The Allegheny County Board of Elections yesterday ruled that both referendum questions on the 10 percent drink tax should not be placed on the November ballot because they are illegal according to county and state law.

In a ruling that seems to be a bigger blow to the restaurateurs and bar owners than it is to the county, the three judges temporarily serving as Board of Elections members unanimously declined to certify either ballot initiative.

Bar and restaurant owners wanted to decrease the drink tax to 0.5 percent from 10 percent. The county wanted a referendum to offset a loss in drink tax revenues with a property tax increase.

The county judges, appointed to replace the regular board members because of their public positions on both measures, cited established case law -- Hempfield School District v. Lancaster County -- to knock down the referendum petition by the group Friends Against Counterproductive Taxation, called FACT.

FACT is composed of restaurateurs and bar owners who have opposed the drink tax since it was proposed together with a $2-a-day tax on car rentals to fund mass transit. It submitted 44,598 petition signatures to the county elections office last month in support of a ballot initiative to ask voters whether they want a reduction in the drink tax.

But Common Pleas Judge Christine Ward, who chaired yesterday's meeting of the elections board, which is required to certify that referendum questions are legal, proper and ready for the ballot, said the courts have long determined that citizen-driven referenda have no power to raise or lower the taxes of a municipal entity like a county government.

According to state and county statutes, "the taxing authority lies with [Allegheny] County Council," said Judge Ward.

What is more, she added, county statutes require that only binding referendum questions can be placed on that ballot. To that end, she ruled that County Council's referendum question -- "Shall the county enact an ordinance to increase real estate taxes in order to repeal the alcoholic drink tax?" -- which was devised to counter the FACT referendum, is not valid for the ballot.

"Both of these questions are advisory in nature and nonbinding. Referenda were meant to be binding, and not just a chance to get a feel of how the electorate feels," she said.

Judges Jill E. Rangos and Dwayne D. Woodruff agreed with the ruling, which now opens the referenda certification process to play itself out in a series of legal challenges that could start in Common Pleas Court and go all the way to the state Supreme Court.

"I think [the Board of Elections] made the right decision on one of the referendum questions," said county Solicitor Mike Wojcik, who issued a legal opinion last week that the proposed anti-drink tax referendum question would be illegal.

According to the county's administrative code, each side in the drink tax fight has seven days to appeal the ruling by the elections board.

Mark Wolosik, head of Allegheny County's elections division, said each side has until Oct. 21, two weeks before Election Day, to try to get its referendum question certified and ready for the Nov. 4 ballot.

FACT attorney Cris Hoel and members of the group yesterday said they plan on appealing.

"There is nothing that surprises me by this decision. We have said all along that we think this issue will go all the way to the Supreme Court," said Kevin Joyce, proprietor of The Carlton, Downtown, and a key member of FACT.

"You just have a sense that the deck has been stacked against us from the beginning," Mr. Joyce said. "Ultimately, we are confident that we will prevail and our question will be on the ballot in November."

But county Chief Executive Dan Onorato, who has long argued that the anti-drink tax referendum is illegal because it unbalances the county's budget, said he believes that even if this debate goes through the courts he will win in the end.

"State law is clear," he said. "You can't just have a referendum question that throws the county budget out of balance without proposing alternatives."

Mr. Onorato, who proposed the drink and car rental levies last year as a dedicated funding stream for the county's $30 million subsidy of the Port Authority, said he has not yet determined whether to appeal.

"County Council and I set the public policy of this county," Mr. Onorato said, adding he would be pleased if none of the questions made the ballot. "I will not sit back quietly and let people use the judicial system to set revenue policy for this county."