Crowd to Dan: “BOOOOOOO!!!!!!!”
Spotlight hogger Dan the Dictator was also booed as he rode in a car down the route for the Steelers victory parade a few days after the Super Bowl. Steeler Fans clearly do not love Dan.
“Dan, it’s called the law of supply and demand . . . . Let me explain.”
We all know that Dan the Dictator is a CPA and an attorney, as well as the smartest guy in any room not occupied by Barack Obama. Now we also know know definitively that the County Diminutive is no economist.
Dan the Dictator has continually claimed that the Drink Tax has had no negative economic impact in Allegheny County. While a ridiculous claim on its face, it is made more ridiculous by figures released by the Commonwealth of Pennsylvania Liquor Control Board.
The LCB has released its wholesale purchase figures to licensees from 2008. The figures show that licensee purchases of beer and wine in Allegheny County were down in 2008 were down 4.2% from 2007 — thats $1,973,596 less than the previous year. In the meantime, licensees in the five counties surrounding Allegheny purchses 4.2% more wine and liquor than the previous year. Statewide, licensee purchases were up by .5%.
Put another way, the increase in sales in the five surrounding counties accounted for 59% of the overall state increase.
Wholesale wine and liquor are the raw materials in a restaurant and tavern’s final product, the retail drink. If wholesale sales are down, so are retails sales. The long and the short: patrons are manifestly choosing to frequent restaurants and taverns in neighboring counties to Allegheny rather than in Allegheny County itself.
Milton Friedman, we beseech you. Come to Pittsburgh and give a lesson or two in Econ 101 to our County Diminutive.
The L. A. Times ran a recent story on how, in down economies, consumers will trade down premium liquors, wines and beers for economy versions, or will just stay home. But the hospitality industry is not hurting, right Dan? http://www.latimes.com/business/la-fi-happy10-2009jan10,0,3884861.story?page=2
Off the topic, an article in the Toronto Globe & Mail talks about the Portuguese wine Madiera being the toast of choice of presidents historically (appropos to our new President being inaugurated in a few days). http://www.theglobeandmail.com/servlet/story/RTGAM.20090114.wdecanter14/BNStory/lifeFoodWine/home
Dan can toast himself with Madiera during his victory celebration in Harrisburg in 2010. In his dreams.
Nation’s Restaurant News ran a recent story noting that this is the most challenging time in history in the restaurant industry, and sharing survival strategies of national operators.
“Why don’t those nasty boys leave you alone, Dan?”
Joseph Sabino Mistick, erstwhile (read unsuccessful) judicial candidate, member of the Allegheny County political machine, and Luciano Pavrotti lookalike tells Drink Tax opponents in the Tribune Review that they have overplayed their hand. http://www.pittsburghlive.com/x/pittsburghtrib/s_606454.html
First, he notes that the Drink Tax opponents should be satisfied with Dan’s (grudging) lowering of the tax to 7%, and appear ungrateful since they don’t.
Then, he somehow spins a court victory for Drink Tax opponents which prevented Onorato from transferring Drink Tax monies into a defeat. Supposedly, this is because Dan the Dictator thinks he can direct Drink Tax monies overcollected in 2008 directly to the Pork Authority for capital projects. That may be so, but it misses the point: Because of this judicial decision, Dictator Dan cannot now or in the future stick his snout into the Drink Tax fund for his pet projects on the General Budget. It also means it’s less likely that he will try to raise the tax back to 10%. So please, Pavrotti, either think of the big picture or limit your comments to your local ward committee meetings.
The Allegheny Institute (not to be confused with the hypocritical running dog Allegheny Conference) has given thoughtful analysis to the Drink Tax question. Here is a link to it’s website. http://www.alleghenyinstitute.org/drinktax.php?gclid=CIT3_4KSiJgCFQGHHgodPjIJDw
The Post-Gazette, one of America’s Great, Most Spendiferous Newspapers, earlier this week ran an article detailing how some taverns have not lowered their drink prices (for simplicity, many bars include the tax in the price of the drink) despite the lowering of the Drink Tax from 10 to 7 percent. http://www.post-gazette.com/pg/09006/939857-85.stm
Putting aside the fact that this story comes right out of the Dictator Dan/ Rich Fitzgerald/ Kevin Evanto talking points, the story features a gaping hole in its reporting.
