Allegheny County Council held the line on property taxes and partially rolled back the county's controversial drink tax to 7 percent last night, in approving an operating budget for 2009.

The $762.7 million operating budget was approved unanimously. County Councilman Chuck McCullough, R-Upper St. Clair, abstained. Last year's operating budget was $727.5 million.

The budget reduces the drink tax from 10 percent to 7 percent, but it is expected to generate about $26.5 million to subsidize the Port Authority's budget.

Council members also passed a $63.4 million capital budget to pay for 89 infrastructure and capital improvement projects around the county, including a plan to dredge North Park Lake and restore its original depth. The capital budget passed 13-2, with Mr. McCullough and Councilman Matt Drozd, R-Ross, voting no.

Mr. McCullough, like several council members who ultimately voted for the budget, said the drink tax reduction fell short of what small businesses and consumers deserve. It also continues to collect money that the Port Authority might not actually need, he said.

The $45 million -- including nearly $20 million more than the authority needs -- that was collected this year by the 10 percent drink tax is still sitting, untapped, in the bank, he said. The county hasn't paid a cent to the authority since May 2007, he said.

"Maybe things weren't as bad at Port Authority as we thought they were," said Mr. McCullough, who proposed two failed amendments to cut the drink tax to 5 percent, which would raise approximately $19 million. "I think we need to know exactly what's going on here."

But a 7 percent drink tax that raises too much money will be easier to cut than it would be to increase a 5 percent drink tax that raises too little, said Councilman Jim Burn Jr.

"If we can get 7 [percent], let's take 7 [percent] and see where the numbers come in in 2009," he said.

Allegheny County Executive Dan Onorato has said revenues from the car rental and drink taxes that exceed the $32 million that was budgeted for 2008 will be used for debt service related to roads and bridges in the 2009 budget.

Kevin Joyce, owner of The Carlton restaurant and past president of the Pennsylvania Restaurant Association, said cutting the drink tax took a step in the right direction. But it didn't go far enough, he said.

Mr. Onorato and council members, he said, promised when they passed the tax that the revenue it raised would be used only for the Port Authority, and that they would search for other sources of revenue to subsidize the authority.

They have done neither, he said.

"Any reduction is welcome, but this is a political solution, not a solution based on the reality of how bad things are in our business right now," he said.

And in the restaurant business, things don't get much worse than they are now, at least for high-end restaurants, said Tom Barron, a principal in the big Burrito Restaurant Group and a member of Friends Against Counterproductive Taxation.

The drink tax made it impossible for restaurants and bars to make up for higher wholesale food costs by raising drink prices, compounding what is already a tough holiday period for the industry, Mr. Barron said.

"The party business is way off -- it's decimated. People are not having the same holiday functions and people are not going out right now," he said. "You can't have a big holiday party when you've just laid off a third of your work force."