Taxing Tobacco for a Healthy Cause

By Lisa Rein
Wednesday, January 24, 2007

Top Maryland Democrats unveiled legislation yesterday to expand access to health care with revenue from a $1-a-pack increase in the state's tobacco tax.

House Ways and Means Committee Chairman Sheila E. Hixson (D-Montgomery) and Sen. Verna L. Jones (D-Baltimore), the Budget and Tax Committee chairman, joined a coalition of groups pushing the plan, which would steer close to $200 million in the first year to Medicaid and other health programs. Other lawmakers are drafting bills to boost health care access without a tax increase.

A similar bill failed in the General Assembly last year. But with health care a priority of legislative leaders and Gov. Martin O'Malley (D), leaders of the Maryland Citizens' Health Initiative say the proposal has more momentum this year.

"It's the State of Maryland versus Big Tobacco," said Vincent DeMarco, the group's president, at a news conference in Annapolis. "The only people who don't like this bill are the tobacco companies. They'll suffer, and the rest of us will gain."

Still, prospects for a tax increase are uncertain. It doesn't have the support of Senate President Thomas V. Mike Miller Jr. (D-Calvert) or the governor, who have expressed concerns that if the tax acts as a deterrent to smoking, the revenue source could eventually plummet. Jones said she's still optimistic. "There's always room for negotiation," she said. "Things do change."

Pr. George's Hospital Bankruptcy May Be Imminent

Prince George's County Executive Jack B. Johnson (D) said yesterday that he believes Dimensions Healthcare System, which runs the county's hospital center, might have to declare bankruptcy to resolve its long-standing financial problems.

"I'm saying that [it] is an option, and I think our citizens should know that," he said.

Johnson said he believes the hospital system, which serves 180,000 patients a year, many of them poor and uninsured, could enter bankruptcy without shutting down. The process could resolve crushing bond debt and pension obligations that drain millions from the hospital's budget, he said.

But at a legislative hearing last week, G .T. Dunlop Ecker, Dimensions' chief executive and president, said the system does not have enough money to pay fees needed to initiate bankruptcy. The county owns the hospital campuses, but Dimensions is a private company, and bankruptcy would be a decision for its directors.

"There's a fair chance we'd be out of cash before we got very far into bankruptcy proceedings," Ecker said.

Hospital executives have said the hospital needs $5 million by Friday or it will be forced to issue an alert that it will close in 60 days. Johnson has said the county might provide the money, but only if the Dimensions board agreed to terms that he has not yet outlined. A source close to the proceedings suggested that the terms might include changes to management or the board of directors.

Johnson said the county is still considering the funding. Even so, an additional $9 million would be needed to run the hospital through June, and Johnson said bankruptcy would remain an option.

Ecker and county officials are asking lawmakers and Gov. Martin O'Malley (D) to step up state funding for the system.

Grasmick Reiterates That She's Staying

Gov. Martin O'Malley (D), who expressed his displeasure with state School Superintendent Nancy S. Grasmick after his election in November, told reporters yesterday, "I would like to have a secretary of education that I can trust, and one day I will."

The problem is, he has no authority to fire her. That's up to the state Board of Education. Corralled by reporters yesterday, Grasmick made it clear that she's not planning to go anywhere.

"I made a commitment to the state board, and I'm going to serve through my term," she said. "Continuity is very critical and one thing that's been such an asset to Maryland."

Noting that O'Malley was the fourth governor she'd served under, she said: "The relationship doesn't always begin with mutual understanding, but you build there. Like with Glendening. It doesn't start well, but it ended as a beautiful thing."

Grasmick noted that the state constitution deliberately set up the education chief to be appointed by a board rather than the governor to insulate the position from political pressure.

Staff writers Rosalind S. Helderman, John Wagner and William Wan contributed to this report.