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D.C. poised to rake in $42 million from 'sin taxes'

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Local,DC,Alan Blinder,Taxes,Vincent Gray

The District is on pace to take in more than $42 million in so-called "sin taxes" during its fiscal year, a haul that would fall short of the city's record but still represents a sharp increase from its 2012 collections.

Records from the city's chief financial officer show that the District collected nearly $15.2 million in cigarette taxes during the first five months of its fiscal year. By the same time in the 2012 budget cycle, D.C. had brought in $13.5 million from its cigarette tax, which is among the nation's highest.

Revenues from alcohol sales have climbed by about 7 percent to nearly $2.5 million, up from $2.3 million a year ago.

The tax revenues have put the city on course for a $42.4 million payday -- about $1.8 million more than the District took in last year -- that would mark the fourth consecutive year of increased revenues tied to cigarette and alcohol taxes.

A spokesman for D.C.'s Chief Financial Officer Natwar Gandhi said tax officials believe most of the gains stem from longer bar hours and a slight increase in cigarette excise taxes.

"While it is difficult to attribute all of the increased collections to these particular initiatives, it is very likely that they contributed," David Umansky said.

Mayor Vincent Gray welcomed the uptick in tax dollars, which he said could be tied to the area's climbing population.

"We need to recognize that the population is growing and that the number of tourists in the city is growing," Gray told The Washington Examiner.

"We've got a lot more bars and a lot more restaurants in the city, so you've got a lot more people coming into the city."

Government statistics show that the District is adding about 1,100 residents a month to its population, and is also attracting more tourists and business travelers.

Gray said that because of those increases, he was far from certain that the rise in revenues meant residents were picking up new vices.

"I don't know that it means that more residents are engaging in smoking or engaging in drinking," Gray said.

Kyle Rees, a spokesman for the Restaurant Association Metropolitan Washington, said the influx of visitors for January's presidential inauguration could have contributed to the increases.

But he also said restaurants and bars are seeing that patrons are increasingly willing to fork over more money for trendy drinks.

"I think what they're choosing is what they perceive to be higher quality products, and I think the District's restaurants and bars are able to support that," Rees said. "They know how to make good drinks and people will pay for them."

ablinder@washingtonexaminer.com

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