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Fri, May 24

Editorial: Owners pay twice for liquor license fee

The City of Prescott has a subjective liquor license fee that is 75 years old.

Apparently, the city fathers enacted the fee just after the end of Prohibition in the United States. The amount they picked was as much as $250 per year to hotels that sold liquor other than beer and wine.

In recent months, representatives of the Prescott Area Independents organization have cried foul for having to pay as much as $662 per year for bars and restaurants, among other fees. Local restaurant owner Barry Barbe said the fee in 1933 was a reflection of the times.

The PAI argument follows that city fees are arbitrary: $575 for hotel/motels; $530 for in-state and out-of-state producers, and governments; $354 for clubs, liquor stores, beer and wine bars, and liquor license application fees; $266 for beer and wine stores; $178 for domestic microbreweries; $62 for special events; and no fee for wholesalers.

Restaurant owner Roxanne Nielsen in March told the Prescott City Council, "We would like to find out ... why we're being singled out."

Barbe notes that restaurants serving liquor already pay a $585 liquor license fee to the state. In addition, he previously said, restaurants pay an annual fee to the county health department, as well as higher insurance and Workers' Compensation rates. All of those fees come with a service, he said, such as training or health inspections. On the other hand, he said restaurants "get nothing" for the annual liquor license fee they pay to the city.

On the city's side, officials say the revenue from the fees goes into the city's general fund, which goes to pay for public safety departments, including police and fire. Acting City Manager Laurie Hadley told the council this week, "If you ran our (police) call volume, you would see that there are a higher number of calls to alcohol establishments."

Thus, the city sees the fees as justified, though they still have not produced specific statistics proving that.

Management analyst Joe Brehm says the 1933 annual fee of $250 would equate to about $4,235 today - much more than the current fees. While the city has adjusted the fees over the years, the most recent change came in 2003, when the city raised the fees by 50 percent. Prior to that, the fees had remained the same since 1991.

So, the restaurant and bar owners should feel lucky? We do not believe so. Barbe does not either: "(We're) not asking for a burden on anybody, but when your neighbor pays nothing, and you pay a lot, it is unfair."

Since the fee was "arbitrary" when the city first established it, and the city has not kept up with costs - thus, no $4,235 fee today - the fee remains arbitrary.

In fact, it is merely money to the city. Prescott collects about $66,000 through the liquor license fees, and officials maintain that to do away with it, the city would have to find replacement revenue somewhere else.

What would be fair? It came up in 2009 and again this week - a general business license fee for everyone. Previously the council backed away from a business license fee when complaints surfaced and city officials said this week the idea will not work as intended.

The next time the topics come up, the council members should to do what is right, not what is popular.


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