Clearing the Smoke

A bill Maryland's new governor should support

DURING OUTGOING Gov. Robert L. Ehrlich Jr.'s term, the question of raising Maryland's tobacco tax has been merely hypothetical. But with the Republican governor leaving office in January, there is optimism among public health advocates that incoming Gov. Martin O'Malley (D) might support raising the state's tax on cigarettes. As politically inexpedient as it may seem for a new Democratic governor to raise taxes in his first year, we hope the good sense of increasing the tobacco levy nevertheless prevails on Mr. O'Malley.

Maryland taxes cigarettes at $1 a pack, about the median across the 50 states. Increasing the cost, studies have consistently shown, encourages people to quit and discourages potential smokers from lighting up in the first place. When Maryland raised its cigarette excise in 1999, an estimated 20,000 teenagers stopped smoking or declined to start at all. A benchmark report from Frank J. Chaloupka, a professor at the University of Illinois, estimates that a mere 10 percent increase in cigarette prices cuts overall youth smoking by 13 percent. The Maryland proposal would double the state's tobacco excise. Even at $2 a pack, however, it would not be as high as it is in states with the largest tobacco taxes, rendering protestations over excessive taxation or lost liberty unconvincing.

The current proposal would devote most of the money raised from the new tobacco tax to expanding Medicaid eligibility to families living at or around the federal poverty line. It is somewhat perverse that the state would begin to rely on levies from the sale of a dangerous and harmful product to provide a revenue stream for Medicaid expansion. Revenue projections show that the state's annual take from a higher tobacco tax would steadily decrease as more people quit smoking and fewer cigarettes were sold, leaving less money to cover Medicaid costs. But an analysis from the Maryland Department of Legislative Services indicates that the new tobacco tax would more than pay for the Medicaid expansion through fiscal 2011. Even if the money dries up after that, other states have been able to expand and then cut back on Medicaid services when tax revenue falls.

During Mr. O'Malley's term, he will have to pass judgment on a number of proposals that Maryland Democrats have ached to enact over the past four years. The tobacco tax increase should be one of the easier calls.