Alcohol and rental cars are about to get more expensive in Allegheny County.
County Council voted Tuesday night to enact a 10 percent tax on poured alcoholic drinks and a $2-per-day rental car tax to help fund the Port Authority and plug a $30 million hole in the county budget.
Votes fell largely along party lines, with Democrats overwhelmingly supporting the two taxes.
Republicans Matt Drozd of Ross, Vince Gastgeb of Bethel Park and Jan Rea of McCandless opposed both measures. Democrat Jim Ellenbogen of Banksville opposed the drink tax, which passed 10-4-1, while Republican David Fawcett of Oakmont voted against the rental car tax, which passed 11-4.
Nick Futules, a Verona Democrat, abstained from the drink tax vote because he owns a banquet facility with a liquor license.
"This council has been extremely diligent in holding the line on taxes," said Council President Rich Fitzgerald, D-Squirrel Hill, who said county taxes on a $100,000 home have dropped from $422 in 2002 to $398 today. "I wish there were another choice."
Response to the new taxes was negative, as dozens of restaurateurs stormed out of council chambers.
"It's not over," said Tom Baron, who runs several restaurants through the Big Burrito Restaurant Group. "We're going to fight it any way we can."
"It's a travesty," said Kevin Joyce, who owns The Carlton, Downtown. "Every council person who voted for it ... the bars and restaurants in their district will know about it."
Joyce said there is "no question" he will pursue legal action to stop the tax.
County Chief Executive Dan Onorato, who backed the two-tax option proposed by Harrisburg, called the vote "a victory for all property owners in Allegheny County."
"For the fourth consecutive year, my administration has successfully held the line on property taxes," he said.
"I commend County Council for providing the critical local matching funds that will ensure continued public transit service in our region and all the economic benefits derived from that service," Port Authority CEO Steve Bland said.
The county money will help the Port Authority get $183 million in state funding, he said.
While council's Democratic supermajority backed the new taxes, it offered to help the hospitality industry.
Council agreed to lobby to increase wholesale discounts for liquor license holders. It also endorsed a plan to ask Harrisburg to offer the drink and rental car taxes to every county in the state.
Several last-minute attempts to thwart the two-tax solution died.
A motion introduced by Gastgeb made $18 million in budget cuts but depended on tax lien sales and $7.5 million from nonprofits to balance the budget.
Fawcett proposed one measure calling for a 5 percent drink tax. He also offered a plan to increase property taxes 6 percent, instead of the 12 percent hike proposed by former Councilman William Lestitian, D-Brookline.
"We, on this body, have never raised taxes in the seven years I've been on council," he said. "We can lead by offering compromise."
The new taxes
On Jan. 1, Allegheny County will begin collecting an estimated $30 million a year in new taxes from poured alcoholic drinks and rental cars.
But it could be several months before the Port Authority learns what it needs to do to get the money.
County Chief Executive Dan Onorato issued an executive order saying the Port Authority needs to put its financial house in order before the county hands over millions in new tax dollars. The order, however, alludes to cost restructuring and legacy costs without providing details.
"We can't put in specifics because we still have to negotiate the contracts," Kevin Evanto, an Onorato spokesman, said Tuesday.
Onorato could take part in contract talks between the Port Authority and Amalgamated Transit Union Local 85, which represents about 2,200 active members, Evanto said. Onorato and County Manager Jim Flynn were involved in past negotiations.
Onorato has time to work out specifics of his financial demands because the transit agency's fiscal year does not start until July 1, Evanto said.
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