In a budget season filled with controversies over taxes, deficits and cuts across the country, Maryland just took a historic step: The General Assembly passed and Gov. Martin O’Malley signed the first increase in beer and wine taxes in 38 years, and the first increase in distilled spirits taxes in 55 years.
The case for the new alcohol tax — a 3-percentage-point addition to the state’s 6 percent sales tax — was strong. It will save lives, prevent crime and help to avert thousands of cases of alcohol abuse or dependence. It will also raise at least $85 million in revenue a year. In the first year, these funds will be used to restore much-needed services for people with developmental disabilities, shore up school budgets and support school maintenance and repairs. In future years, the funds can be used to support expanded access to health care; services for people with developmental disabilities or mental health needs; alcohol, tobacco and other drug-use prevention and treatment; and health-care worker training.
Every year, numerous states try to raise their alcohol taxes, and few succeed. Efforts were made in at least 23 states in 2010; none succeeded. As a result, alcohol companies in essence get a tax cut every year. Since alcohol excise taxes are based on the volume and not the price of the drink, they do not keep up with inflation. Federal alcohol taxes have lost 40 percent of their value since 1991. When Maryland’s liquor tax was set in 1955, it was worth more than eight times what it is worth today.
Why aren’t alcohol taxes raised more often? At least part of the answer is obvious: Alcohol companies are among the most generous contributors to state legislators; between 2000 and 2010, they poured $150 million into statewide races and party committees. They know that increasing alcohol taxes leads to decreased alcohol consumption.
Before this year, Maryland was like most other states. Legislators proposed raising the alcohol tax year after year, and lost year after year. So what was different about this year? The successful campaign rested on five key elements:
l A broad-based statewide coalition. Advocates who sought the tax as way to save lives and reduce alcohol problems connected with those who wanted to put the revenue from the tax to good use in a tight budget year, especially in services for people with disabilities and a variety of health care and public health priorities. This brought together more than 1,200 faith, labor, small business and nonprofit organizations — more than enough to make a statement in Annapolis.
l Strong public health research. Two thorough reports, funded by Baltimore’s Abell Foundation and produced by professors (including one of us) at the Johns Hopkins Bloomberg School of Public Health, became a critical tool for convincing any doubters that the tax would save lives, reduce alcohol-related violence, abuse and dependence, and improve productivity.
l Early public opinion polling. Prior to the 2010 election, the coalition conducted polling that demonstrated that most Maryland citizens were in favor of an alcohol tax increase — and that support increased if it was devoted to the causes espoused by the coalition. They even showed that some voters would cross party lines to support candidates who endorsed the alcohol tax proposal. That caught the attention of anyone running in a tight race.
l Voter education and candidate pledges. Armed with the research and polling results, the coalition secured pledges from 140 candidates running for the state legislature in 2010 that they would support an alcohol tax increase if elected. All those yes votes would provide a solid foundation to build on after the election.
l Media advocacy. The coalition continuously worked to generate news coverage throughout 2010 and 2011 to place the issue solidly on the public agenda, emphasizing the public health gains as well as the potential for new revenue.
Because of this, success was no accident. Nor was it even really a surprise. After all, these same five elements were part of the successful campaigns to increase tobacco taxes in Maryland in 1999, 2002 and 2007. It was just a matter of applying the same tactics to alcohol. No other tax increases were enacted in Maryland this session.
National and state polls consistently find that the public supports alcohol tax increases. The challenge is to turn this public support into political will. What happened in Maryland shows that it can be done. The combination of broad-based organizing with solid public health research can raise funds, preserve jobs, save lives and make history.
David Jernigan is an associate professor at the Johns Hopkins Bloomberg School of Public Health. Vincent DeMarco is the president of the Maryland Health Care for All Coalition.