O’Malley calls to double cigarette tax to help budget deficit and health care

O’Malley’s hope is that the General Assembly would approve his plan in a special session during November, meaning the tax would generate $85 million in the second half of fiscal 2008 and $170 in fiscal 2009, his spokesman Rick Abbruzzese said.

“It would capture those revenues to address our budget deficit, and at the same time start to make a down payment to create a better system of health care where people can get the preventive health care they need up front,” O’Malley said before 30 or so seniors at the Victory House, an assisted living facility in Landover.

Abbruzzese said half of the money raised — $85 million — would be used for the health care initiatives. The initiatives include providing incentives for small and family-owned businesses to offer health insurance to their employees and expanding the coverage the state is able to offer under Medicaid, O’Malley said. The state spends $800 million each year reimbursing hospitals for their costs in treating uninsured patients, said O’Malley spokeswoman Christine Hansen.

Agnes Tolson, 64, said she likes the proposed cigarette tax hike even though she smokes. “It’s going to be good because I won’t be able to pay for cigarettes.”

Juanita Barnhardt said maybe the tax would get her daughter to quit smoking. “He can raise it some more,” Barnhardt said.

In recent days, O’Malley has announced a variety of measures to deal with the $1.7 billion structural deficit including expanding Maryland’s sales tax, closing corporate loopholes and raising the corporate income tax, according to his office.

On Wednesday, O’Malley also announced his package would double the income tax exemption for seniors from $1,000 to $2,000 and to provide $50 sales tax rebates for households with gross income up to $30,000.

dfowler@dcexaminer.com