Tuesday, December 12, 2006

Copping a Beer

City of Portland Politics Warning.

Been a host of zoning changes goin' on around here. All of it is targeted at preserving the 'liveability' of our fair city whilst permitting the inevitable growth. Managing retail expansion, IOW. Coming under review in this laudable effort to craft a great American city is the cost of policing Portland's "Old Port," a lovely section of town that used to be wharves and warehouses but is now home to small shops, restaurants, bars and clubs.

On Monday, the Old Port Night Life Task Force presented recommendations to the city council that would change the way fees are assessed and alter the zoning regulations for future development. A new boundary was proposed for the greater downtown area specifically for this licensing overlay, inside of which a rate hike for licenses tied to dancing, music and liquor permissions granted by the City. While the plan would raise the rates marginally for many restaurants and bars that are relatively far from the Old Port, some of the more notorious locales will see precipitous drops in their fees:
Councilor Edward Suslovic questioned why some restaurants would be tapped while the busy Pavilion nightclub on Middle Street would see its assessment for Old Port policing drop from $14,075 to $3,120. Suslovic also said he would support increasing license fees for 100 convenience stores and supermarkets citywide that sell "liquor to go."
Sixteen of the 24 business that pay the seat tax would see reductions in their overall fees. The Old Port Tavern, one of the biggest beneficiaries, would see its annual fees drop from $10,790 to $3,120. Fees would be adjusted annually to reflect fluctuations in the cost of extra police protection.

Essentially it's a flat tax for police protection (a meta-legislative issue: are we using fees in lieu of taxation--a subtlety seemingly picked up on only by Councilor Donoghue and the Task Force attorney), spread over an arbitrarily drawn area that seems to follow most closely the logic of a raindrop. I was also struck by just how little concern for governance some councilors evinced and how much a sense of district-provincialism was displayed.

After sitting in on the talk, without reading the report, I must say I oppose the plan.

One of the Task Force participants and Councilor Cohen felt that greater police presence is beneficial not just to the Old Port bars, but to everyone in the city who is open late. To me, this seems illogical and wrong on its face. As noted by Mr. Suslovic to the contrary, the police are drawn away from the outer districts to the downtown area, effectively leaving these places uncovered. Police are focused on the Old Port precisely because that's where the area of concern is.

It seems rather obvious that those who benefit from a service should be the ones to pay for it. That was the logic of the now-disfavored "seat tax." It is true that all of Portland benefits from the Old Port, and all of Portland benefits from Police protection. More germaine to this discussion, however, is the idea that if you're the source of the problem, you should be held accountable. The Old Port costs Portland. As some publicans are on record as saying, if you police yourselves, you don't need the Police. Last night I was thinking (not having a copy of the report to look at) that a GIS overlay of police calls, EMT calls and incidents reported with the location of bars, etc., could be a useful means of graduating a surcharge system for licenses.

For example: a basic, small hike in liquor license fees to everyone who sells it within city limits, including those that are takeaway places like Hannafords and RSVP or 7Eleven. Then, using the GIS overlay, tacking a surcharge on those locations manifestly responsible for the police/EMT calls--let's say a certain number of cents per call. This puts commerce at work for us by creating a purer econometric: the cost of doing business includes the cost incurred when your patrons are out of control. Call it the pollution model. We can figure out who costs Portland the most and we can make them absorb that cost. This creates a perfect incentive: police yourself effectively or pay us to do it for you.

Rates are assessed at license renewal based on the incidents reported in the prior year. A decrease amounts to a discount -- functionally a reward to doing better. I like this cost-sharing better than the flat-tax method proposed in the plan. It could have the added benefit of encouraging dispersal of venues as well, through simple economics: you know the OP attracts a high number of incidents and therefore a high cost for license. If you want to avoid that cost, establish elsewhere. No need for pesky 100 foot or 150 foot zoning regs that the Task Force proposes--the space will take care of itself. If a new business wants to open in the OP, take the average of the fee that is charged (or will be charged) to its two nearest neighbors--that's your starting surcharge.

The beauty of this system is that it can be applied city-wide. It fairly brings home the cost of policing a business to that business (Bubba's, let's say), without unfairly penalizing businesses that don't encourage that level of rowdiness (Thai Garden or King of the Roll, e.g.). And for businesses that argue that their area is generally rowdy even though not thanks to their patrons, the answer is, "that's the added cost of doing business in a location that is so beneficial to business. You profit from the very nature of the Old Port, help us keep it safe." It's also important to note that the money needed for the increased warm-weather policing ($61,000) amounts to a tiny fraction of the overall budget, about .02%

The Task Force plan is a windfall to bad actors. It has the opposite effect you'd want a regulation to have: rather than encouraging good behavior it effectively rewards indiscipline. It's imprecise where imprecision is unnecessary. And it is arbitrary, applying only to businesses within some conjured line. You've got to do better than that.

Photo of the Old Port (c) Dean Abramson, used without permission

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