A few minutes before the start of a hearing on Gov. Harry Hughes' proposed "sin tax" increases on liquor and cigarettes, a line of special interest lobbyists formed outside the door of the Senate Budget and Tax Committee room.
There, holding a pack of briefing papers and giving some last-minute advice to his clients, was the gray-suited, highly paid lobbyist of the Tobacco Institute. Down the high-ceilinged hallway, the lawyer-lobbyist for the tavern owners, bars and other liquor retailers was also deep in conversation. In between were dozens more, representing beer wholesalers, brewers and tobacco store owners.
"If you have this crowd turn out to oppose the proposals, they can't all be bad," said Sen. Julian Lapides (D-Baltimore), a committee member who has made a habit of pricking lobbyists.
For nearly five hours this afternoon, several dozen people, some of them the most highly paid and effective lobbyists in the state, carefully explained why Hughes' proposals for partly overcoming a $133 milllion budget gap with $22 million in "sin tax" increases were, in fact, all bad. In the first legislative hearing on the Hughes' package, only one person--the lobbyist for the city of Baltimore, which is very dependent on state largesse--spoke in support.
"Let's face it," Jay Schwartz, lobbyist for the Maryland Licensed Beverages Association, told the packed committee room. "The reason these taxes are being proposed is because they are politically invisible compared to an increase in the income tax . They slither, slide or march more quietly through the legislature."
The governor's proposal to increase the tax on beer by 1.5 cents a gallon (above the current 9 cents) was called an assault on the "working man's beverage" by the beer distributors and brewers. Hughes' plan to increase the tax on liquor by 25 cents a gallon, to $1.75 cents a gallon, was attacked as "regressive," and as a measure that will hurt lower-income families who "will be less able to pay the increased cost of their beverage of choice."
Lobbyists for liquor stores and bars near the D.C. line said increasing taxes in Maryland would drive business into the District.
Hughes' proposal to increase the tax on a pack of cigarettes from 13 cents to 16 cents was "premature, a bad bill," according to Bruce Bereano, a tobacco industry lobbyist who neither smokes nor drinks. Bereano, who is on a $30,000 retainer from the Tobacco Institute, has been cornering committee members and others for weeks arguing that the proposed cigarette tax increase, coming on top of a doubling of the federal cigarette tax to 16 cents a pack, is misdirected.
Lobbyists for the homebuilders and highway contractors, speaking for their industries and "on behalf of the beleaguered motorist," testified against another Hughes' proposal, to transfer $29 million from the transportation trust fund for other programs.
The theme today, from every industry affected by Hughes' proposals, was that the committee should look elsewhere for money to balance next year's $6.4 billion budget.
"It seems to me that there are other items to look at first--pensions costs, budget cuts. Why not take all the corporate tax out of the transportation trust fund and use that to fill the deficit?" suggested Bereano.
"This particular industry," said Schwartz of the liquor retailers, "is taking some body punches lately with the increase in the drinking age and . . . I suggest you pick on somebody different, at least for the next two or three years."
Members of the committee seemed equally interested in finding alternatives to Hughes' proposals. A number of legislators are especially negative to the proposed shift of funds from the transportation fund, since many of them voted last year for a 2-cent gasoline tax increase after Hughes said that money was desperately needed to repair roads and bridges.
"Why you have to increase all these at once I don't know," said Sen. John A. Cade (R-Anne Arundel), one of the strongest critics of Hughes' 1984 budget.
Committee Chairman Laurence Levitan (D-Montgomery) said the revenue-raising proposals will have difficulty in his committee when they come up for a vote, possibly as early as this week. "I think everybody would like to find a way to avoid them," he said, "but it's a question of whether we can agree on an alternative. And if it comes down to programs or taxes you're going to see taxes."