Friday, May 3, 2013

Law Would Halve Mixed-Drink Tax at Music Clubs and Promote More Concerts


Tamir Kalifa for The Texas Tribune
Although the crowd of clubs and concert halls on Sixth Street, the famed Austin thoroughfare, is just a few blocks from the State Capitol, the worlds of live music and policy making seldom meet. But this session, lawmakers are considering subsidizing live music.

House Bill 3095, by Representative Mark Strama, Democrat of Austin, would cut in half the tax on mixed beverages for businesses that stage live music at least four nights a week for 45 weeks a year, provided they prove that they will spend the savings putting on concerts.

Mr. Strama proposed the bill with his hometown in mind. “Music is as much a part of the Austin economy as oil and gas are part of the Texas economy,” he said.

Some club owners and performers say the bill would help at a time when the music industry is suffering. But organizations representing cities and counties around Texas disagree, saying that the decreased tax would rob them of needed revenue, and that there is no proof that the savings would be passed on to musicians.

Nearly 200 Texas sites — roughly a third of them in Austin — would probably meet the tax-cut requirements, according to the Texas Music Office, an agency financed by the governor’s office.

The Legislative Budget Board, which studies the economic impact of potential legislation,estimated that the measure could cost the state, cities and counties $60 million to $80 million a year.

Mr. Strama said that projection was too high for the estimated number of eligible clubs and halls. He said he was working to get a lower figure before taking the bill back to a House committee, where it is pending.

In a letter to music professionals urging support for the bill, Terry Lickona, the producer of the nationally syndicated live music show “Austin City Limits,” wrote that with the downturn in profits for recorded music, “the industry’s primary business driver” is now live music. But club owners, he said, face “high start-up costs, high taxes and copyright fees,” so they need more incentives to book live acts.

“It’s hard to have a live music venue make money,” said Travis Newman, who books music for the Parish, a downtown Austin bar that regularly presents live music. “Musicians end up being squeezed.”

But the tax break would be “such a cost to the cities,” said Shanna Igo, the deputy executive director of the Texas Municipal League, an advocate for cities. (The Texas Municipal League is a corporate sponsor of The Texas Tribune.)

Donald Lee, the director of the Texas Conference of Urban Counties, said the tax breaks would be pocketed by the clubs and would not go to musicians. “We just can’t reconcile ourselves to the idea that live music venues in Texas are threatened by the current tax on alcohol, which there seems to be an insatiable appetite for, no matter what the price,” Mr. Lee said.

Mr. Newman acknowledged that some clubs would probably pocket the tax break. “But the cream rises to the top,” he said, “and bands will know which venues treat musicians well and pass on the savings.”

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