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RAMW: "DC Hospitality 'Startled, Angered' by Council Committee Actions"

May 2, 2002
Restaurant Association Metropolitan Washington Urges D.C. Council Reform of Alcohol Licensing Process in Response to Local Restaurant’s Seven-Year Regulatory Battle
WASHINGTON, D.C. (June 15, 2012) – The Restaurant Association Metropolitan Washington (RAMW) today called on D.C. Council member Jim Graham to include reform of the District’s alcohol licensing approval process for restaurants and bars in legislation he is currently drafting for Council consideration.

RAMW urged D.C. Council action on city regulatory procedures following a lengthy 4-1/2 hour Alcoholic Beverage Control (ABC) Board hearing on Wednesday evening to review a licensing protest by only six Dupont Circle area residents involving award-winning neighborhood restaurant Hank’s Oyster Bar that has continued for more than seven years.

The ABC Board is currently reviewing a prior decision to rescind a “Voluntary Agreement” imposed on the restaurant by a small ad hoc group restricting seating capacity and including other operating limits originating at the time of the popular eatery’s opening in 2005. Termination of the agreement by the ABC Board in 2010 had allowed restaurant chef-owner Jamie Leeds to subsequently expand into an adjoining vacant property last year. The group had filed a lawsuit to have the Board’s decision nullified, resulting in a May 17 decision by the D.C. Court of Appeals that the Board erred in not fully considering all legal requirements of a termination decision and remanding the issue to the Board for additional adjudication.

RAMW is urging Graham, who chairs the Council committee with oversight of ABC agency matters, to include modification of the licensing “protest process” in order to eliminate these types of unnecessary delays in city review of business applications as a result of licensing opposition filings by small self-identified groups. Current law allows ad hoc groups of as few as five people to intervene in the city’s liquor licensing application review process.

“Allowing only a handful of residents to protest a liquor license application results in lengthy delays in review by the ABC Board causing great hardship for local businesses. The Hank’s Oyster Bar case has dragged on for more than seven years,” said RAMW President Lynne Breaux. “The appropriate neighborhood forum for licensing review and input is the Advisory Neighborhood Commission (ANC) elected by area residents,” Breaux argued, “not these ad hoc local groups.”

Restaurant Association Metropolitan Washington Applauds D.C. Council Final Budget Vote Approving Extended Alcohol Service Hours for Hospitality Venues
WASHINGTON, D.C. (June 5, 2012) – The Restaurant Association Metropolitan Washington (RAMW) commended the D.C. Council on final approval today of a partial extension in the maximum allowable alcohol service period at the city’s restaurants, bars and hotels beginning in the fall.

“The option for our city’s restaurants and bars to extend beverage service and operating hours is a smart forward-looking action benefiting the city, local residents and the neighborhoods in which we live,” RAMW President Lynne Breaux said in congratulating the Council on its unanimous vote approving the District’s annual budget for the fiscal year beginning Oct. 1 containing the provision. “Further, it allows our city’s elected leaders to maintain a popular pledge to not further increase the local tax burden.”

“Today’s Council action enhances the District’s reputation as a thriving world-class city with an evolving 24-hour economy,” Breaux added, “and represents the initial move toward an inevitable, across-the-board extension of hours.”

The measure permits hospitality venues to extend licensed alcoholic beverage service by one hour on holiday-related dates. D.C. Mayor Vincent Gray, who had proposed the service extension option on a year-round basis in order to generate a minimum $3.21 million in additional sales tax revenues, previously announced his support for the Council compromise. The supplemental tax monies to be generated by the service extension helped the Council eliminate a projected city budget deficit without increasing local taxes or fees for both residents and businesses.  

D.C. Council Committee Demonstrates ‘Startling Lack of Support’ for District Hospitality Businesses in Rejecting Mayor’s Budget Proposal on an Alcohol Service Extension and Recommending Alcohol Tax Increase

WASHINGTON, D.C. (May 3, 2012) – Restaurant Association Metropolitan Washington (RAMW) President Lynne Breaux today joined local hospitality business leaders and industry trade groups in harshly criticizing actions this week by the D.C. Council Committee on Human Services, chaired by Council member Jim Graham (D-Ward 1), which oversees alcoholic beverage policies in the District.

“In rejecting D.C. Mayor Vincent Gray’s sensible budget proposal for a modest one-hour extension in the maximum allowable service hours for the District’s alcohol-licensed hospitality businesses, Council member Graham and two members of the committee have instead recommended to the full Council that the city’s budget be balanced by imposing an excise tax increase on alcoholic beverages,” said Breaux.

