Maryland: Doubling Cigarette Tax Will Improve Health Care

Maryland Gov. Martin O'Malley (D) on Wednesday said he wants toincrease the state cigarette tax to $2 per pack to help address a $1.7billion structural budget deficit and provide a "down payment" on ahealth care expansion, the Baltimore Sun reports. According to the Sun,the proposed tax increase "appears to be aimed at reaching a compromiseamong competing interests in the General Assembly." Earlier this year,the House of Delegates approved a cigarette tax to fund medicalcoverage for nearly 250,000 uninsured residents, but the state Senaterejected the increase, saying the state first must address the deficit.

According to aides, if the tax measure is approved by theGeneral Assembly in a special session, it would generate an estimated$85 million in the first six months of next year, all of which would gotoward health care coverage. However, O'Malley spokesperson RickAbbruzzese said $170 million generated for the fiscal year beginningJuly 1, 2008, would be used to pay down the deficit. O'Malley said,"Our hope is to use the proceeds first for debt relief, but then tobridge us to a more rational, compassionate and common-sense systemthat allows us to give people the coverage up front so they're notsuffering more and costing us more."

O'Malley also said soonhe will release details of a plan that would provide incentives forsmall businesses to provide coverage for employees and adjust Medicaidlimits in an effort to reduce the number of uninsured residents. StateSen. Ulysses Currie (D), chair of the Budget and Taxation Committee,said, "I think there will be debate on where [the revenue] goes, butMedicaid is a growing need" (Fenton, Baltimore Sun, 9/27).

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