I am not recommending liquor sales on Sunday.It was previously reported I might - but let me say here now that I will not support that.

— Jim Graham (@JimGrahamWard1) April 30, 2012


It looked as though the District might lose its distinction of being one of the last big cities in America where liquor stores remain closed on Sundays.

But the trial balloon D.C. Council member Jim Graham (D-Ward 1) floated last week has popped: Graham said at a budget hearing this afternoon that he would no longer support Sunday package sales. He did not immediately give a reason why.

Graham said that rather than use the Sunday sales revenue to help defeat Mayor Vincent C. Gray’s proposal to extend late-night bar hours, he would instead opt for an increase in the alcohol excise tax amounting to about six cents per drink.

“We have heard from those [advisory neighborhood commissions] representing the nightlife centers and they don’t want longer bar hours,” tweeted Graham, whose committee oversees alcoholic beverage regulation.

The excise tax hike, Graham said, could raise $20 million yearly. Killing the bar-hours extension would require $3.2 million, though Graham has also sought funds to alleviate various social service cuts proposed by Gray.

UPDATE, 4:45 P.M.: Graham said his abandonment of the Sunday sales was less about backlash from concerned constituents and more about math: “I thought, maybe, it might be possible to assemble various savings and revenue, but the only way I know of to reverse the extended hours is though the excise tax.”

Graham’s preference is to enact an excise tax hike, charged to wholesalers, that would amount to six cents per drink, raising $20 million. Why that much? Because, he said, $20 million would fund his top three budget priorities: killing the bar-hours proposal, restoring homeless service cuts and rolling back limits on welfare eligibility.

Whether his colleagues agree with his particular priorities — and the $20 million needed to fund them — remains to be seen. “It could be less; it could be more,” said Graham, explaining that the excise tax can be calibrated to his colleagues precise level of spendiness. A 10-cent-per-drink tax, for instance, could raise a cool $34 million.

But Graham has to deal with council protocol, which demands that tax changes pass through the Finance and Revenue panel, not Graham’s Human Services panel. And finance chair Jack Evans (D-Ward 2) is not so keen on an excise tax increase. “That’s a bad idea because we’re already pretty high,” he said. (D.C.’s alcohol excise taxes are generally equivalent to Maryland’s and lower than Virginia’s.)

Evans’s idea: “What Jim has to do is look at Human Services, the committee he chairs, and think about reining in the spending.”

However, Evans doesn’t have the final word — particularly if other members are aching for a piece of the revenue increased excise taxes would generate. In recent years, major tax hikes have been added to the budget after each council committee has passed its recommendations.

UPDATE, 6:35 P.M.: Graham already has opposition to his tax hike plan from the Distilled Spirits Council of the United States, which is claiming the hike would be “devastating” to cross-border alcohol sales.

“Graham’s proposal to raise the already burdensome tax rate on drinks in D.C. would hurt restaurants, bars, liquor stores, and the thousands of men and women they employ in the District,” said Jay Hibbard, a vice president of the group. “Repealing the outdated Blue Law ban on Sunday alcohol sales would be a far better way to generate revenue than raising taxes.”