Dear Council Member:
On behalf of the National Taxpayers Union's more than 7,100 members throughout Maryland, many of whom live or work in Baltimore, I urge you to reject an $11 million tax on bottled beverages. This plan will hurt the city's families (especially those with lower incomes) and small businesses by adding to their already substantial tax burdens, which the Council has recently voted to increase by $43 million. Instead, Baltimore must recognize that years of bloated spending cannot be maintained, and that broad tax reform is needed to create jobs and grow the local economy.
Since lower-income families tend to consume bottled beverages more, the bottle tax will hit the poor hardest. The proposed tax would combine with existing state and local sales taxes to considerably increase the price charged on bottled beverages. A four-cent per container tax would increase the cost of a 30-pack of beer $1.20. In the midst of this recession, poor families can illafford higher costs such as these.
Also, the proposed tax hikes will negatively affect convenience stores, restaurants, and other small businesses, as beverages comprise a significant portion of their sales. The price differentials of their products compared to those offered in neighboring jurisdictions, such as Baltimore County, will lead to more cross-border shopping, or fewer purchases by those passing through the city. This is not idle speculation; it is exactly what happened when Baltimore imposed a similar tax in the 1990s before it was repealed.
Baltimore already has a reputation as one of the worst-taxed jurisdictions in Maryland. The local "piggyback" income tax rate, property tax rates, and other various other levies rank at or near the highest among cities and counties in the state. City officials should be working to reverse, not accelerate, this economically destructive trend. The city has many alternatives to further burdening the people it serves. For example, Baltimore has spent more than $1 million on lobbyists since 2000. Recent efforts to reduce the city's spending on lobbyists and reform city employees' pensions, along with other initiatives to find budget savings, should continue.
A tax hike on bottled beverages would only add to the pain of Baltimore residents, who already have to contend with a crippling tax system, and drive out business activity at the worst possible time. Therefore, I urge you to oppose a bottle tax if it is considered by the City Council.
Sincerely,
John Stephenson
State Government Affairs Manager