As if the COVID-19 pandemic hasn't made things tough enough for restaurants, bars and other venues that sell alcoholic beverages, those businesses could soon be paying more to the government just to continue operating. The Colorado Liquor Enforcement Division recently sent a letter to liquor license holders letting them know that a fee hike is in the works. Here it is:
Dear Liquor Stakeholders,
On July 1, 2020, The Liquor Enforcement Division will be raising application fees and certain other fees that we are allowed to adjust. This has been decided after careful consideration by the Department management and in conjunction with our budgeting office. The LED has been experiencing a drastic reduction in the amount of fees collected due to the pandemic, and this fee adjustment is necessary in order to maintain operations and our current levels of productivity and responsiveness. We do not take these actions lightly, and we appreciate your understanding as we work together in the months to come.
All affected DOR forms will be updated on our website on July 1, 2020.
Please let us know if you have any questions. We value all of our stakeholders and your understanding during these unprecedented times. As always, don't hesitate to reach out to the LED with questions or concerns.
The Colorado Liquor Enforcement Division
According to the Liquor Enforcement Division, the increases are still in the proposal stage and need to be approved by the state licensing agency, so it can't yet release information on how much those fees are going up.
The reaction to the letter has been mixed, like a bad cocktail. Some stakeholders point out that Colorado is one of the cheapest states when it comes to annual liquor license fees, so they say an increase won't make a significant difference. Others worry that it's another nail in the coffin when the state government is supposed to be helping small businesses survive the pandemic.
Chris Zacher, the National Independent Venue Association captain for Colorado, has a particular interest in the fee increase; he's also the executive director of Levitt Pavilion Denver, the outdoor music venue whose capacity has been slashed from 12,000 to 175 guests by Colorado's safe-distancing restrictions. "The line in the letter that states 'The LED has been experiencing a drastic reduction in the amount of fees collected due to the pandemic, and this fee adjustment is necessary in order to maintain operations and our current levels of productivity and responsiveness' is beyond tone-deaf," he says.
Through NIVA, Zacher has been working to get government relief and less restrictive reopening guidelines for his industry — not added expenses. He notes that large venues like Levitt Pavilion are currently operating at 0 to 25 percent of their normal customer base, and that they paid for liquor licenses covering nearly four months when the venues weren't allowed to operate at all. "In short, we’re handcuffed in the back of a car at the bottom of a lake and the state is trying to sell us on the air bubble in the back seat being a lifeline," he explains. "We’re waving a flag here. This is not a drill; the music scene as we all know it is not going to look the same very soon."
At Dazzle, owner Donald Rossa says that the increase isn't the main problem; rather, the challenge is that his license renewal fees — which are paid to both the city and state — are due in August. "Can we get the state to extend our licenses for four months for the non-use of our spaces for the past four months?" he asks. "We've got to look at an eighteen-month recovery program. I know that the city and state need the money to operate, but we all have to work together on this."
Rossa lauds the cooperation and creativity he's experienced in both the music and restaurant industries in compromising on expenses (though he got stuck with a kitchen full of food and no revenue to pay the bill when his restaurant/jazz club closed in March), and would like to see that same shift in thinking from government agencies and other service providers. "They're dictating their needs instead of working with us to find out what our needs are," he states.
When annual liquor license fees ring in at around $2,000 for a small business, a slight fee hike doesn't seem like a big deal. And if you own a liquor store that has seen a surge in business as people stayed home over the past few months, you're unlikely to complain. But for music venues, bars and other businesses that were forced to close for months and are slowly coming back, a fee increase feels like a personal affront at a time when every penny counts.