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Graham proposes alcohol tax hike

Would close gap in budget without adding bar hours

- The Washington Times - Monday, April 30, 2012

D.C. Council member Jim Graham on Monday proposed an increase to the District's alcohol excise tax that translates to 6 cents more per drink at bars and liquor stores - a bid to close the city's budget gap without green-lighting Mayor Vincent C. Gray's plan to keep taverns open an extra hour.

Mr. Graham has staunchly opposed extending bar hours from 2 a.m. to 3 a.m. on weekdays and 3 a.m. to 4 a.m. on weekends - citing late-night noise, crime and the opposition of neighborhood groups - even as he seeks more funding for homeless services and affordable housing.

"Whatever's going on, just add an hour to it," Mr. Graham said of late-night carousing. "And that's what, in fact, is going to happen."

Mr. Graham said his proposal to increase the assessment on wholesale alcohol sales in the coming fiscal year could raise $20 million as he fights dire cuts to social services and draws a line in the sand on extended bar hours, which the mayor is counting on to raise $3.2 million in sales taxes.

"The District of Columbia is not Las Vegas," Mr. Graham said, arguing that D.C. residents will take a good night's sleep over transforming into a party town.

Council Chairman Kwame R. Brown has resisted taxes of any kind during his tenure at the helm and said he will need time to at least review Mr. Graham's new proposal.

"I'm not jumping up and down about any increase in taxes and fees," Mr. Brown said. "That's always been my position."

Mr. Graham also withdrew his support for liquor sales on Sunday, another idea that had been floated during this budget cycle.

His proposal came a day before the council considers a midyear spending plan that would dedicate $22.4 million to make whole about 25,000 city workers who were not paid for a quartet of holidays in 2011, only to see the District receive a windfall of revenue by the end of the year.

The supplemental budget plan also will allot $1.1 million to kill off a tax on D.C. residents who earn income from holding out-of-state bonds, an assessment the council imposed for the first time last year after hours of debate. The measure has been controversial since its inception, and its implementation confused residents and accountants alike, according to council members.

Looking ahead to the next fiscal year, Mr. Gray sent the council a budget proposal in March that does not rely on fees or tax increases. It was a turnabout from the prior year's budget plan, which proposed higher taxes on, among other things, parking, cigarettes and high-earners.

Mr. Gray's budget director, Eric Goulet, said the mayor does not support additional taxes on alcohol, especially after the city increased the alcohol sales tax from 9 percent to 10 percent last year.

Yet city lawmakers are feeling the pressure to restore funding to homeless services, the Temporary Assistance for Needy Families program and affordable housing initiatives.

In a boisterous protest, dozens of homeless families filed into a budget hearing before the Committee of the Whole on Monday to demand funds for homeless services.

"Housing! Housing! Housing!" they shouted in the chamber, mere steps away from council members on the dais.

The Fair Budget Coalition and the Washington Legal Clinic for the Homeless organized the protest, which largely consisted of homeless families who have been placed at the former D.C. General Hospital campus or in hotels.

Mr. Brown eventually directed officers to clear the room, after which demonstrators congregated in the lobby.

Mr. Graham said he does not support disruptions in the chamber, although he does "endorse the message I just heard."

But Mr. Graham saw opposition from restaurant and lounge owners who stand to gain business from extended bar hours in the city. They said the extra hour will create a "soft closing" that allows crowds to dissipate gradually while producing a windfall for the city.

"This is going to help your industry, there's no question about it," Mr. Graham said, pushing back on their motives.

"No, we're not going to go bankrupt," Seyhan Duru, owner of Teatro Goldoni on K Street and Cities Restaurant and Lounge on 19th Street in Northwest, interjected.

At one point, Mr. Duru tried to strike a deal with Mr. Graham.

"If you keep me open another hour," he said, "I'll charge another 6 cents."

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