Plan would hike liquor license fees

A proposal to substantially increase Oahu liquor license fees is expected to come under heavy criticism during a public hearing today before the Honolulu Liquor Commission.

The Hawaii Restaurant Association is urging its 500 members to testify in opposition.

“It continues to be a challenge to run a profitable restaurant in Honolulu,” said Tyler Roukema, the association’s board chairman and managing partner of Outback Steakhouse in Hawaii Kai.

Under the proposal, the annual liquor license fee would increase by more than $800 for many restaurants, a 70 percent increase. Manufacturers, wholesalers, retailers, caterers and every other category of liquor licensee would see similarly significant hikes as well.

After spiking in fiscal year 2018, the fees would drop somewhat in fiscal year 2019. The cost of a license for most restaurants would decline from $2,040 a year to $1,800, which is still $600 more than the current fee.

Anna Hirai, assistant administrator of the Liquor Commission, said the fee increase would be the first in 12 years and will help the commission meet escalating operating costs.

The agency’s special fund is the only funding source it has to sustain its operations at its current level of service while meeting expenses, Hirai said in an email.

The 2018 fee increase will help pay for a new $450,000 database system, she said, “which will provide licensees with a nimble, comprehensive digital repository of licensee information and increased licensee interface ability with their information and processes.”

The fees will decrease a year later after the database system is paid for. That is a requirement of a law that doesn’t allow the agency to set aside funds over several years to fund the project, she said.

“Because all licensees will use and benefit from this new system, all licensees are asked to share the cost by way of an across-the-board increase to basic license fees,” she said.

But Roukema said the increase is disappointing considering all the other fees and expenses that government charges eating establishments.

He said it’s likely many restaurants will pass along the expense to the consumer, making the price of eating out go up.

“Will it be a huge increase?” Roukema said. “After costing it out over time, it might not be so huge. But it’s just another expense that adds to the cost of dining out.”

The 4 p.m. public hearing will be held in the hearings room of the Liquor Commission, Pacific Park Plaza Building, 711 Kapiolani Blvd., Suite 600.