DISCUS

Governments dip deeper into alcohol tax well

September 27, 2009 08:00 PM

Dry areas going wet, others liberalizing laws to generate extra revenue

Last week, residents across Lubbock County, Texas, began picking up six-packs of Lone Star on their way home. Legally.
For years, sales of packaged alcohol have been strictly regulated, limited mainly to private clubs, to some restaurants in the city of Lubbock and to a small part of the county known as the Strip. But after four months of planning, protests and appeals since voters overwhelmingly approved sales countywide, the Texas Alcoholic Beverage Commission last week issued 86 permits for packaged retail alcohol sales.
That terminated Lubbock’s claim to being, with those few exceptions, the biggest dry county in America — a distinction the county of 264,000 was willing to cede in exchange for a tax windfall during the worst economy in decades.
“For us, it’s from an economics standpoint,” said Matthew Kendrick, marketing director for a chain of convenience stores in the Lubbock region and a member of the political action committee that pushed the May 9 initiative. “It’s been legal in (much of) Texas for a long time now, and we’d like to reap some of the benefits.”
Those benefits can be substantial. M. Ray Perryman, author of the closely watched Perryman Economic Forecast, which tracks the Texas economy, estimated that sales taxes on beer, wine and spirits could generate $5 million a year in new revenue for Lubbock County, which had to draw $3.5 million from its reserve to balance its 2009 budget.
The transformation of Lubbock from dry to wet is merely one example of a national trend toward looser restrictions on spirits, as local governments take a hard look at whether the social policy challenges of increased alcohol availability are outweighed by new tax revenue.  Dry areas are going wet, and others are liberalizing their laws by approving Sunday sales or sales in grocery and convenience stores.

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CONTACT: Telephone: SCROLLER Publication Name: MSNBC Publication Author: Alex Johnson
 

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