A D.C. Council committee has nixed the mayor's proposal to extend bar hours in the District to raise revenue, setting up a second budget battle between the council and the executive branch even before their current one is finished.
The Human Services Committee rejected Gray's idea to raise $3 million annually by keeping the city's bars open one more hour, to as late as 4 a.m. on the weekends, and instead recommended raising the city's alcohol tax by about 6 cents per drink. The committee did, however, keep Gray's proposal to extend liquor store hours, meaning stores would open two hours earlier, at 7 a.m., but nixed keeping stores open on Sundays.
Committee Chairman Jim Graham has staunchly opposed keeping bars open later as his Ward 1 is home to many of D.C.'s nightlife hot spots like Adams Morgan and U Street.
He has called the nightlife noise a "major issue" for his residents and said Gray's proposal "would only extend that problem another hour."
The committee's proposed tax hike would raise an estimated $20 million, according to Graham, but faces heavy opposition from the liquor lobby.
The American Beverage Institute and the Distilled Spirits Council are both opposing the tax and pushing legislators to instead abolish the city's "antiquated" blue laws.
"Sunday sales will increase tax revenue without requiring residents and the recovering hospitality industry to pay a higher tax rate," ABI Managing Director Sarah Longwell said Wednesday.
Ward 2 Councilman Jack Evans, whose committee would eventually have to shepherd through such a tax, is also opposed to the idea.
Gray said Wednesday he had promised no new taxes on city residents in the 2013 budget and he intends to stick to that.
"I don't want to move to introducing a new tax when I said I wouldn't do that, but more importantly, I don't see anything flawed about the proposal we've advanced," he said.
The committee's recommendations would have to be approved by the full council, and any new tax would have to first go before the Finance and Revenue Committee. Gray could still push his bar hours proposal to the council as an amendment to the budget.
The blow comes just one day after the council blocked Gray's second attempt to push through a 2012 supplemental budget proposal that would have refunded city workers for four furlough days last year. That plan unraveled on the dais Tuesday even as Gray and Council Chairman Kwame Brown said earlier they had reached a compromise on the deal.
Examiner Staff Writer Alan Blinder contributed to this report.