In an effort to address Maryland’s growing budget deficit, two Democratic lawmakers are considering a tax on sugary beverage distributors — a proposal that has sparked controversy among Republicans and retailers.

House Bill 1469, sponsored by Montgomery County Del. Emily Shetty and Del. Joseline Peña-Melnyk, who represents Prince George’s and Anne Arundel counties, would add a 2-cent-per-ounce excise tax on the distributors of sugary beverages, powders or syrups.

Revenue from the proposed sugary beverage distributor tax is projected to generate $500 million in fiscal 2027, nearly half of which would be distributed to funds for healthy school meals and child care scholarships. Most of the remaining portion would go to the state’s general fund, though a new amendment could provide a health equity fund with about $15 million.

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Opponents, however, argued that the proposed tax was anti-business and could prompt some Marylanders to drive to different jurisdictions to purchase sugary beverages instead.

Sarah Price, vice president of communications and government affairs for the Maryland Retailers Alliance, said the sugary beverage distributor tax, as well as other bills up for deliberation by the legislature, don’t present Maryland as an “economically viable option for expansion.”

“This bill would not only incentivize customers to leave the state to shop but also disincentivizes businesses from investing here when they know that they can make more and save more money by locating directly across the border in our neighboring states,” she said.

Marshall Klein, president of Klein ShopRite of Maryland, which owns and operates nine grocery stores in Baltimore City, Baltimore County and Harford County, said Shetty’s legislation was not a soda bill — it’s a tax on people who don’t have other options.

“This is a group of progressive legislators trying to get a revenue option and tell people what they should and what they shouldn’t drink and how they should and how they shouldn’t live,” he said. “And what that’s going to do is take money out of the mouths of these families and impact their ability to continue to shop and provide for their families by purchasing other healthy foods.”