D.C. Mayor Vincent Gray released his proposed 2013 city government budget for the fiscal year beginning Oct. 1 last Friday at a news briefing. Included was a one-hour extension of business operation and alcohol service for bars and restaurants throughout the week — until 3 a.m. on weekdays and 4 a.m. on weekends.
The budget proposal also allows for retail liquor sales beginning two hours earlier at 7 a.m. Monday through Saturday, with beer and wine sales permitted at grocery stores beginning at the same time on Sundays. Sunday liquor purchases, however, would still be prohibited — an always unpopular restriction. In addition, special operating hours for eligible restaurants and bars would again be in effect for the Presidential Inauguration, as in 2009.
Expanded alcohol sales are expected to generate an annual increase of $5.3 million in additional sales tax revenue, helping close another projected budget deficit, this one totaling $172 million. These additional monies represent nearly 8 percent of the $69.4 million in new revenue sourcing required to balance the budget under the plan.
This is not the first time that the District has sought additional revenue from alcohol sales. Last year, the city began allowing stores to sell alcohol as late as midnight and raised the sales tax for retail sales for off-premise consumption from nine to 10 percent. Restaurants and bars were also permitted to initiate alcohol sales two hours earlier on Sundays, beginning at 8 a.m.
Initial public reaction has been nonchalant and even-tempered, and the mayor’s proposal has been noteworthy primarily for being unanticipated. No one has yet predicted sky-falling doom, although that will undoubtedly come — originating with the usual wet blanket liquor-licensing opponents.
Later bar and restaurant operating hours and alcohol sales are smarter policy than readily apparent.
The local hospitality industry is a first-tier business segment and employer in D.C., directly and indirectly contributing a sizable portion of the District’s tax revenues. In fact, restaurants, bars and hotels accounted for more than 60 percent of the new jobs created in the Washington metropolitan area during the past year, adding more than 18,000 new employees.
Growing this local revenue generator and strengthening the city’s reputation as an evolving world-class dining and entertainment destination is economically savvy — certainly as an alternative to increasing taxes already among the highest in the nation. Other international East Coast cities popular with business, leisure and tourist trades — such as New York and Miami — understand the importance of this hospitality service distinction.
Any fear that Washington nightlife would suddenly rage with debauchery is to overlook the inherently conservative culture in this button-down locale. Only a relatively small number of specific venues would find merit in remaining open later during the week, with a slightly larger number of establishments choosing later hours on weekends. Most early-closing restaurants, and many bars, would not find it profitable or consistent with their business model.
Most important, a significant number of bars wouldn’t even have the option, due to restrictions imposed by so-called “Voluntary Agreements” with Advisory Neighborhood Commissions (ANCs), small civic groups and license protest gangs of only five or more residents as still permitted under D.C. regulations.
When implementing special extended hours during President Obama’s 2009 inauguration, former D.C. Attorney General Peter Nickles issued a determination that any venue with stated operating hours — even if merely reflecting standard maximum service hours — is prohibited from exceeding them. Later bar service for businesses with such language would require an Alcoholic Beverage Control (ABC) board hearing and license revision.
An overlooked benefit of variable service hours at venues in close proximity is allowing patrons to depart in a more orderly manner. Rather than forcing hundreds of people — or thousands in some entertainment districts — simultaneously onto the streets, customers would leave in a staggered fashion similar to arrival. This natural behavior would lessen crowd pressures in vibrant commercial zones to the benefit of all.
While several Council members have expressed generally favorable reactions to the mayor’s overall budget proposal, public hearings and legislative negotiations will precede adoption this summer.
Perhaps thoughtful consideration of a modest expansion of bar service hours will prevail and next fall we’ll be toasting city business smarts a little bit later in the evening.
Mark Lee is a local small business manager and long-time community business advocate. Reach him at OurBusinessMatters@gmail.com.