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More Falsehoods about Alcohol Tax

by Marc Kilmer

JULY 18, 2012 Bookmark and Share

As a policy analyst, one of the most frustrating things I encounter is how advocates and the media simply ignore facts. A good example is this news story on the effects of the first year of Maryland’s higher sales tax on alcohol. Advocates, presumably Vinny Demarco and his crew, are celebrating this tax as being a great boon to people with disabilities. In fact, the tax hike gave a pittance to people with disabilities, but the advocates and media ignore this fact completely.

To begin with, let’s start with one thing in the AP story linked to above. It claims that “most of the money [from the increased alcohol tax] is now set aside for health-related initiatives, including aid for the developmentally disabled.”

No, it’s not. This isn’t a matter of opinion; it’s right there in state law that most of the money from this tax hike goes to school construction. Only 15% of the alcohol tax proceeds go to people with disabilities. And this only happens in the first year of the tax hike, meaning that beginning July 1 there is no more earmarking of funds for people with disabilities.

It’s just sloppy reporting to say what the AP story said. Had the reporter done even basic fact-checking (such as looking at the alcohol tax hike legislation), he or she would have never written that line. Is it too much to ask a reporter to get the basic facts straight? Apparently.

The alcohol tax was promoted by lobbyists like Vinny Demarco as a way to help people with disabilities. But as I’ve discussed elsewhere, when the tax hike was actually passed, people with disabilities were largely ignored. The money went to pay for school construction projects mainly located in the districts of legislators who supported the tax hike.

However, this fact is ignored by advocates and the press. Even though people with disabilities only received a pittance, these advocates keep giving the impression that the alcohol tax was passed to benefit them. It’s an astounding example of how rhetoric is far more important than reality. Advocates make claims that are easily disproven, and yet the media largely goes along with the narrative crafted by these mendacious advocacy organizations.

Demarco has done this before on the alcohol tax and it’s worked for him. Sure, I pointed out the facts, but you didn’t see anything countering his narrative in the press.

Unfortunately, this type of sloppiness is how bad public policy is enacted. Advocates can craft a story that bears scant relation to reality and, because it sounds good, can sneak in policies that do little to deal with the issue at hand. That’s why we have an alcohol tax hike that was used as a one year slush fund to reward legislators who supported it, presented as some sort of miracle for people with disabilities.

I used to be astounded at this sort of thing; now I’m just resigned to seeing it happen over and over again. I just tell myself, in a paraphrase of the line at the end of Chinatown, “forget it, Marc, it’s Maryland.”


Let me help you sort your bills and fiscal years out, there, Marc. The AP story that got you so worked up is referencing FY 2013, which began July 1, 2012. You seem to be confusing the present fiscal year with last year, and you're only looking at one of a pair of bills.

The bill you link, HB 1213 of 2011, which became Chapter 572 L. 2011, allocated $47.7 million for public school construction in FY 2012 only, but a separate bill, SB 994 of 2011, which became Chapter 571 L. 2011, did indeed allocate $15 million for services for the developmentally disabled that year.

At the time the bills were enacted, legislators and stakeholders agreed the school construction funding would be a one-time allocation for 2012, but funds from the tax would cover the cost of services for the developmentally disabled and other healthcare needs in future years. In fact, Vinny DeMarco, the "lobbyist" whom you and my other friends on the right have a habit of identifying as such, even though you never call the equally registered lobbyists of Americans for Prosperity Maryland "lobbyists," said at the time that developmentally disabled services and other healthcare allocations would increase and would become a regular part of the annual budget process in future years.

So far Vinny DeMarco is right. Fast forward to last session's approval of the FY 2013 budget and you'll find $64 million from alcoholic beverage sales tax increase is directed to healthcare needs, including $27 million for developmentally disabled services--more than was allocated last year.

So, the legislature and the advocates did exactly what they agreed to do with the alcoholic beverage sales tax revenue in FY 2012 and FY 2013. Vinny DeMarco's statements in the article you criticized were accurate, and the AP reporter got the facts right.

To paraphrase your last paragraph above...

I used to be astounded at this sort of fact jumbling from Koch-supported right wing think tanks; now I'm just resigned to seeing it happen over and over again. I just tell myself, in a paraphrase of the line at the end of Chinatown, "forget it, Marc, it's Maryland."

- Steve Lebowitz, Annapolis


Steve,

Thanks for the response. Your assertions deserve more consideration than a reply here will provide, so I'll have a blog post up tomorrow to answer your claims. I look forward to continuing the discussion there.


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