alcohol – Alaska Politics and Elections

It’s Time to Support the Hospitality Industry

Editor — Fri, 24 Apr 2020 21:22:09 +0000

By Frank Dahl

April 24, 2020

For many of us, the sudden realities of the COVID-19 pandemic are like a slap in the face. Visceral emotions and anxiety, tangible losses, a plummeting economy of closed businesses, and $10 barrels of oil. The carnage and catastrophic damage from illness and financial decimation will be long-lasting.

As I try to equate hardships from a positive vantage point, defaulting to a “could be worse” perspective, in the case of Alaska’s hospitality market – particularly in Anchorage, optimism is tough to come by.

I’ve owned enough bars, restaurants, and retail stores over five decades to understand the basics of economy and cycles. Weathering the storm of consumer downturns or cost overruns is part of a hospitality business owner’s existence. We’re used to it. Even new taxes and fees, while not favored, can come to fruition if short-sighted policymakers and anti-business advocates gain an edge in public sentiment. Our industry is one of perseverance, consistent service delivery, and accountability.

But the most recent Municipality of Anchorage election, and the passage of a new alcohol tax, makes me take pause. Perhaps the hospitality industry is entering a new dawn? One where the public and government minimize its importance and place little value on the tens of thousands of employees and their families in the industry.

I’m perplexed at how the voters in Anchorage could even remotely endorse taxing the hospitality industry at the same time the industry has been shuttered and forced to close. Bankruptcies, defaults, droves of staff laid off, unemployment skyrocketing, relied-upon patronage rethinking social eating and drinking… the prolific effects of COVID-19 may very-well have hobbled the hospitality industry for years to come.

Examples of the canceling of the cruise ship season, coupled with massive reductions in flights and hotel reservations, and restaurants and bars being closed are the most in-your-face results of our pandemic. Add to the equation temporary closing of movie theaters, bingo, and charitable gaming venues, bowling alleys, entertainment centers (e.g. fun centers; trampoline parks; laser tags), and myriad recreational establishments, and suddenly we’re in a literal calamity of epic proportions.

So back to the tax that only a slim majority of Anchorage voters barely approved.

For those that voted “yes,” why on Earth would you be duped into thinking a new tax on alcohol sales will reduce crime, lessen homelessness, or resolve mental illness rife throughout the Municipality?

I oppose alcohol tax, from an industry perspective, because of five primary reasons:

(1) A new tax sends a derogatory message to patrons and industry employees that we’ll all be penalized even in a downturned economy – and it suggests alcohol is bad (hence the label “sin tax”);

(2) A new tax nudges patrons who were already considering eating and drinking at home – to do so because now they’re unsure how much more expensive their food and beverages will be after a tax, which causes a domino effect of lost revenue (e.g. the fuel used to drive to an establishment; no baby sitter used; no parking fees paid downtown; and of course, no patronage at establishments so the wait staff earns less and food services are lessened and distributors deliver less…rippling into a depreciated economy);

(3) Earmarking and promises of curing societal woes through a tax hike on food and drinks (or a hotel room or rental car or airline ticket or chewing tobacco or cannabis or vehicle fuel…) are illusory and almost never results in a community benefit or measurable resolution to civic problems;

(4) Government at many levels is too big or inefficient, and lacks accountability, so adding more money to political coffers is throwing caution to the wind; and

(5) In consideration of the pandemic before us, adversely affecting industries across the spectrum globally, a new tax NOW is offensive and insulting to an industry that’s foundational to Alaskan commerce;

Rather than shame the pro-tax, anti-hospitality industry electorate, and policymakers, I’ll try to be thoughtful and positive.

The food, beverage, lodging, and transportation facets of the Alaskan hospitality industry are integral to the state’s economy. All totaled, our industry is likely the second-largest sector after natural resource development.

The havoc thrust upon employees by COVID-19 will cause irreparable harm in some cases – and severe business injury to nearly all others. This is pure devastation.

Don’t even consider a tax (and preferably repeal the Anchorage alcohol tax just passed).

To all of the government leaders, please help our industry now. Allow doors to be open and services to be rendered!

To past, current and prospective customers, please buy from, shop at, and patronize hospitality services as much as you can afford to start our economic engine.

Solidarity in support of the hospitality industry is critical now, more than ever.

The havoc thrust upon employees by COVID-19 will cause irreparable harm in some cases – and severe business injury to nearly all others. This is pure devastation.

It’s time for the members of the state’s executive and legislative branches at all levels, from municipal to borough, state to federal, to rise to the occasion and actively support the hospitality industry. Don’t even consider a tax (and preferably repeal the Anchorage alcohol tax just passed).

And while we’re at it, let’s thank people in the industry and show our appreciation for what they’ve faced, and risk, as they serve all of us every day and stand at the front lines of business.

