Monday, December 29, 2008

Drink Tax Fight Goes On

Starting in January the Allegheny County tax on poured drinks will drop from 10% to 7% but that does not satisfy Kevin Joyce. Joyce manages the Carlton Restaurant in Pittsburgh and is a member of the Friends Against Counterproductive Taxation (FACT) board. He says he wants to see that tax rolled back to at least 3%. His group has been fighting against the tax since its inception. FACT is currently involved in an appeal to overturn a court ruling that prevented a question that would the drink tax to 0.5% from appearing on the November ballot. A hearing in that appeal is expected in late January with the goal of placing it on the May ballot. Today the group argues before a judge that the county must spend the funds on Port Authority operations and not on other transportation projects as is specified by the 2009 budget. Joyce says in 2008 the county will collect $44-46 million. That is $17-20 million more than needed for the Port Authority. Joyce says the county could roll the tax back to 3% and still meet PAT’s needs. However, he says had it not been for the efforts of FACT the tax would still by at 10%. Fact has also filed a lawsuit claiming that the county’s plans to use drink tax money to fund other transportation projects is illegal.
Joyce says the 10% tax has had a big impact on his sales. He says since January food sales have been up $42,000. That would usually result in $12-13 thousand in additional liquor sales. Instead, he says, liquor sales dropped by $100,000. He thinks the damage has been done and the lowering of the tax will not be enough to change the mind set that it is too expensive to drink in a bar or restaurant in Allegheny county.
Joyce says his patrons see the drink tax in a separate line of their bill so they will see a price reduction in January but for bars that do not present itemized checks they will have to decide what to do with their pricing. He says he thinks many will lower their prices but he says many bars have seen prices increase and sales drop so they may need to leave the prices where they are. He feels restaurants and bars are hurting with the tough economy and lawmakers need to understand how much worse the tax has made it. FACT plans to be active in upcoming county council elections in an effort to “change the face of county government.”

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