RACINE - Those businesses seeking liquor licenses after the city reaches its quota could pay $10,000 instead of $500, per an alderman's proposal.

After the city's 128 available Class B licenses - to sell alcoholic beverages for on-site consumption, such as bars or restaurants - are given out, the city has 22 reserve licenses available, by state law, for $10,000.

Alderman Greg Helding's proposal - to stop offering a $9,500 rebate for reserve Class B liquor license fees - came before the Public Safety and Licensing Committee on Monday night. It was deferred until the next committee meeting in December, said Committee Chairman Aron Wisneski.

"To me, it doesn't make sense to (offer the rebate), because the whole point was to limit the number of licenses available and make the existing licenses a little bit more valuable," Helding said.

That was the idea when the Tavern League of Wisconsin supported charging $10,000 for reserve licenses, said Joey LeGath, director of the League's city branch.

A reserve license grants the same rights as full-fledged licenses.

"Because the licenses out there would be worth more," he said. "And the thought was there were enough (licenses) out there."

Existing license holders would not be affected. The $10,000 fee would only apply the initial year.

"There's a reason the state law went into effect the way it did, and we shouldn't be counteracting that," Helding said. "The rebate eliminates the concept of this being a quota."

The quota exists to limit liquor licenses and reduce its negative impact on a community, he added. And it would also be an additional revenue source the city has been freely giving away.

The rebate was instituted in 1998, under Resolution 1685 "as a business development effort," according to the resolution.

Jim Smith, Racine's mayor at the time, said the rebate had been to help restaurants, bars and similiar establishments that were otherwise "restricted" by the state law regarding reserve licenses.

Helding said he thought the rebate had been eliminated a while ago. He found out it was still in place when it came up during the last budget discussion that there wouldn't be revenue from reserve licenses because of the rebate.