PENNSYLVANIA Restaurant, tavern owners rally against proposed alcohol tax

A governor's task force recommended the city impose the tax to boost revenues.
PITTSBURGH (AP) -- Holding signs and wearing shirts and buttons demanding no new taxes, restaurant owners, tavern waitresses and bartenders charged Wednesday evening that the city is holding the hospitality industry hostage with a proposed drink tax.
About 80 members and supporters of the Pennsylvania Restaurant Association and the Pennsylvania Tavern Association gathered near the Pittsburgh Pirates' home, PNC Park, to rally against a proposed 10-percent tax on alcoholic beverages served in the city's bars and other businesses.
"That 10-percent tax will cost us 10 [percent] to 20 percent of our business -- and that 10 [percent] to 20 percent is the difference between staying in business and closing our doors," said Kevin Joyce, chairman of the restaurant association's government affairs committee.
Bar and restaurant owners sold 1,200 tickets to the Pirates game and encouraged drink-tax opponents to attend the pregame rally, said John Barsotti, owner of The Common Plea restaurant in Pittsburgh and president of the western chapter of the Pennsylvania Restaurant Association.
Warned of deficit
Pittsburgh Controller Tom Flaherty has warned officials that the city faces at least a $60 million deficit this fiscal year and could run out of money by November.
Last week, a governor's task force that examined the Pittsburgh's finances recommended the city consider new taxes -- including the drink tax -- and budget cuts to escape its financial problems.
Gov. Ed Rendell, who implemented a similar tax in Philadelphia when he was that city's mayor, and Murphy said last week they planned to make recommendations to the Legislature by early June.
"From the mayor's point of view, [the drink tax] is a way to broaden the tax base, and it's also a user fee because there is a strong correlation between 911 calls and the sale of alcohol," said Craig Kwieczinski, a spokesman for the mayor's office.
Many restaurant and bar owners at the rally disputed the argument that their businesses and the sale of alcohol cause criminal problems. And besides, they said, a tax won't force problematic customers to drink less.
"There's also a correlation between a full moon and the number of 911 calls. Should we tax the moon, too?" said Frank Sacco, the owner of Piccolo Piccolo in downtown Pittsburgh.
Difference between cities
While proponents cite the success of the drink tax in Philadelphia, Joyce said Philadelphia in the early 1990s was much different from Pittsburgh in 2003. When the tax was implemented in Philadelphia, the county was headed into an economic and tourism boom, while Pittsburgh is in the midst of an economic slump, he said.
In addition, opponents said, while Rendell implemented a tax in a larger geographic area -- Philadelphia County -- the Pittsburgh tax would stay within the city's borders. In some cases, customers could travel over a bridge or around the block to escape the tax, Barsotti said.
Alcohol sales in Pittsburgh are already subject to a county sales tax, a bottle charge and other fees, leading bar owners to pay more taxes than owners in New Jersey or New York, Joyce said.
"More taxes will just kill us," he said. "Here they are, saying, 'Visit downtown, park for free, make Pittsburgh a destination,' and this will have the opposite effect."