Order that drink or pick up that 6-pack and you could soon be paying more if the governor has his way. Gov. Arnold Schwarzenegger, facing a state budget that’s more than $11 billion in the red, is proposing a tax on alcohol. Last week, he proposed adding $.05 per drink for beer, wine or liquor.
The concept of taxing alcohol prompted a quick and negative response from Adam Smith, vice president of the Distilled Spirits Council of the United States.
“It’s unfortunate that at a time when the hospitality industry is under such stress the governor would propose an increase on the already burdensome alcohol excise tax,” said Smith to the San Francisco Business Times. “As restaurants throughout the state continue to struggle through this economic downturn, now is not the time to hit these businesses with a tax increase.”
While most companies in the hospitality industry are upset about the proposed increase, one local business owner suggests the tax won’t affect his bottom line.
James Brennan, CEO of EnDev which owns Stingaree, Sidebar, Bar West and Universal, said the proposed tax won’t put too much of a burden on his businesses. Watch video where he talks about how the state is hurting.
“The alcohol tax for us is a fairly insignificant number,” said Brennan. “On an average Saturday night [at Stingaree] we may do up to $60,000 in pure drink revenue which translates on an average price to about 7500 drinks. So we’re talking $350 – 400 on a Saturday night. If it’s going to help get through the process I guess I’m for it.”
Brennan believes the greatest effect is going to be on the consumer at the supermarket and the liquor distributor adding, “We’re in a mess and there’s going to be some pain to get out of it.”
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The tax, and the proposed increase in sales tax must be approved by two-thirds of the legislature, which is now in special session.