The Sports and Exhibition Authority is a joint County-City authority. The SEA owns PNC Park, Heinz Field, and Mellon Arena. The SEA contracts with Aramark, a Philadelphia company, to sell concessions at those public arenas. When the Drink Tax went into effect, Aramark rather notoriously raised its beer prices in excess of 10% in order to “round up” to the nearest quarter in order to keep its transactions simple. Thus a beer that cost $6.50 pre-tax went up to $7.25 — an 11.5% increase (the price would have been $7.15 with the tax at 10%).
Now with the tax at 7%, Aramark could easily lower beer prices by a quarter and not feel any ill effects on its margins. 3% of $7.50 is 22 cents. Since the beer price was raised by an extra dime in the first place, Aramark is still overcharging for the tax if the price was reduced to $7.25.
But the P-G never asked that question. And thus the County Diminutive has never answered, ”Why doesn’t the County instruct its authority to instruct Aramark to lower its prices?” Why wasn’t the question asked? Who knows? Dan hasn’t answered it because he would rather have the press pick on Mom and Pop bar owners than corporate fat cats like Aramark who stand to make an extra $25,000 per Steeler game leaving their pricing in place.
The Post-Gazette, one of America’s Super Great, Unbelievably Keen, Indescribably Superlative Newspapers, has been on the wrong side of the Drink Tax issue from the start. No surprise there, given the axis between Dan “the Dictator” Onorato to the Post-Gazette editorial page to the Allegheny Conference.
A few days ago, the P-G editorial page for once got it right when it criticized Il Duce for trying to grab Drink Tax revenues for general County pork spending.
Then, just when you thought it was safe to read the P-G, Editorial Page Editor Tom Waseleski comes out with this little bit of ill-reasonsed dribble on his blog:
“Tom Waseleski”
“The never-ending skirmish over the drink tax in Allegheny County is fraught with ironies. One is that the tavern owners, restaurant operators and Republican County Council member who sued to ensure that every dollar of the tax went to public transit weren’t actually concerned about funding the Port Authority. They wanted to torture Dan Onorato, the county executive who initiated the tax. And they did, up to a point. . .
The latest irony comes in words from Kevin Joyce, owner of The Carlton restaurant and a stalwart opponent of the drink tax. . . . The county cut the tax rate to 7 percent for 2009 after seeing that it generated more revenue last year than needed. What’s startling — or maybe not surprising — is that after a year of hammering away at the county for over-taxing taverns and restaurants, Joyce rationalized in today’s PG about the same establishments over-taxing their customers by not reducing drink prices after the tax rollback.
Joyce said, “A good case could be made for bar owners hanging on. There’s never been a tougher year than 2008 for the hospitality industry. From the drink tax, to the increased costs, then demand decreased, and then in the fourth quarter, the economy crashed and people weren’t spending as much disposable income.”
It’s true Joyce is in a tough business. So is anyone in government. Onorato feels his pain.”
Tom: I’ll go through this slow so that you’ll understand.
Bars and restaurants are private businesses. They can charge whatever price they want. If customers think those prices are too high, or think that they’re being taken advantage of, they can and will go elsewhere. The bar or restaurant will suffer diminished sales as a result. People have a choice in this private transaction.
Allegheny County is a governmental entity. It uses its taxing power to coerce customers and businesses owners into paying a percentage of each retail drink transaction to it in the form of the Drink Tax. Unlike with a private business, the customer has not choice. If he wants the drink, he pays the tax. In the meantime, the County takes its cut without investing anything into the process and without taking any risk. All it does is reap the reward when the transaction is completed. If the tax causes prices to rise to the point where demand suffers, too bad. Pay up.
“Kevin - now that you’ve enlightened me on state sales tax policies, I wonder if you might let me know the price of a loaf of bread . . . . “
Kevin Evanto, chief mouthpiece for County Diminutive Dan “the Dictator” Onorato, as quoted in the Pitt News:
”One thing that I think they confuse in the issue is they say that it’s a tax on the hospitality industry of bars and restaurants,” said Evanto. “It’s not. Visitors of Allegheny County, people not only from the counties around us but other states and countries who come here to visit and buy a drink in a restaurant or bar, they’re paying the drink tax. It’s a consumer tax. It’s no different than if you buy food at Giant Eagle or you buy a sweatshirt at the Pitt shop. You’re paying sales tax, it’s a consumer tax.”
Uh, Kevin? This is Pennsylvania. We don’t tax clothing at retail or food in a grocery store. However, it is nice to see that our County administration is so in touch with the lives of everyday people.
See the whole Pitt News article here. http://www.pittnews.com/news/in_first_year%2C_drink_tax_revenues_overflowing
