By Peter Franchot
On February 22, committees in both the House of Delegates and the Senate held hearings to consider legislation sponsored by Senator Ben Kramer (Democrat-Montgomery County) and Delegate Warren Miller (Republican-Howard and Carroll counties). If their legislation is successful, my agency’s Field Enforcement Division (FED) – which is charged with enforcing and regulating the state’s alcohol, motor fuel, and tobacco industries – would be transferred to a new, unexperienced commission composed of political appointees.
To be clear, this legislative proposal is nothing more than political retribution for my efforts to advocate Maryland’s craft brewing industry. Without providing any evidence that the FED has performed unsatisfactorily, Kramer and Miller have put forward a legislative proposal that can be summed up as unnecessary, costly and reckless.
First, this bill is unnecessary. The Field Enforcement Division, composed of 64 dedicated agents, inspectors and public servants who are among our state’s unsung heroes, consistently deliver unblemished records of service and results on behalf of Maryland taxpayers. They go after fraudulent tax preparers, ensure that the fuel we put in our tanks is safe and complies with quality regulations, and protect our kids and our families from contraband alcohol and tobacco products. Even the sponsors of the bill have acknowledged that the FED is performing well.
Second, this bill is costly. The independent Bureau of Revenue Estimates conducted a comprehensive review of the legislative proposal, taking into account every element of the bill, and members of the bureau are estimating this legislation would cost Maryland taxpayers $50 million over the next five years, not to mention that it will put at risk the $750 million in tobacco settlement money due to a reduction in aggressive enforcement and regulation.
Additionally, should this legislation pass, the taxation function and the regulatory and enforcement functions would be separated, with the former remaining within the Office of the Comptroller and the latter being transferred to this proposed commission.
The Office of the Comptroller’s tax administration and compliance functions would suffer without the law enforcement capabilities and institutional knowledge of the FED, while FED would suffer from a lack of access to sensitive taxpayer information that has been critical to their successful efficient enforcement. This would lead to two agencies with duplicate functions, and neither would function as well as they did when they were together.
In a time when the legislature is looking to find ways to fund critical public priorities - from the Kirwan Commission, to environmental protection, to public safety - it’s perplexing that some legislators are willing to put millions on the taxpayer’s credit card for no good reason.
Third, this is reckless. Plain and simple. To transfer regulation and enforcement over these three critically important industries from a high-performing, nationally renowned division to a first-of-its-kind commission composed of unexperienced, political appointees makes no logical sense whatsoever. There’s a reason tax departments in 20 states regulate alcohol, 33 revenue departments regulate tobacco, and 36 revenue departments regulate motor fuel.
Tax enforcement is a critical mission of effective and responsible regulation, and the current location of field enforcement in the Comptroller’s Office has enabled the division to execute its duties flawlessly and effectively.
Please help defeat this proposal by contacting your legislators. You can find their contact information on www.mdelect.net.