Photo by justindc

The Restaurant Association Metropolitan Washington is doubly angered with the D.C. Council after a committee voted yesterday to reject Mayor Vince Gray’s proposal to allow bars to stay open later and but endorse an increase in the alcohol excise tax.

In a statement, RAMW said the votes by the Human Services Committee displayed a “startling lack of support” for the District’s hospitality industry. The panel, which is chaired by Jim Graham (D-Ward 1), voted 3-2 against a proposal that would permit bars to stay open an additional hour, which would bring the city a projected $3.21 million in additional sales tax revenue to help plug an expected budget gap of $172 million. Instead, committee members recommended increasing the sales tax on alcoholic beverages above the current level of 10 percent. Graham projects such a measure could raise as much as $20 million.

But the restaurant owners say they’d rather not pass on an additional tax burden to their customers, saying it would only hurt the District’s small businesses. “Quite frankly, there are no other words for it,” RAMW president Lynne Breaux said in the press release. “Our city’s hospitality businesses are startled, and they are angry.”

Graham’s Ward 1 is home to 16 percent of the District’s establishments that are licensed to serve alcohol.

If the tax hike goes through, the price of a drink to bars and restaurants would rise by six cents, RAMW says, but the actual cost endured by customers would be higher once “pass-along” costs are figured in.

“Bottom line, this is a loss/loss,” Breaux said.