Dundalk Bar Owners Dealing With Alcohol Tax

Not surprisingly, Art Cox, the owner of the Hard Yacht Café on Cove Road, isn’t happy about the new alcohol tax that went into effect earlier this month.

He said he doesn’t have a choice but to pass along the added burden.

“Begrudgingly, we are going to collect it from the customers,” Cox said. 

For some establishments in the Dundalk/Edgemere area, like the Hard Yacht Café, the summer is the busiest time of the year and they fear the season will be negatively impacted following the July 1 state sales tax jump on alcohol from six to nine percent.

The alcohol tax increase is expected to raise an estimated $85 million a year, with about $47 million going toward school construction in the first year and $15 million for the developmentally disabled and other health care programs.

“I think they are singling out an industry,” Cox said.

Lorenzo Romiti, owner of Squire’s Restaurant on Holabird Avenue, said he’s making it clear to customers just where the price increase on the check is coming from.

“I called the computer company, and even tough I had a relatively older system, it was sophisticated enough to tax different revenue steams differently,” Romiti said. “It then changed the guest check and printed the check so it would be clear to the customer that the tax would be different for food and alcohol.”

John Minadakis, owner of Jimmy’s Famous Seafood, also on Holarbird Avenue, said he doesn’t plan to raise prices, but suggests it’s inevitable.

“Short-term, we will keep our prices the same, but long-term the distributors will increase their prices, so by default we will have to raise ours as well,” Minadakis said.

The increase in the alcohol tax, which came just a few years after the overall sales tax increase from five to six percent, was one of the more contentious bills debated during this past General Assembly session.

Governor Martin O’Malley signed the tax hike into law on May 19, stating the bill will have significant public health benefits as the increase will prevent almost 6,000 cases of alcohol abuse or dependence every year.

At least one bar owner balking at the increase isn’t happy with the Democratic-controlled state house and put the blame right there.

“People need to stop voting for Democrats,” said Woodrow Nash, owner of the Gray Manor Inn on North Point Road. “Mike Miller and Busch are the ones in Annapolis running everything. Their answer to anything is tax increases. I think they have a set of followers down there that look for ways to increase revenue in any way.”

Many opponents of the bill objected to the way late changes were made to allocate a large portion of the funds toward school construction for urban and suburban areas. Among those receiving funds from the tax were $12 million for Baltimore City, $9 million for Prince George’s County and $7 million for Baltimore County.

Among those that voted against the tax increase was

The Dundalk Democrat and chairman of the Baltimore County delegation said this was just the wrong time to be increasing taxes that impact small businesses so much. He also was upset that the bill was passed after a balanced budget had been approved, making the additional funds unnecessary.

“Our economy is very fragile right now and increasing taxes like this is going to have a negative impact on small businesses,” Olszewski said. “I especially feel for border communities like Ocean City, Cecil County and Western Maryland as customers are going to opt for cheaper prices across state lines.”

However, even with the limited funds going to health care needs, many of the bill's original supporters expressed gratitude for the state passing the legislation.

“With the passage of the alcohol tax, the Maryland General Assembly has led the way nationally by enacting prudent fiscal policy that both addresses the heightened need for disability services and accomplishes the public health goal of reducing alcohol abuse,” said Linda Raines, chair of the Maryland Mental Health Coalition, in a statement.  “We applaud our state senators and delegates for protecting people with disabilities in these tough economic times.”