YES: New taxes will amount to pennies on a drink and revenue for the city.
By David Bennett
Atlanta was a very different place when the city set its current alcohol tax rates.
Disco was king. The city was in decline as folks fled to the suburbs. And, the country was awash in red, white and blue as America had just celebrated its 200th birthday.
Fast forward more than a generation and the city is back lobbying the General Assembly for the right to increase taxes on mixed drinks and create a tax on wine and beer.
The proposed change would raise the tax on liquor from 3 to 5 percent. A similar tax would be imposed on beer and wine for the first time at 3 percent.
This is hardly a burden for those who choose to imbibe.
The popular mixed drink menu at a restaurant on Peachtree Street runs from $9 to $12 with cocktails carrying names like Sacred Oath and Mr. 6 Howler. The purchaser of a Kilted Pistolero pays $10.
The changes the city supports would increase taxes on that drink by just 20 cents.
At a pub in East Atlanta, the menu includes dozens of beers broken down by types — lagers, ales, drafts, etc. The menu includes the $5 Heavy Seas Loose Cannon, the $8.50 Great Divide Hercules Double IPA and the $8.75 La Chouffe.
An extra 3 percent would add anywhere from 15 cents to 26 cents to the tab of anyone choosing those beers.
A wine bar off Glenwood Avenue offers three dozen different wines by the glass at $8 to $13. Again, the new fee falls in at 24 to 39 cents, hardly a burden on the purchaser or business.
The impact is even less for those whose tastes are a little less high brow.
The new tax on that $2 to $3 Schlitz or Pabst Blue Ribbon? Less than 9 cents per popped top.
Atlanta fully supports its small businesses, including bars and restaurants. They add to the vibrant life of the urban environment. It’s hard to imagine businesses seeing a downturn if these fees are raised.
For the city, taxes are about generating the money needed to run the city. The nearly $6 million Atlanta would get from these two changes could pay for 60 police officers or bring youngsters valuable programming at the Centers of Hope.
And, over the past 34 years, Atlanta, like the rest of this state and nation, has learned a lot about the public costs associated with alcohol. The national consciousness has been raised on issues like alcoholism and drinking and driving.
In turn, those costs are transferred to local government and are reflected in the city’s public safety, traffic control and other efforts.
Atlanta, however, is suggesting only a modest increase of 3 percent to go along with creating a similarly small tax on beer and wine purchases.
These increases are reasonable and justified.
David Bennett is senior policy adviser to Atlanta Mayor Kasim Reed.
NO: Retailers will lose customers and small business will suffer.
By Stephanie Ramage
Atlanta is lobbying the Legislature to consider applying higher taxes to alcoholic beverages in the city. If passed, the measure, which was requested by Mayor Kasim Reed, will be only the latest crippling blow for small businesses already pounded by Atlanta City Hall. Some won’t survive it.
Last June, the owners of small, independent restaurants and bars in Atlanta asked the City Council to vote down a proposal by Reed to hike alcohol license fees.
They were joined in their protest by Taco Mac and Hooters, whose officials explained that a diverse local restaurant scene benefits big businesses like theirs because it attracts visitors. The larger operators’ profits, in turn, allow them to employ people who spend money at local establishments. Given the dismal economy, the higher fees would be hard on them, too, possibly leading to staff cuts.
For small businesses, from local bar staples like Euclid Avenue Yacht Club and Manuel’s Tavern to upscale dining establishments like Wisteria and Dogwood, the increase in fees would savage already tight budgets.
The businesses said they were struggling enough already with PARKAtlanta’s parking enforcement frightening away customers, and the city’s soaring water rates; any added expense could lead to slashing payrolls. Despite their outcry, the council approved the increases by a vote of eight to six. The majority argued that the city needed money.
Yet the higher fees were expected to raise only $1 million in new revenue. Then, in December, Mayor Reed recommended that state legislators approve even more taxation of bars, restaurants and specialty shops (whatever you may call it, whether “fees” or “taxes,” money taken from citizens to finance government is a tax). The mayor wants the state to allow him:
● To increase the existing alcohol excise tax by the drink from 3 to 5 percent, supposedly generating $3.2 million in annual revenue.
● To impose an excise tax on beer and wine by the drink of 3 percent, generating $2.5 million annually.
● To impose an excise tax on the sale of distilled spirits by the package at the wholesale level. The current rate is $0.22 per liter; the proposal would hike it to $0.33, bringing in an additional $5 million per year.
Reed claims the cost won’t hurt businesses because it will be passed on to consumers. The business owners counter that it will decrease the amount of money their customers spend with them.
Already, people drinking and dining in Atlanta often express dismay when they see their tab. No wonder. According to a March 2009 report by Georgia State University’s Fiscal Research Center, Georgia has the sixth highest wine excise tax in the nation and the seventh highest on beer.
A government is only as financially stable as its constituents. Higher costs for small businesses will force them to push people onto the unemployment rolls, so whatever tax money the city may gain, the state will lose, and when those small businesses sink under the killing weight of city fees and taxes, they’ll take larger businesses with them.
Stephanie Ramage, former news editor of The Sunday Paper, is a freelance writer.