We’ll get through this pandemic and hopefully be the better for it, God willing without new fees and taxes, and motivated because of how vital our beloved hospitality and tourism industries are to the Last Frontier.

Frank Dahl is a former board member of Alaska CHARR, co-founder and former President of Anchorage CHARR, and longtime bar and restaurant owner. He’s a Paul Harris Fellow in Rotary and Alaska Legislative Citation recipient for community and economic service to the state of Alaska.

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Another Try at an Alcohol Tax in Anchorage

Alex Gimarc — Wed, 04 Mar 2020 16:50:59 +0000

They’re back. The Assembly, the Mayor and the local media are back for their third try at an alcohol tax, the second in two years.

The initial attempt to impose a 5.5% alcohol tax floated by Ernie Hall in 2015 failed to get out of the Assembly with a 6-5 vote.

The current Assembly was back at it last year putting a 5% sales tax on retail sale of Alcohol on the ballot. The proposition failed with 53% of the general public voting no. I had an article on the tax in APEOnline Nov 2018. The rationale for defeating the tax has not changed over the last 15 months.

The Assembly is back, apparently believing that the third time’s the charm. You can find actual language for the initiative here. This time around, they’ve tweaked the presentation a bit, dedicating whatever is raised after paying admin, collection and audit costs to the following uses:

Funding for police, related criminal justice personnel, and first responders;
Funding to combat and address child abuse, sexual assault, and domestic violence; and
Funding for substance misuse treatment, prevention programs, detoxification or long-term addiction recovery facilities, mental and behavioral health programs, and resources to prevent and address Anchorage’s homelessness crisis.

All Motherhood and Apple Pie stuff; all on the backs of responsible drinkers of adult beverages in this town. Roar right on out and vote for that sucker, right?

Not so fast.

What this Assembly and Mayor are playing is the bright shiny object game, proposing a new tax on alcohol sales that they promise (in not so many words) to solve all the Muni problems that have grown on their watch, during their time in office, presiding over this mess.

What they are not telling you is that money is fungible. This means that every penny they raise to put in these buckets, is a penny they can quickly swing from those buckets to spend on other things, like turning over public parks, greenbelts, to the homeless, or deploying port-a-cans for their sanitary needs. Here’s the actual language:

(e) The net receipts described in subsection (b) shall not be used to supplant funding for existing service levels contained in the actual operating budget for fiscal year 2020 and the funding to provide for and maintain that level of service in subsequent years. The dedicated net receipts shall only be used to provide additional service levels above the 2020 baseline.

Although the ordinance has language that promises the new money will be additive to current expenditures in these areas for the length of the 2020 operating budget, the Assembly can (have and will) change that budget baseline by a simple majority vote.

In short, they are very conveniently and cutely executing a bait and switch in front of Anchorage voters, all tied in a shiny “trust me” magical bow. There is a famous scene out of Animal House on the dangers of “trusting us.” As the scene is NSFW, I won’t provide the obvious and hilarious link to the video. As usual, your mileage may vary.

And if we’re dumb enough to trust a group of people who exude incompetence from every pore of their political bodies, we embrace democracy as described in the words of HL Menken:

Democracy is the theory that the common people know what they want, and deserve to get it good and hard.

The final piece of this ordinance exempts sales taxes on alcohol in the Muni Charter from the three-fifths majority requirement for a new tax, moving that down to 50%+one of qualified voters voting on the question. Further, like the change in the Muni Charter that allowed Mark Begich to avoid a runoff when he was first elected mayor, both the new tax and the exemption to the three-fifths majority to bust the tax cap immediately go into effect upon passage. Here’s the actual language:

(b) Unless otherwise provided in this Charter, no sales tax ordinance is valid until ratified by three-fifths (3/5) of those voting on the question at a regular or special election, except the taxes imposed by Charter § 14.05 and § 14.07 shall be effective if approved by a majority (50%+ one) of the qualified voters voting on the question.

If approved by a majority of the voters voting on the question at the April 7, 2020 Regular Election, the amendments to the Charter above shall be effective upon certification of the election.

This means they can be back again and again and again whenever there is not quite enough money for this or that or something else. The proposition should be defeated out of hand for this alone.

Nothing has changed over the last year on this alcohol tax other than promises from a group of people who have demonstrated quite clearly that they no longer deserve our trust. Put this tax out of our misery. Also remember the people who are floating this and do your level best to run as many of them out of office as possible in April’s election. I know I will.

Alex Gimarc lives in Anchorage since retiring from the military in 1997. His interests include science and technology, environment, energy, economics, military affairs, fishing and disabilities policies. His weekly column “Interesting Items” is a summary of news stories with substantive Alaska-themed topics. He was a small business owner and Information Technology professional.

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