Allegheny County Chief Executive Dan Onorato said he will propose reducing the alcoholic drink tax to 7 percent in January because it seems to be exceeding revenue expectations.

The 10 percent tax, which Mr. Onorato implemented in January together with a $2-a-day tax on car rentals to fund the county's $30 million subsidy of mass transit, is on pace to generate up to $38 million this year, he said.

"We budgeted for $32 million [in revenue from both drink and car rental levies]. But now we have some real numbers and we believe the drink tax could come in somewhere between $37 million and $38 million," Mr. Onorato said yesterday.

Because of that, Mr. Onorato, who said he will use this year's excess drink tax revenues for infrastructure development and debt service, plans to trim the levy to 7 percent in his 2009 budget proposal, which he will present to County Council on Oct. 7.

Mr. Onorato said he always planned to reduce the levy if it generated more revenue than the county projected.

With seven months of revenue reported, the tax, which is paid monthly and due on the 25th of the succeeding month, has yielded about $22 million with 97.5 percent of the 2,200 eligible liquor license holders complying.

August's tax payments are due to the county treasurer today.

Kevin Joyce, proprietor of The Carlton, Downtown, and a leader of the anti-drink-tax group Friends Against Counterproductive Taxation, described the reduction as a political move born of pressure from his group.

"This is a political decision [Mr. Onorato] made because of the pressure he is getting from us," Mr. Joyce said, adding that his group, which is trying to reduce the levy to 0.5 percent by referendum, does not view Mr. Onorato's cut as a compromise.

The reduction "is better than nothing, but it is not going to help many of the struggling businesses that are being taken out of business by this tax," he said.

Restaurateurs' and bar owners' efforts to cut the tax by referendum have thus far been blocked by the county board of elections and a Common Pleas Court ruling, which said voter-generated referenda cannot set a municipality's taxes.

The group has appealed to Commonwealth Court. Oral arguments are scheduled for Oct. 2 in Harrisburg.

Mr. Onorato's announcement comes a day after County Council, in its preliminary 2009 budget talks, proposed several bills regarding county revenues, including one which sought to raise real estate taxes and another that sought to lower the drink tax to 8 percent.

Included in his budget proposals to reduce the levy, Councilman William Robinson, D-Hill District, also called for an increase in real estate taxes from 4.69 mills to 4.92 mills -- an increase of about $23 on a property worth $100,000.

Mr. Onorato yesterday reiterated that he would oppose any budget that calls for a property tax increase.