Operators in spirited battles over alcohol-related legislation: Bill to double N.Y. liquor license fees draws shots

Nation's Restaurant News, Feb 25, 2002 by Paul Frumkin

ALBANY, N.Y. -- New York restaurateurs will have to dig deeper into their pockets to pay for their liquor licenses if state lawmakers approve a provision in this year's executive budget seeking a new fee increase.

Gov. George Pataki's state budget package for 2002-2003 is proposing to double the fees that operators pay each year for their liquor licenses, which in many cases could translate to several thousand dollars each.

"This is totally unacceptable to us," said Rick Sampson, president and chief executive of the New York State Restaurant Association. Arguing that operators still are reeling from the repercussions of the Sept. 11 terror attacks and a generally sluggish economy, Sampson said, "The last thing they need is this kind of increase.

In other developments changing the beverage environment, New York's state Assembly and Senate passed individual bills that would decrease the blood-alcohol threshold for drunk driving to 0.08 percent from 0.10 percent. The move to lower the BAC was sparked by the federal government's promise to reduce highway funding to states that don't comply with a proposed national standard. Thirty states already have passed laws mandating 0.08 percent as the limit.

And while the NYSRA intends to oppose state passage of the 0.08-percent legislation, Sampson called the increase in liquor license fees the "No. 1 issue for us this year."

While all license fees would be subject to 100-percent increases, they would vary depending upon where a restaurant is located. If the proposed budget bill, S.6260, passes in its present form, liquor licenses in the New York City boroughs of Manhattan, the Bronx, Queens and Brooklyn would jump from $2,125 -- which includes a surcharge -- to $4,250 annually. Fees for Staten Island would rise from $1,500 to $3,000. In cities with populations of more than 100,000 but less than 1 million, fees would increase from $1,200 to $2,400. In cities with populations of more than 50,000 but less than 100,000, fees would increase from $950 annually to $1,900. In smaller locations fees would go from $700 to $1,400.

Chuck Hunt, executive vice president of the New York City chapter of the NYSRA, said the fact that fee hikes are not based on the size of the restaurants or sales "could put the cost of a license almost out of reach for some smaller operators."

Nor do all lawmakers necessarily support the hike. Dan Weiller, a spokesman for Speaker of the Assembly Sheldon Silver, who represents the 62nd District in lower Manhattan, said that it was not possible to say whether the proposal will be in the final budget bill. However, he said that after examining the budget, he had come to believe that new liquor-licensing fees "may single out restaurants and taverns in an unfair way."

Assemblyman Richard Gottfried, who represents the 64th District -- which includes midtown Manhattan, Chelsea and part of the Upper West Side - said he opposes the increase. "While I gather that the fee has not been increased in a long time, doubling it in one shot would be a very heavy hit," Gottfried said. "It's especially a problem in New York City, where after Sept. 11 we've had a devastating drop-off in restaurant business.

"If this kind of tax increase drives even a small number of businesses over the edge, it would end up hurting the state's revenues."

Drew Nieporent, whose Myriad Restaurant Group operates eight restaurants in New York, said he "was not happy about [the increases]," though he can understand the governor's desire to raise funds. "It's certainly more than we want to spend," Nieporent said.

Sampson said the NYSRA already has met with representatives from the New York Department of Budget and "proceeded to tell them how we feel." Focusing on New York City, the aftermath of Sept. 11 and the ongoing economic problems, Sampson said he had asked the budget officials, "Why are you beating us up? This is not the time to double the license fees for this industry."

State officials have contended that the license fees have not been increased since 1976 - although there had been a surcharge added in the 1980s - and that the value has not kept up with inflation. "But that's not our problem," Sampson continued. "Suddenly, they decide to go for a 100-percent hike."

According to state figures, the State Liquor Authority collects about $35 million in fees and fines each year. Operating expenses for the agency are only about $13.7 million; consequently, the remaining revenue goes into the General Fund.

Sampson estimated that there are about 39,000 liquor licenses in the state.

In the meantime the NYSRA is facing an uphill fight in its attempt to keep the state's BAC standard at 0.10 percent. Both the Assembly and the Senate already have passed two different bills - A.8429 and S5476-A -- seeking to ratchet the blood-alcohol limit down to 0.08 percent in an attempt to decrease the number of automobile accidents involving drunk drivers. In addition, the governor also has crafted a bill that would reduce the limit to 0.08 percent.