Drink tax running up a tab

by Hayley Grgurich Senior Staff Writer and Halyse Therese Domencic For The Pitt News

Dan… by Hayley Grgurich Senior Staff Writer and Halyse Therese Domencic For The Pitt News

Dan Onorato has started one heck of a bar fight.

The Allegheny County Chief Executive’s introduction of a 10 percent tax on poured drinks has raised prices, slashed tips and incited the anger of local bar owners.

The tax is meant to offset the cost of the Port Authority fleet, but bar owners are bearing the brunt of the burden.

“You don’t want to price yourself out of the market,” Gene Ney, owner of Gene’s Place on Louisa Street in Oakland, said, “but it makes it more difficult to keep prices low and do the right thing when your resources are being taxed.”

Ney is not alone in struggling to implement the tax while still taking care of his customers and staff.

“It’s really affecting bartenders and servers because they’re the college students and the ones who need the money most to put bread on the table. Boomerang’s is famous for its $1 Yuenglings. Now servers are receiving 50 cent tips instead of $1 tips because Yuenglings are now $1.50,” Dale Popovich, a manager at Boomerang’s on Forbes Avenue, said.

Tips are among the biggest casualties of the tax, no matter how it’s distributed, because higher prices mean smaller change.

In the interest of keeping speedy service and even prices, some bar owners have elected to raise prices 25 cents across the board, while others have tacked on the 10 percent to preexisting drink prices.

“Some places have gone ahead and changed their registers to ring up the 10 percent, but people get annoyed with nickels and dimes,” Jay Masood, assistant manager of Spice Cafe, on Atwood Street, said.

“If they buy a $1 beer with a lot of tax, they don’t want to end up getting 90 cents back in change.”

Beyond the difficulties of applying the tax to their menus, bar owners also have to compete with beer distributors, to whom the tax does not apply.

Although it’s worded to be a tax on poured drinks, in reality it applies to any alcohol a bar sells, including six- and 12-packs.

“Six-pack sales have dropped only two weeks into the new semester, especially when you are two to three blocks from a beer distributor,” Popovich said.

Ney is concerned that the competition could be stacked in the beer distributors’ favor.

“A piece of legislation they’re looking at would allow beer distributors to sell beer in smaller quantities like six- and 12-packs, and they wouldn’t have to include the tax, so that puts them at a clear advantage,” Ney said.

Bar owners feel the tax has added to the strain of the rising operating costs.

Because of a hops shortage, breweries have doubled their prices, which directly affects bar owner profit.

“The cost of a Yuengling keg has gone up $14 in the last three years, but I haven’t raised the price of a Yuengling draft in three years,” Ney said.

“The price of gas screwed everything up,” Popovich said, explaining how the rising oil prices have increased delivery costs.

Fewer bar owners might oppose the tax if they felt they and their patrons were benefiting from the service it is intended to fund.

“They’re taxing people who go out and drink for Port Authority, but public transportation isn’t available after 12:45 p.m. So, when people are done drinking at 2 a.m., there aren’t any buses. I feel it pushes more people to drink and drive, and it is personal for me because I lost a brother to a drunk driver,” Popovich said.

Aside from hanging “Don’t Serve Them” posters picturing Onorato and County Council members who supported the tax in their windows and labeling the charge the “Onorato Tax” on receipts, bar owners have joined together to take a proactive stance against what they consider unfair taxation.

Area bar owners together with Friends Against Counterproductive Taxation have organized a rally to raise funds for a legal team to combat the tax.

“It’s going to be at the Church Brew Works from 5:30 to 9:30 p.m. on Feb. 11,” Michele Burchfield, spokesperson for FACT, said. “It will be a celebration of the industry and a fundraiser.”

The $40-a-head ticket price will cover all-you-can-eat food, beer and cocktails, most of which are being donated by area businesses.

FACT was organized specifically to combat the tax by restaurateur Tom Baron, president of Big Burrito Restaurant Group, which owns Oakland’s Mad Mex.

“I think we have a very good chance of getting this tax repealed,” Burchfield said. “What we’re seeing is a greater understanding on the part of the council members who voted for the tax about just how much is affected when the industry doesn’t have the profits to reinvest in the community.”

FACT has been pleading its case to Onorato and the council, but bar owners want to make sure that it does not all happen behind the scenes.

“We want to keep this in the media,” Popovich said. “We don’t want the public to forget about it.”