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Tax revolt may be sobering for Onorato
Monday, May 19, 2008

Allegheny County Chief Executive Dan Onorato seems to have staked not only the county's budgetary future but also his political aspirations on the sustainability of the 10 percent drink tax.

Mr. Onorato, who has maintained a pledge essentially to freeze assessments since he took office in 2003, has consistently said he will fight to maintain the county's drink tax implemented this year because he will not raise property taxes to fund government and services like mass transit.

But his critics and drink tax opponents say he may be forced into an uncomfortable position if they defeat the tax, which is facing a court challenge and may be on the ballot for a referendum in November.

Mr. Onorato may have no louder critics than some of the biggest restaurateurs and bar owners in the greater Pittsburgh area. They have formed Friends Against Counterproductive Taxation, or FACT, a nonprofit lobbying group, to eliminate the levy.

The group plans to roll out a full-fledged campaign called the "Whiskey Rebellion II," with a kickoff party tomorrow at the Church Brew Works in Lawrenceville.

The goal of the campaign is to collect more than 50,000 signatures on a petition to put the drink tax to a referendum in November's election. The referendum question, said FACT attorney Cris Hoel, will ask county voters whether they want to eliminate the drink tax.

He and others believe that given the chance, voters would overwhelmingly end the levy.

Mr. Onorato has promised to bring a referendum question of his own to ask voters if they would approve a massive increase in property taxes to replace the drink tax.

"We are going after this tax on all fronts," said Mr. Hoel. "If we win, this county will be in a terrible financial situation and [Mr. Onorato] will have to break his pledge [on property taxes] or this county will be in a mess that Dan Onorato created and deserves."

Critics argue Mr. Onorato may find himself in a precarious situation if voters not only reject the drink tax, but also send him a strong message that they don't want an increase in their property taxes, which would limit his options for new revenue sources.

"What will he do then?" said Mr. Hoel, who early this month filed an amended complaint to FACT's ongoing lawsuit against the drink tax seeking to have its case certified by the court as a class action on behalf of all 1,931 county liquor license holders.

Beyond that, the restaurateurs and bar owners say they plan on making the drink tax Mr. Onorato's Achilles' heel if and when he seeks a higher political office, like the governor's office in 2010. The group takes some responsibility for former county Councilwoman Brenda Frazier's unsuccessful bid for the state House last month because it encouraged residents to vote against her as a result of her support of the drink tax.

"We plan on defining [Mr. Onorato] in every part of this state. We already have a phrase, 'Dan the tax man,' that appears to be sticking and we're going to tell everybody about his record in this county," said Mr. Hoel.

Mr. Onorato, who easily won a second term last year, has consistently said he has not yet determined whether he will seek the governor's mansion in two years.

But if he does, Kevin Joyce, proprietor of The Carlton restaurant, said the local hospitality industry will make its case to voters in all parts of the state that Mr. Onorato has not only been "a bad chief executive," but that he has "failed to lead on the tough issues."

Mr. Onorato has vowed not to touch property taxes because he saw how homeowners suffered under his predecessor's two property reassessments, which increased taxpayers' bills. He contends that drink tax opponents may have overplayed their hand.

"I know my voters," he said, noting that once homeowners get a chance to understand what is at stake, they will sustain the drink tax as a better option for funding county services than a massive property tax hike.

"I hear from people in affluent neighborhoods and people on fixed incomes in small communities all over the county telling me not to raise their taxes," he said. "If this thing goes to the voters, they will have a chance to fully understand that eliminating the drink tax will cause a massive tax increase."

Citing his record of cutting county government by 600 employees, consolidating six of 10 row offices and encouraging more joint operations with the city of Pittsburgh, Mr. Onorato said he will gladly take on Mr. Joyce and others in a debate about his leadership.

Mr. Onorato characterizes Republican county Councilman Chuck McCullough's proposal to reduce the drink tax to 5 percent by July and eliminate it in January as "misleading" and "disingenuous." Mr. McCullough called for the reduction because he and others believe the tax will generate far more than the $30 million Mr. Onorato said is needed to pay the county's Port Authority subsidy.

Like leaders in Philadelphia, Chicago, Cleveland, Dallas and Seattle, Mr. Onorato said the drink tax is a way of trying fundamentally to change how the county will generate revenue for services without relying solely on property taxes.

As the fight over the drink tax barrels toward what might be a voter decision in November, critics and supporters agree that Mr. Onorato's decision not to raise property taxes in the last six years has put the county on this path.

"I have been saying for years that we're going to eventually have to raise property taxes, because that has traditionally been our source of revenue," said County Council President Rich Fitzgerald, D-Squirrel Hill.

Mr. Fitzgerald, who supported the drink tax when council approved it in December, said the choice has always been very clear: "Can we find something else instead of raising property taxes? Yes. The answer is the drink tax."

Like Mr. Onorato, Mr. Fitzgerald argued that even though the decision not to raise property taxes is a political one, voters will prefer the drink tax because their property tax rate--4.69 mills or $4.69 in tax on every $1,000 in value on property-- has remained unchanged since 2002.

By comparison, Mr. Onorato said that the counties surrounding Allegheny, including Armstrong, Beaver, Butler, Washington and Westmoreland, have all seen property tax increases of between 19 percent and 35 percent since 2002.

But Mr. Joyce and his colleagues, who claim the hospitality industry has lost up to $16 million in sales since the drink tax was implemented, argue that Mr. Onorato has made the county less conducive for business.

"Dan [Onorato] has done a good job of trying to pit the hospitality industry against other groups," he said. "First, it was Port Authority bus riders, then it was people who depend on the human services department, and now, he is trying to pit us against homeowners."

Karamagi Rujumba can be reached at krujumba@post-gazette.com or 412-263-1719.
First published on May 19, 2008 at 12:00 am
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