Bar and restaurant owners in Chicago say the effects of a recently approved alcohol tax increase could reach beyond the city’s hospitality industry.

Last Friday, the Cook County Board of Commissioners passed its $2.94 billion budget for next year. Among the cuts made to patch the spending plan’s nearly $315 million shortfall, the board approved increased taxes on tobacco products and titled property like cars and boats, doubled fees on vehicle stickers for unincorporated residents and assigned new daily parking rates at county courthouses.

The budget, which was approved by a 16-1 vote, also included a 50 percent tax increase on all alcohol sales in the county. That measure will add 6 cents to the tax on a 24-pack case of beer and no more than 50 cents to the price of a 750 milliliter bottle of vodka, according to a report from the Chicago Tribune.

Chicago already had the highest taxes on hard liquor in the country, and this hike marks the fourth such increase in city since 2005.

The amended booze tax is expected to create $11 million in new revenue for the county. Cook County Board President Toni Preckwinkle supported the decision by framing the tax increases for tobacco and alcohol as a gain for public health.

“We’re standing together because we all feel very strongly that this is the right thing to do both from a fiscal standpoint and a policy standpoint,” said Preckwinkle, before the budget passed. “Medical science, and study after study have shown that this is an effective way to promote public health and public safety, while being an effective way to pay for the services our government provides.”

But some in the hospitality industry didn’t buy the tax increase as a public health campaign.

Sarah Longwell, managing director of the American Beverage Institute, said that the tax increases would almost certainly have a “deleterious” effect on the hospitality industry’s job market.

Longwood, whose restaurant trade association focuses on alcohol policy around the country, said the county has already shed 13,000 hospitality jobs since the beginning of the recession, and that an additional 270 positions were expected to disappear as a result of the recently passed hike.

“While we understand that Cook County wants to raise revenue, we feel like our industry has been unfairly targeted and taxed over and over again,” she said.

In 2009, the Beverage Institute suggested that a similar state tax hike could have jeopardized Chicago’s shot at hosting the 2016 Summer Olympics.

In Chicago, reactions to the tax hike from business owners who peddle alcohol ranged from bitter to unsurprised.

Lincoln Station manager Ben Hamm said that while the tax increase would hurt, it was yet to be known whether customers would feel it.

“We’ll have to absorb the cost, because it’s not like a tax that is added onto the bill — it’s added onto a product that we’re buying,” he said. “Eventually we’ll trickle it down and add it to our cost of doing business, and if it’s making a margin that doesn’t hit, we’ll have to change the prices.”

Ald. Brendan Reilly (42nd) recently met with a group of bar owners at Butch McGuire’s bar, 20 W. Division St., where he discussed the potential impacts of the increase.

Butch McGuire’s owner Robert McGuire said Reilly opposed the raised tax at the meeting, suggesting that it could affect the city’s status as a player in the national convention industry.

“The city of Chicago and Mayor Rahm Emanuel are working very hard at making the city competitive once again in that market,” said McGuire. “A tax like this goes against that progress.”

Reilly currently has more than 650 liquor licenses in his ward.

Like Hamm, McGuire said that he will wait to see how his finances shake out after the raised tax goes into effect. But future increases, he said, would inevitably fall to the expense of the customer.

“Eventually, as these tax increases pile up, you don’t have a choice but to raise prices,” he said.

The county’s budget plan and the increased alcohol tax will go into effect at the beginning of 2012.

---

By Higher Taxes? from Chicago
Posted: 11/24/2011 11:10 AM

SO offram, you are in favor of more higher taxes for these reasons? Guess what, most lobbiests are lawyers and politicians.

---

By offramp
Posted: 11/23/2011 4:34 PM

Longwell's claims of patrols being more effective at saving lives than checkpoints fly in the face of overwhelming evidence to the contrary. Saying that hard core drinkers cause the majority of DUI crashes is just plain wrong. What she and the bar owners that are behind the funding of the American Beverage Institute are really after is keeping people buying as much booze as possible , keeping their profits up, and figuring that enough will make it home safely to come back for more booze.

---

By offramp
Posted: 11/23/2011 4:30 PM

Some of the associations Berman & Company have made up and front include ones lobbying for fewer restrictions on mercury tainted fish, smoking in public places, lowering the minimum wage, promoting high fructose corn syrup, tanning salons, and obesity. And, of course, being pro drunk driving. Their admonitions that MADD and other groups are actually teetotalers trying to bring back prohibition are ludicrous and unsubstantiated.

---

By offramp
Posted: 11/23/2011 4:27 PM

Just so readers are kept totally informed, Sarah Longwell is listed as the “managing director of the American Beverage Institute.” She is actually working for Berman and Company, a Washington, D.C. based company whose clients all have one thing in common – they don’t want anybody keeping them from making as much money as possible, no matter the consequences.