States look to alcohol sales, taxes for economic help

SALT LAKE CITY -- Utah is the only state that requires people to fill out an application and pay a fee before entering a bar.

But the shelf life of this law -- enacted 40 years ago in a state where nearly two out of three residents are members of a religion that shuns drinking -- appears to be dwindling.

In Utah, and across the country, governors and lawmakers faced with budget deficits are advocating loosening laws that restrict alcohol consumption in the hopes of increasing tax revenue.

• In Georgia, Connecticut, Indiana, Texas, Alabama and Minnesota, lawmakers are considering legislation this year that would end the ban on Sunday liquor sales. All but 15 states sell booze on Sundays.
• In Nebraska, a state lawmaker has proposed allowing beer to be consumed in state parks as a way to boost tourism.
• Other states, including Utah, are considering allowing the sale of liquor on Election Day.

Drinkers shouldn't break out the bubbly just yet: Two dozen states, including California, Massachusetts, Oklahoma and Virginia, are looking to help their budgets by raising alcohol taxes.

Alcohol taxes are a popular budgetary crutch for lawmakers because liquor sales tend to hold up relatively well, compared with other revenue streams, during hard times, said Steve Schmidt, vice president of the Alexandria, Va. based National Alcohol Beverage Control Association.

In 2008, revenue reported by liquor suppliers rose 2.8 percent from the previous year to $18.7 billion, according to the Distilled Spirits Council of the United States. That's slower than the 6 percent average annual growth rate since 2000.

The council's president, Peter Cressy, calls liquor "recession resilient" -- not recession proof -- a point that industry officials make when cautioning lawmakers about raising taxes.

Earlier this month, distillers in Kentucky poured bottles of bourbon on the statehouse steps there to protest a proposed tax increase.

In Pittsburgh, a 10 percent tax placed on alcohol last year inspired an animated satire, resulted in some bars printing signs saying the tax's architect was not welcome and one restaurateur challenging Allegheny County Executive Dan Onorato to a charity boxing match.

Ben Jenkins, a spokesman for the Distilled Spirits Council, said states would be better off if they simply made alcohol more accessible to meet consumer demand. States that lift the ban on Sunday sales see a 5 percent to 8 percent annual sales increase, he said.

"Dozens of states consider alcohol taxes and every year most of them fail because the legislators become educated as to the effects a tax increase on alcohol would have on the hospitality industry," he said. "Since 2001, we've seen 245 major tax proposals and 227 of them have failed."

Those opposed to reforming Utah's liquor laws cite concerns about overconsumption and drunken driving. But religion also plays a key role.

About 60 percent of the state's residents are members of The Church of Jesus Christ of Latter-day Saints, which tells its members not to drink alcohol. An even greater percentage of lawmakers -- 80 percent to 90 percent -- are Mormon, though some of them are open to changing the law for the sake of the state's economy.

The state's private club system as it's currently known, was created in 1969 after voters -- encouraged by the church -- killed a proposal to allow the sale of liquor by the drink in restaurants.

But for Utah's $6 billion-a-year tourism industry, liquor laws are a major issue, too. They say it hurts their efforts to compete with neighboring states like Colorado for the lucrative convention and ski market.

If there was ever a question if Utah has an image problem because of its quirky liquor laws, business travelers like Marty Cano can answer it.

"Originally, I thought alcohol was illegal here," the Austin, Texas IT consultant said one recent night after downing a few pints of beer at the Poplar Street Pub, a few blocks away from the downtown Mormon temple.

Utah's bar industry has come up with a compromise to the hassle of making patrons fill out forms. Its leaders have proposed scanning driver's licenses before customers enter a club to verify nobody under 21 enters. Some lawmakers would like information about who goes into a bar stored on the scanners so police could use it.

There are other ways in which Utah's liquor laws are getting stronger. Last year, it became the only state to ban the sale of flavored malt beverages from grocery and convenience stores.

Other states, meanwhile, are trying to eliminate much less onerous hassles associated with buying alcohol.

In Colorado and Kansas, grocery stores are fighting for the right to sell full-strength beer. Most of the opposition in those states isn't coming from morality groups, but instead from liquor stores who like having a corner on the market.

A similar effort is occurring in Tennessee, where lawmakers are considering allowing the sale of wine in supermarkets.

In Alabama, a proposal to raise the amount of alcohol allowed in beer from 6 percent alcohol by volume to 13.9 percent is being considered, although some church groups fear it would result in people getting drunker quicker.

Dave Morris, owner of Salt Lake City's Piper Down, an Irish-themed pub, said keeping a database of who enters a bar would be "a public relations nightmare" but he says he's willing to accept scanning IDs if it helps tourism officials lure more visitors to the state, and put more money into the pockets of his customers.

"If they have more money, they can come out more often," he said. "It will all trickle down."

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