Graham was joined by committee members Tommy Wells (D-Ward 6) and Michael A. Brown (I-At-Large) in the 3-2 advisory vote against this revenue component of the mayor’s budget plan. The mayor’s proposal is projected to net a minimum $3.21 Million increase in annual sales tax revenues as a result of longer business hours at local establishments.

The mayor’s budget proposal, which will next go before the full Council, would result in the District joining eight states in allowing on-premise alcohol sales at restaurants, bars, nightclubs and hotels until 3:00 a.m. Sunday through Thursday and six states permitting sales until 4:00 a.m. on weekends.

The additional tax revenue from the proposed extension, resulting from the city’s 10-percent sales tax on alcoholic beverages, is required to offset a $172 Million budget deficit for the fiscal year beginning October 1. The increased sales tax revenue would account for nearly eight percent (8%) of additional revenue necessary to balance the budget under the mayor’s plan.

May 2012
Excise Tax Analysis by the Distilled Spirits Council of the United States (DISCUS)
High Taxes Destroy Jobs

The proposal to increase the District's beverage alcohol excise tax rates by "six cents per drink" is designed to sound like a minor price increase for D.C. residents but, in fact constitutes a major tax hike that will cost hundreds of D.C. residents their jobs.

Spirits prices are projected to increase by 12.5%, with wine and beer prices also going up. Unfortunately, as prices go up package store and restaurant owners will lose business. Some D.C. package store owners get as much as 50% of their business from Virginia residents. Total lost sales are projected to reach over $50 million annually and 560 residents would lose their jobs as a result.

Distilled Spirits Already Overtaxed

~ While "six cents per drink" is designed to sound trivial such a tax increase would, in fact, have a big impact on the already high beverage alcohol tax burden. The spirits excise tax would increase 340% to $6.62 per gallon. The wine and beer taxes would also go up substantially.

~ The proposed tax increases comes despite the fact that, by any measure, distilled spirits are already overtaxed. For a typical bottle of distilled spirits purchased in the District around 54% of the retail price already goes to pay a tax or fee of some kind.

~ In addition to the current Federal Excise Tax on spirits ($13.50/ proof gallon) and the D.C. excise tax, the District imposes a 10% sales tax on beverage alcohol. For package stores, it is one of the highest such taxes in the U.S.

~ The tax burden on beverage alcohol is already so high that Federal, State and local governments collect over $2 in taxes for every $1 that the industry (suppliers, wholesalers, retailers and restaurants) earn in profit. Government is an unequal partner in the beverage alcohol business.

~ The proposed tax increase would cause the price of the typical bottle of spirits to increase by 12.5%, wine by 9.7% and beer by 8.5%.

Read the full Tax Analysis

Released by American Beverage Licensees

Alcohol Tax Hike Would Cost Washington, DC Jobs
Increase Would Threaten Washington's Hospitality Industry

Bethesda, MD - May 3, 2012 - American Beverage Licensees (ABL), the country's largest trade association for independent bar, tavern and package liquor store owners, today expressed its strong opposition to increased alcohol taxes proposed by Washington, D.C. Councilmember Jim Graham.  A tax analysis has found that the proposed increased would lead to the elimination of 560 hospitality jobs in the District, which as of March had an unemployment rate of 9.8%.

"It is irresponsible for the D.C. City Council to treat the District's licensed beverage retailers and their customers as a fast fix for their own budget shortcomings," said ABL Executive Director John Bodnovich.  "A vibrant hospitality culture is part of what makes Washington a destination and this proposal would be a setback for the entire city."

Under the proposed increase, excise taxes would cause the price of the typical bottle of spirits to increase by 12.5%, wine by 9.7% and beer by 8.5%.  Additional increases in these taxes would translate to lost business for hardworking retailers in the city's bars, restaurants, and liquor stores, and lost income for the city.  The District already increased sales tax on alcohol last year to 10%.

"This plan effectively targets some of the city's oldest, most upstanding and well-respected businesses," said Michael Fonseca, speaking on behalf of the Washington D.C. Retail Liquor Dealers whose members include Calvert Woodley, Schneider's of Capitol Hill, MacArthur Beverages and Chevy Chase Wine & Spirits among several other volume sellers.  "This is a misguided tax increase that threatens neighborhood businesses that already contribute their fair share in taxes for District services and provide hundreds of jobs to the Washington, D.C. community.  If passed this tax increase will render D.C. retailers at a disadvantage to Maryland and Virginia beverage prices." Read the full press release