On Monday afternoon, despite long chairing the D.C. Council committee overseeing alcoholic beverage laws in the District, Council member Jim Graham managed to render himself irrelevant to consideration by his colleagues of Mayor Vincent Gray’s FY 2013 budget proposal to extend alcohol service hours at the city’s bars, restaurants, nightclubs and hotels.
In proposing to hike tax rates for all alcohol sales, Graham has confirmed his status as a legislator out of step with both the mayor and a Council majority opposed to further increasing local tax burdens already among the highest in the nation. His surprising ploy at a full Council budget hearing revealed that he remains outside the realm of mainstream public opinion in demonstrating a never-ending penchant for increased government spending fueled by even higher tax levies.
Worse, his suggestion amounts to converting hospitality businesses, already a primary contributor to city coffers and major component of the local economy, into an ATM from which to snatch additional funds. Graham’s proposal includes retail alcohol sellers for this bank account of his dreams.
Graham proposes raising the excise tax on alcohol, charged to wholesalers and passed on to community businesses and consumers, to a level generating an additional annual yield of $20 million to fund his spending priorities – resulting in an increase of six cents per drink. But he suggests the amount could be set even higher. Charging 10 cents per drink, he pointed out, would raise $34 million.
Why stop there? A dollar-per-drink surcharge would unleash $340 million to finance an even higher budget deficit and more runaway spending. Graham exhibits no hesitation in adding to the current 10 percent sales tax on all alcohol purchases.
D.C. Council member Jack Evans, who chairs the Committee on Finance and Revenue that considers tax proposals, broke the news of this startling development to a gathering of hospitality business leaders at a Restaurant Association Metropolitan Washington (RAMW) reception hosted shortly after Graham’s pronouncement. Evans appeared as incredulous announcing Graham’s idea as the assembled restaurant and bar owners were hearing of it.
Ironically, the RAMW event honored former Mayor Anthony Williams with presentation of the prestigious Duke Zeibert Capital Achievement Award, named after the legendary local restaurateur who was, for 44 years, proprietor of the high-profile downtown establishment that bore his name. Williams is credited with bringing Washington back from the brink of financial disaster and ending years of federal control brought on by excessive government spending.
Williams has agreed to chair a newly created nine-member Tax Revision Committee established by the mayor and Council Chair Kwame Brown to review the local tax code. He assured the hometown hospitality business operators that the purpose of the commission is decidedly not one of identifying ways to further increase taxes.
Graham had publicly struggled for weeks to devise a budget-balancing alternative to replace the mayor’s proposal for a modest one-hour extension of the maximum allowable alcohol service period at the city’s bars, restaurants, nightclubs and hotels that he opposes.
Gray’s proposal would join the District with eight states allowing on-premise alcohol sales until 3 a.m. on weeknights and six states that permit sales until 4 a.m. on weekends, in order to eliminate a looming $172 million deficit and enhance the city’s reputation as an evolving world-class city.
Graham will likely suffer additional backlash for abandoning his prior suggestion to allow retail liquor sales on Sundays by eliminating one of the last “blue laws” still in effect in a major metropolis. Although merely an attempt to come up with an alternate revenue source that replaced only a portion of the additional sales tax revenues of later alcohol service hours, he no longer supports it. The idea, however, had quickly proven even more popular among District residents than later bar sales.
In opposing extended alcohol service, Graham has aligned himself with a vocal minority of small citizens groups, church ministers and Advisory Neighborhood Commission (ANC) members who have traditionally engaged as protestants in alcohol licensing battles and opposed Alcoholic Beverage Control (ABC) reforms.
Now he has unabashedly chosen to push for an increase in taxation to satisfy a reckless take-and-spend philosophy to which he clings.
He well deserves the notoriety and enmity such foolishness will earn him.
Mark Lee is a local small business manager and long-time community business advocate. Reach him at OurBusinessMatters@gmail.com.