Drink tax haul exceeds forecast

Rental car levy also contributes to pace that would better $30 million

Allegheny County's two new taxes, 10 percent on drinks and $2 a day on car rentals, are on pace to bring in considerably more than the $30 million they were expected to raise, county Treasurer John Weinstein said yesterday.

The taxes, implemented this year to fund the county's subsidy of the Port Authority, could raise up to $10 million more than projected, Mr. Weinstein told members of County Council's Budget and Finance Committee.

"We're going to average at least $3 million a month, and I would anticipate projected revenues between $36 million and $40 million," he said.

As of last Friday, the drink tax alone had brought in $7.5 million for the first three months. The amount is expected to go up because only 53 percent of the 1,931 liquor license holders had filed their March returns by last Friday, he said.

The car rental and drink taxes are paid monthly and are due on the 15th and 25th of succeeding months, respectively.

"There are still some bars that are not paying [the drink tax], but overall, compliance is moving in the right direction," Mr. Weinstein said, as he presented council with his 2008 first-quarter tax revenue report.

As for the car rental tax, he said, compliance is near perfect, and the levy has brought in $1.1 million in its first three months.

But some companies have so far refused to comply, Mr. Weinstein said, singling out the Lowe's home improvement chain, which operates a truck rental service at its six locations in the county.

"We are still in negotiations with [Lowe's]. They don't believe the car rental tax applies to them because the law spells out rental companies which operate at least five vehicles," he said.

Even though Lowe's rents only one truck at each of its six locations, the tax applies because the company has more than five locations in the county, Mr. Weinstein said.

Drink tax opponents yesterday pointed to Mr. Weinstein's report in arguing that county Chief Executive Dan Onorato should consider lowering the tax.

"I think [Mr. Weinstein's] estimate is still conservative. This drink tax may bring in $45 million, and that's during bad economic times," said Kevin Joyce, proprietor of The Carlton restaurant and a leading drink tax opponent.

"We told [Mr. Onorato and County Council] all along that this drink tax would bring in a lot of money. We asked for an adjustment, but [Mr. Onorato] doesn't want to hear anything other than he wants to get as much money as he can," Mr. Joyce said.

Kevin Evanto, Mr. Onorato's spokesman, said there will be no midyear adjustments to the drink tax. Any necessary changes will be made during the county's budget process in the fall.

Mr. Evanto said Mr. Weinstein's projections are not that far from what the county expected to collect.

"When we talked about these taxes during the budget last year, we estimated that they would bring in $32 million," he said.

"And when our budget director testified to council, she said that both of these taxes could bring in about $35 million.

"We don't believe that you can extrapolate the entire year's collection when we are just in the third month."

Mr. Weinstein said, as a next step, he is preparing to deal with a small number of liquor license holders that have not complied with the drink tax -- assessing penalties and seeking criminal charges.

Karamagi Rujumba can be reached at krujumba@post-gazette.com or 412-263-1719.


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