BALTIMORE – Patrick Donoho, president of the Maryland Retailers Association, wrote a scathing op-ed earlier this week for the Baltimore Sun, criticizing President Obama’s fiscal year 2014 budget that funds an early childhood initiative with a 94-cent-per-pack cigarette excise tax increase.

While the federal government will cover 91% of the costs in the program’s first year, the states’ funding obligations would rise to 75% by year 10, he said.

“In 2009, when the federal government raised the cigarette excise tax, total tax paid sales of cigarettes dropped by more than 8%,” Donoho wrote. “The proposed cigarette tax hike, which is a 93% increase, could diminish tax-paid sales even further.”

Donoho said that cigarette sales comprise nearly 40% of all in-store convenience store sales nationwide. “Increasing taxes on cigarettes could jeopardize retailers' ability to grow and remain profitable, reducing Maryland's estimated tax revenues,” he wrote.

Noting Maryland’s fragile economy, Donoho said the substantial tax increase would hurt both consumers and businesses, placing an additional burden on retailers that would make it difficult for them to compete with neighboring states and black market sellers. 

“Hard-working Marylanders cannot afford another large tax increase,” he concluded. “The president's education initiative is a great idea — funding it with unpredictable taxes is not.”