MANHATTAN – At a time when many of our neighbors are facing staggering rent hikes and families across the city are being hammered with higher costs blamed on inflation, Upper East Side City Council Member Keith Powers is touting a tax money giveaway to businesses, already gifted additional revenue opportunities by local lawmakers.
Council Member Powers, who represents western parts of the Upper East Side as well as half of Midtown, announced the giveaway on Twitter, which will come in the form of a suspension of New York City’s liquor tax.
The tax, which bills businesses at a rate of one-quarter of their annual state liquor license fee, usually costs around $500 per year, according to the NYC Hospitality Alliance, an industry lobbying group whose members will directly benefit from the tax cut– and is hardly an amount that could save a bar or restaurant on the verge of closing.
Just like New York State’s temporary cut to the gasoline tax passed in the state budget last month, businesses aren’t required to pass along the savings to consumers.
In fact, the goal of the liquor tax suspension is to “put money back into [business owners’] pockets,” as Mayor Eric Adams described it on Thursday– letting bar and restaurant owners keep tax revenue that should have been going into the City’s coffers at a time when city services are being reduced.
“New York City is nothing without its restaurants and bars,” Council Member Powers wrote on Twitter announcing the measure on Thursday.
“As they climb out of debt and work to bring back customers, we need to do all we can to support their recovery,” he added.
New York City is nothing without its restaurants and bars.
As they climb out of debt and work to bring back customers, we need to do all we can to support their recovery.
Very proud to introduce a new bill with @NYCMayor & @JustinBrannan to suspend the liquor tax in NYC.— Keith Powers (@KeithPowersNYC) May 5, 2022
While bars and restaurants undoubtably had difficult times through the Covid-19 pandemic, they are hardly the only small businesses who struggled and are still struggling— not to mention New York City residents who are facing fifty-percent rent hikes in some cases, while paying higher prices for everything, due to rising costs blamed on inflation.
Currently there are no occupancy limits for New York City restaurants or bars and no requirements for them to check a patron’s vaccination status. The two restrictions that took a bite out of business owners’ revenue have been lifted, while new revenue streams have been created by the City.
Rent-free fully enclosed outdoor dining structures built on public space provide additional tables and seats, giving bars and restaurants the opportunity to pack in more customers than they would have been able to pre-pandemic.
New York State recently reinstated the sale of to-go alcoholic drinks— which were initially allowed because people were not allowed inside bars and restaurants due to Covid— becoming a new revenue stream for these businesses.
If these potential moneymakers weren’t enough, last summer the City Council passed a bill limiting how much third-party delivery apps could charge in fees to restaurants and bars for their service, which in turn led the delivery apps to shift more of the fees to the customer, primarily New York City residents.
Upper East Site reached out to Powers’ office to find out the thought process behind the new bill introduced today, which is a collaboration between himself, Mayor Eric Adams’ Office and Brooklyn City Council Member Justin Brennan, given those circumstances.
“Our cherished small businesses on the Upper East Side have been devastated by the pandemic, and are struggling to stay open every single day.” said Council Member Powers in a statement to Upper East Site.
“That’s why I’m taking immediate action with Mayor Adams to help our small businesses and ensure we’re not a community of vacant storefronts.”
The ‘immediate action’ of the tax cut was requested by the Mayor and comes three days after an Op-Ed from the NYC Hospitality Alliance was published in the New York Post demanding tax cuts for its members, who blame them for what they call New York’s “lagging recovery.”
Progressive activist and Democratic candidate for the 76th Assembly District, Patrick Bobilin, weighed in on bill late Thursday afternoon.
“Whenever a lobbyist, non-profit, or elected official says that a policy supports ‘mom and pop’ remember: Policy is driven by industry lobbyists, with six-figure salaries,” said Bobilin.
“Mom and pop don’t have lobbyist money. If a policy helps ‘mom and pop,’ it helps out wealthy competitors more,” the UES community leader added.
When asked by Upper East Site, Council Member Powers would not say whether he planned to introduce legislation to suspend part of all of New York City’s personal income tax, given his commitment to supporting those struggling financially as a result of the Covid-19 pandemic.