Baltimore Mayor Stephanie Rawlings-Blake has proposed raising the city’s 2 cent tax on beverage containers to 5 cents.
She said during a recent City Council meeting the proposal is part of her Better Schools Initiative to build new schools.
“We have identified three new funding streams, including the bottle tax, that will begin to add … million[s] annually to the school construction budget by July of next year,” Rawlings-Blake said during the meeting. “This is a big bump-up for our schools, and it’s real.… It’s a new tax, and it’s one we need to pass now to invest in our kids and our future.”
The so-called “bottle tax” would by itself raise $10 million for school construction, according to city estimates. The proposal comes on the heels of a June 2010 measure that established the existing 2 cent tax on beverage containers. It exempts containers of milk, juice, and dairy products, along with larger soda containers such as two-liter bottles.
Not all see the benefit, however.
Lost Sales, Jobs
“First of all, the current 2 cent tax is a container tax—it’s a tax on containers, not just bottles. And it has cost the city sales; it has cost the city jobs,” said Ellen Valentino, executive vice president of the Maryland-Delaware-D.C. Beverage Association. “Moving forward to 5 cents will further cause the city to lose jobs, and push people out of the city to make purchases.”
The Maryland Taxpayers Association sees the bottle tax as emblematic of larger economic and political problems in the city and state.
“There’s nothing in Maryland they wouldn’t tax,” said Dee Hodges, president of the tax group. “That’s what happens when you have one political party so lopsidedly in control. They’re all Democrats—not one Republican in the city—and they all basically have lifetime jobs. That means they will raise taxes and just not think about it, because they know they’re going to be elected the next time.”
Opposite of National Trend
“Voters in Maine soundly rejected a recent attempt to tax beverages to fund state programs,” the American Beverage Association reported. “Taxing beverages, or any food item, is a poor way for governments to increase revenue, especially in tough economic times.… In recent years, the trend has been to repeal or reduce these taxes.”
Since 1990, ABA found, at least 10 states and communities around the nation have repealed taxes on soft drinks and bottles.
Opponents say the tax increase would hurt grocery store owners and retailers and raise costs to consumers. The American Beverage Association reports Arkansas, Washington, West Virginia and the City of Chicago all have varying rates of taxation on sales of bottled drinks.
Cheryl K. Chumley, [email protected], writes from northern Virginia.