Newport is considering reducing its alcohol regulatory levy

Newport is considering reducing its alcohol regulatory fee, noting it would benefit anyone who retails alcohol.

Under Kentucky law, qualifying cities or counties may impose a statutory licensing fee of up to 5% on gross receipts from the sale of alcoholic beverages – distilled spirits, wine and malt beverages by each establishment. Newport’s levy is currently 2.5%, but the committee is considering lowering it to 2%.

A regulatory license fee may be imposed at the beginning of each fiscal period at an interest rate that is “reasonably estimated to fully reimburse the local government for the estimated cost of any additional police, regulatory or administrative expenses associated with the sale of alcoholic beverages in the city and county,” according to Kentucky statute.

“These revenues have actually increased year over year, which led us to consider a reduction,” Newport Mayor Tom Guidugli Jr. said. “So overall, there are more alcohol sales, which has increased money, which has led us to cut back.”

Newport City Manager Tom Fromme said the city is looking to the future with Margaritaville and other planned developments like Ovation that will increase revenue. However, he added that the city’s obligations and costs would also increase.

The first reading of the regulation took place on May 20. If Newport votes to reduce the fee on second reading, the ordinance would go into effect July 1, coinciding with the start of the city’s budget and annual review period.

“Anyone who retails alcohol must pay an alcohol regulatory levy that applies to all alcohol sales,” Fromme said. “And it has been 2.5% for the last four, five, six years whenever we originally introduced it. We recommend reducing this to 2% as a general rule so that everyone benefits equally.”

Fromme said it also removed non-profit events and charitable functions from paying the fee.

Newport Commissioner Ken Rechtin asked Fromme how the city achieved the 2.5% figure.

“We accept all reports from services dealing with alcohol establishments,” Fromme said. “Mr. Hayden (Newport’s deputy city manager John Hayden) tracks them at least once a week. So we have a constant volume of calls to facilities in the city. We also track all alcohol-related arrests, whether it’s a DUI, intoxication.” alcohol-related incidents, or disturbances resulting from alcohol consumption. We deal with all emergency calls related to alcohol-related accidents, and we also devote time to our administrative staff.

Newport Chief Financial Officer Lenny Kuntz said each department, such as alcoholic beverage control administrators, law enforcement, police and fire departments, submits their data monthly.

“I saw the revenue reports and it looked like somewhere between $900,000 and $1 million, which is the current regulatory fee for this year,” Rechtin said.

Fromme pointed out that anyone who holds a retail license and pays the regulatory fee will receive a license fee refund under the program.

“So it’s not necessarily all going to come to the city,” Fromme said. “If they spend $5,000 on licensing, they get that amount back every year as a regulatory fee. Owners also derive some benefits from this. That is, if they pass the cost on to the consumer, they will actually receive a license from that fee.”

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