- The Washington Times - Wednesday, February 22, 2006

A bill that would raise cigarette taxes again by a $1 per pack worked its way through two committee hearings yesterday in the Maryland General Assembly.

The House bill would raise the state’s tobacco taxes to $2 per pack, prompting criticism from some Maryland tobacco sellers.

“This is an anti-small-business bill. This is a real tax, and it will put us out of business and make us lose our jobs,” said Travis Zepp, manager for two Maryland stores owned by Westminster Cigar Co.

Lawmakers and health advocates supporting the bill said the new tax would discourage teenagers from smoking while paying for extra health insurance coverage in Maryland.

“This bill is what is needed for Maryland’s health issues,” said Delegate Sheila E. Hixson, Montgomery County Democrat and main sponsor of the bill.

The extra tax is expected to raise $155 million per year. The state last raised its cigarette tax in 2002, from 66 cents to $1 per pack.

Maryland’s tobacco tax now ranks 19th-highest in the nation, according to the Campaign for Tobacco-Free Kids.

The tax bill faces stiff opposition from Republican Gov. Robert L. Ehrlich Jr.

“This bill will face the governor’s veto should it reach that point,” said spokeswoman Shareese DeLeaver.

Revenues raised by the proposed tax would be placed in a special health fund, which would distribute the money to state health programs, Mrs. Hixson said. Some of the money would be used to expand Medicaid’s health insurance coverage, increase funding for smoking-cessation programs and create a new health insurance subsidy for small businesses, she said.

Tobacco-store owners yesterday argued at yesterday’s House hearings that additional taxes would penalize their businesses, which sell legal products.

Michael Copperman, owner of Bethesda Tobacco Inc., said the tax would drive his customers across state lines to Virginia or Pennsylvania, where tobacco taxes are lower.

“This will end up bringing down total tobacco tax revenue for the state,” said Mr. Copperman.

Barry Scher, a spokesman for the Giant Food grocery chain, countered that tobacco sales did not decline after Maryland’s last tax increase.

“When we have seen tax increases [in consumer products], it is rare that we have seen a decrease in sales,” he said.

Mr. Scher predicted that the tax would eventually lower chronic-illness rates and health care costs in Maryland.

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