, D- Prince George’s, who sponsored a companion bill in the House.
“Any other year maybe not,” she said. “But because it’s an election year and because of the fiscal situation it may stand a better chance.”
Smoke Free Maryland estimates that the higher tax would cause 29,000 smokers to quit and stop 32,000 teen-agers from starting.
It is also expected to increase smuggling from low-tax states such as Virginia. It is illegal to bring more than two packs over state lines.
The state has confiscated 286,613 packs of smuggled cigarettes with a retail value of more than $1 million since July 2000, said Mike Golden, spokesman for the comptroller’s office. That office said it will need six more agents at a cost of $350,000 to handle the anticipated increase in smuggling that would come with the higher tax.
But Mel Sherbert, who owns convenience stores in Anne Arundel and Prince George’s counties, said that even with new agents, the comptroller’s office could not stop all the smugglers.
“Every weekend in Southern Maryland there is an exodus,” toward Virginia, Sherbert said.
Committee chairwoman Sen. Barbara Hoffman, D-Baltimore, told the storeowners to stock anti-smoking products such as Nicorette instead.
“Every time we do a bill like this my blood boils,” Hoffman said after the hearing. “I don’t know how people can measure in good conscience a life against what they see as a business loss.”