Posted 3:17 am Sunday, April 22, 2012
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WET/DRY ISSUE: Tyler, Community Weigh Possible Alcohol Vote Economic Impact
By JACQUE HILBURN-SIMMONS and ADAM RUSSELL
Staff Writers
Staff Writers
Tyler could enjoy an economic boost if voters agree to the legal sale of beer and wine, but there are no projections showing just how much.
Few Texas communities routinely track the revenue, and the most recent data highlighting the possibilities is several years old, the Tyler Courier-Times--Telegraph has found.
The "Buy Local First" special purpose political action committee wants voters in Tyler to have a say in whether they can purchase beer and wine for off-premise consumption, In 1976, the last time residents had a say on off-premises consumption, the proposal ended in defeat.
Committee spokesman Bob Westbrook predicted the economic boom could be tremendous, with dramatic increases in retails sales, ranging from $25,000 to $150,000 per week per establishment.
Westbrook said that although the measure is intended to legalize sales in grocery and convenience stories, it could prompt new beverage stores to open as well.
If he and others are right in their revenue predictions, could Tyler's next boom be found in booze?
MORE STUDY
Business activity associated with the Texas' alcoholic beverage industry equates to about $36.6 billion in total annual spending, with tax receipts totaling about $2 billion annually, according to a 2008 study by Waco-based Perryman Group.
Westbrook said he didn't have any hard data on hand to support his revenue predictions, but said the committee is poised to commission economist Ray Perryman to conduct a study to examine the possible financial benefits for Tyler.
"We are in the process of getting contracts executed now," Westbrook said. "It looks like it's going to happen mid-summer."
The committee decided to move forward and push for an election, based on results conducted from its survey of 600 residents, the majority of whom expressed a willingness to support a legalized sale initiative, Westbrook said.
Perryman, when contacted this week about what Tyler can expect if there is a successful alcohol initiative, was more general in his predictions, saying the latest data is more than three years old.
Since the study was conducted, Texas has grappled with budget deficits, a sluggish economy and lukewarm employment figures.
"Our research over the years shows that, generally speaking and from an economic perspective, increased beverage sales bring a positive net economic benefit to an economy," Perryman said by email.
However, the degree of impact differs by area and a variety of other factors, including generic demographics, trade areas, incomes, distribution and policies regarding the sale in surrounding areas, Perryman added.
2008 DATA
A closer look at Perryman's 2008 analysis indicates significant increase in retail sales when a community changes from dry to wet, records show.
The study measures the economic impact of alcoholic beverages and distilled spirits to representative communities and cites three examples:
• A community with 25,000 people could see a net impact of alcoholic beverages totaling about $19 million in annual spending in the local economy; $10.8 million in output and 185 jobs. Distilled spirits account for $5.8 million in annual spending, about $4.4 million in output and 55 jobs.
• An area with about 100,000 people, the impact of alcoholic beverage sales includes $90.1 million in annual spending, $50.8 million in output and 863 jobs. Distilled spirits account for $27.8 million in yearly spending, $15.5 million in output and 264 jobs.
• A city of 150,000 generates annual business activities of $134.1 million in spending, $79.7 million in output and 1,366 jobs. Distilled spirits account for $43.2 million in spending annually, $25.3 million in output and 440 jobs.
Perryman said the numbers are not designed to reflect the specific effects on any particular community and should not be interpreted in that manner.
"Thus, the impact can only be reliably measured through an analysis specifically tied to the local region," he said. "We may explore this issue prior to the election but have not done so at this time."
Perryman said retail activity numbers indicate Tyler is a "retail destination," with residents and visitors spending 25 percent above statewide average in retail activity, he said.
Tyler City Manager Mark McDaniel said an economic, retail and residential survey conducted as part of the Tyler 21 plan development indicates the city is a regional hub that swells to a daytime population of 270,000.
TYLER FIGURES
Tyler voters approved a measure in 2008 that eliminated the "Unicard," paving the way for beverages to be purchased legally in permitted locations by patrons ages 21 and up.
A historical view at sales tax revenue collected afterward dipped following the passage of the alcohol initiative, records show.
Records show Tyler received $21.4 million in sales tax revenue for fiscal year 2005-06; $23.1 million in 2006-07; $24.8 million in 2007-08; $23.4 in 2008-09; $21.6 in 2009-10; and $22.1 million in 2010-11.
The economic decline that started in late 2008 could play a role in the numbers, but officials said that would be difficult to confirm.
Sales tax revenue generated from alcohol sales doesn't go directly to the city from the retailer - it goes to the state first and then returned later to the city, officials said.
Alcohol is taxed at the sales rate of up to 8.25 percent. There's also an airline/passenger train beverage tax that charges 5 percent tax on drinks served in Texas airspace or borders, the Perryman study states.
Tyler officials said it would be difficult to track revenue from alcohol purchases if the initiative passes.
"The level of detail we get from the state doesn't tell us where it comes from," McDaniel said. "We'll be able to see how much we were paid, but it won't be attributed to beer and wine."
Officials said they are not predicting how the sales could affect the bottom line.
"We are not pre-planning for money at this point," McDaniel said. "We don't spend money we don't have ... we've always felt this was a community decision and not an initiative the city felt like it needed to initiate."
SIMILAR SIZE CITIES
The Tyler Courier-Times--Telegraph contacted eight cities -- Odessa, Richardson, Wichita Falls, Midland, Beaumont, Carrollton, Waco and McAllen -- with populations between 90,000 and 129,000 residents, to determine the sales tax revenue impact of alcohol.
Most did not maintain hard data regarding sales taxes collected from alcohol purchases, officials said.
Beaumont was the lone municipality to track total revenues received via alcohol. According to the city's accounting office more than $380,000 went into its coffers from total alcohol sales in 2011. The city brought in more than $102.6 million in total revenue for its general fund that year. Total sales tax contributed almost $33 million, or 32 percent. Alcohol sales generated a little more than 1 percent to the city's sales tax number and one-third of a percent to its total revenue stream.
Greg Sewell, city of Richardson spokesman, said that municipality doesn't track alcohol specific sales tax revenue.
"It's really just impossible to pull out the numbers for alcohol sales," he said, likening it to the scenario of someone who purchases a bag of popcorn and a beer.
"Either way, there's no distinction. We just get a check," he said. "What we get doesn't separate them. We don't have any hard, fast numbers on how it impacts our community."
Officials with the cities of Waco, Carrollton, McAllen, Odessa, Midland and Wichita Falls reported they don't keep track of the information, either.
Barry Levy, Wichita Falls spokesman, said voters there approved alcohol sales in the 1980s, but tracking the benefit has been elusive.
"We've been wet for quite some time," he said. "We do not track taxes generated by the sale of alcohol. It's not specific to what we do ... we gather the sales taxes and leave it at that."
