In first year, drink tax revenues overflowing

By Alex Avakian

The drink tax in Allegheny County brought in more money than expected, and Allegheny County… The drink tax in Allegheny County brought in more money than expected, and Allegheny County Chief Executive Dan Onorato said he believes that the revenue can help improve infrastructure, in addition to the staggering Port Authority. ‘Our interpretation of the state law, Act 44, said the drink tax could be used to support transit systems in Allegheny County,’ said Kevin Evanto, spokesman for Onorato. ‘Now, we interpreted transit systems to mean roads, bridges and mass transit.’ But a lawsuit’s ruling last week by Common Pleas Judge Judith F. Olson decided the $12 million surplus could be spent only on the Port Authority as originally stated, not on roads and bridges. The reason that Onorato believed he could use it for broader road and bridge repair is because buses use county roads and bridges alongside commuters and commercial vehicles. Onorato has chosen not to appeal the ruling. Allegheny County imposed the 10 percent drink tax in December of 2007, but it reduced the tax to 7 percent, which took effect Jan. 1 of this year. But the workers of the industry are still feeling the squeeze. ‘I’ve seen a lot more kids just drinking at their house,’ said Jay Dvorsak, owner of the Pittsburgh Cafe on Meyran Avenue. ‘I definitely noticed a decrease in business. It hurt the whole industry. We’ve run a lot less dollar drink specials. I’m the owner, but I’m also a bartender too, and I noticed that tips went way down.’ And Santo Dinardo, who owns Bootleggers bar on Atwood Street, has said that the tax has hurt his business all year long. ‘It didn’t help at all. It discouraged some people from coming out all together, maybe even just out of spite,’ said Dinardo. To consumers like Pitt senior Jordan Henning, who frequents the bars almost every night, ‘It’s not that big of a deal.’ As a Pitt student, Henning relies on his ID as a bus pass and counts on Port Authority busses to be there for him. ‘I’d rather pay tax on my pitcher than not be able to take a bus Downtown,’ said Henning. But while the tax might be a matter of dollars and cents for one person, to the bar and restaurant industry of Allegheny County, the tax is $44 million in lost revenue to the county. Onorato has said that the prime alternative to the drink tax would be to raise Allegheny County property taxes, something that he has claimed he is adamant to avoid and feels that the tax is not as biased as opponents claim. ‘One thing that I think they confuse in the issue is they say that it’s a tax on the hospitality industry of bars and restaurants,’ said Evanto. ‘It’s not. Visitors of Allegheny County, people not only from the counties around us but other states and countries who come here to visit and buy a drink in a restaurant or bar, they’re paying the drink tax. It’s a consumer tax. It’s no different than if you buy food at Giant Eagle or you buy a sweatshirt at the Pitt shop. You’re paying sales tax, it’s a consumer tax.’ But the alternative viewpoint that many people share within the hospitality industry is that the tax is unfair because it targets a specific group: those who enjoy alcoholic beverages in Allegheny County bars and restaurants. As this group dissipates from the bar scene, so do the net profits of business owners. Sean Casey, president of Friends Against Counterproductive Taxation, said, ‘One segment of industry is being asked to carry the entire transportation burden of the county, and that really is just not equitable. And to ask them to do this during the biggest recession in close to three generations is unfathomable.’ Kevin Joyce, executive board member of FACT, said that over the first 48 weeks of the year, drink sales in Allegheny County went down, while sales in five bordering counties saw increases in sales. ‘If you were having a new 7 percent tax enacted upon your business in the worst recession in 70 years, is that a victory?’ asked Casey. ‘I would say no.’