Maryland bill would raise tobacco tax to $3 per pack

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Local,Maryland,Andy Brownfield,Taxes,Montgomery County

Maryland cigarette smokers would see the price per pack jump $1 and other tobacco users could see taxes more than triple under a proposal being considered by the state House of Delegates.

Maryland already has one of the highest cigarette taxes in the nation, and under a bill from Del. Eric Luedtke, D-Montgomery County, it would jump from $2 per pack to $3. The tax rate on other tobacco products would leap from 30 percent to 95 percent of their wholesale price.

By comparison, New York has the highest statewide cigarette tax at $4.35 per pack, and Virginia has the lowest at 30 cents per pack.

Luedtke said the goal is to discourage smoking while raising money for smoking cessation and prevention programs.

"The studies have been clear that the single best way to get people to quit smoking and to prevent teenagers from starting smoking is high tobacco taxes, so the idea of this bill is to help protect public health," he said.

A Department of Legislative Services analysis of the bill predicts it would bring in $36.7 million in fiscal 2014. That amount would drop by about $3 million each year after that as more smokers quit.

Of the fiscal 2014 revenue brought in by the tax, $10.8 million would go to the state tobacco use prevention and cessation program, with at least $21 million going to the program each year after that.

The program funds tobacco awareness and cessation efforts throughout the state. However, Luedtke said Maryland's program has been funded at only about 10 percent of the level recommended by the Centers for Disease Control and Prevention. Until last year, it had appropriated $6 million of the recommended $63.3 million. Gov. Martin O'Malley's fiscal 2014 budget includes $10.2 million for the program.

The measure has broad support from public health and anti-smoking groups -- such as the American Heart Association, AARP, the American Lung Association in Maryland and Voices for Maryland's Children -- but tobacco wholesalers and retailers say it would be devastating for their businesses.

Bryson Popham, lobbyist for the Premium Cigar Retailers Association of Maryland, described the proposed tax increase as "ruinous." Cigars defined as "premium" under Maryland law would be subject to a 95 percent wholesale tax under the proposal.

"My clients are small, independently owned retail stores -- all small business, so certainly not part of 'Big Tobacco' in any sense of that term," Popham said.

Despite the large support outside of the legislature for higher taxes on tobacco, Luedtke's bill has failed to make it out of committee the previous two sessions. The cigarette tax was raised to its current level in 2007, and the tax on other tobacco products was raised from 15 percent of wholesale to 30 percent last year.

abrownfield@washingtonexaminer.com

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Andy Brownfield

Examiner Staff Writer
The Washington Examiner