Medical Professionals Online

Maryland Governor Says Doubling Cigarette Tax Will Improve Health Care, Cut Deficit

April 06, 2017

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

According to aides, if the tax measure is approved by the General Assembly in a special session, it would generate an estimated $85 million in the first six months of next year, all of which would go toward health care coverage. However, O'Malley spokesperson Rick Abbruzzese said $170 million generated for the fiscal year beginning July 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 to bridge us to a more rational, compassionate and common-sense system that allows us to give people the coverage up front so they're not suffering more and costing us more."

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

Reprinted with kind permission from kaisernetwork. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at kaisernetwork/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.