A closed liquor store sits empty on Texas Highway 31 near the Gregg County and Smith County line. Many alcohol stores outside of the Smith County borders have gone out of business since many Smith County communities now allow beer and wine sales. (photo by Sarah A. Miller/Tyler Morning Telegraph)

1. Influence of churches, once dominant in southern U.S., now waning

When Tyler voters went to the polls in November 2012 to decide on retail beer and wine sales, they bucked a tradition dating to 1940, the last time alcohol was sold in retail stores in the city.

And they did so in a big way — beer and wine sales passed two-to-one, with 66.5 percent voting for sales, and 33.5 percent voting against.

A few months later, beer coolers and wine aisles started appearing in local grocery stores, supercenters and convenience stores. Sales tax revenues started shooting up, and arrests for driving while intoxicated started to decline.

More than two years later, the numbers said beer and wine sales have been a big economic boon to Tyler.

“What the numbers tell us is that a lot of Tyler money was going to support the outlying areas, as people drove out of the county to get beer and wine,” said former Mayor Barbara Bass, who was in office when the referendum passed. “Now all that tax money can be used here, for the services our community needs.”

Ms. Bass didn’t take a formal position on the issue when it was before voters.

“That wasn’t our place,” she said of the Tyler City Council. “That was a decision that had to be left up to the voters. But I think the margins of the vote show Tyler was ready for it. The voters spoke.”

She’s said she doesn’t feel the 2012 vote was a moral issue for most voters.

“That election wasn’t about people’s choices,” she said. “People were getting their beer and wine regardless of whether it was available inside Tyler or not.”

In other words, it was about where they would spend their money, not how.

Indeed, the “for” campaign was built around that assumption. It was called “Buy Local First.”

There were strong economic arguments for approval. Economist Ray Perryman conducted an economic impact study, and reported that beer and wine sales could generate more than $100 million in new business activity, more than 1,600 jobs and almost $5 million in local tax revenue.

Those expectations have been exceeded, according to city officials.

 

TAX REVENUES

There are some caveats Tyler Chief Financial Officer Keidric Trimble makes clear before he talks about numbers. Estimates of sales tax revenues from beer and wine are just that — estimates. Few retailers sell beer and wine under a separate tax permit, he said, and at the time alcohol sales started, the city was in the early stages of an economic recovery.

“It’s such a big economy and there are a lot of pieces, so it’s hard to tell how much of the increase in sales tax is related to beer and wine,” Trimble said. “But beer and wine has had an impact.”

The city estimates that sales tax revenues increased by $35,000 to $40,000 a month. That’s up to $440,000 a year,

“I think a lot of people were surprised to see that,” former Mayor Bass said. “They were amazed at how much Tyler money was being spent outside of Tyler. But that additional revenue has allowed us to implement a lot of plans we developed during the economic downturn, plans that we had to put off.”

But it’s not just about tax revenues.

 

ECONOMIC IMPACT

Two of the big contributors to the “Buy Local First” campaign in 2012 were the Brookshire’s company and Wal-Mart. Brookshire’s gave $150,000 to the campaign, while Wal-Mart gave $120,000, a total of $270,000.

Contacted recently, Brookshire’s said beer and wine sales have had a significant effect on the profitability of its stores.

“We have seen a positive, financial impact to our Tyler-area and Smith County stores as a direct result of the local option election which took place in December 2012,” Jason Cooper, director of compliance and government relations for Brookshire Grocery Co. said in a statement. “The addition of beer and wine has not only resulted in store sales increases, but also brought increases to other areas of the store because of the added shopping convenience to our customers.”

Tom Mullins, executive director of the Tyler Area Economic Development Council, said the effect on the area’s economy has been dramatic, and it goes far beyond the sales tax numbers.

Take The Villages at Cumberland Park, he said. Without beer and wine sales, World Market would never have come to Tyler, he noted. And without World Market as an anchor, it’s unlikely The Villages at Cumberland Park would have been developed.

“I think it’s fair to say that,” he said. “And it’s not only World Market, but there are Wal-Marts coming in. Wal-Mart helped finance that election, with the clear intention that if it passed, they would be putting in stores.”

For years, Mullins added, Costco looked at putting a store in Tyler, but balked at the lack of beer and wine sales.

“Costco is the largest retailer of beer and wine in the U.S. They certainly wouldn’t want to go into a market that didn’t allow it,” he said.

When marketing Tyler to businesses and entrepreneurs, Mullins said, the fact it was “dry” was often a hurdle.

“The election made it easier for us to market Tyler as a place to attract young professionals,” he said. “They didn’t understand the concept of a ‘dry’ county, not being able to buy beer and wine. It was frustrating.”

It was even an issue in attracting conventions and conferences. Because of the way city ordinances were written, convention organizers had to get special permits just to have a hospitality room, Mullins said.

“That was always just an additional hassle,” he said.

Of course, all that good economic news came at a cost — to outlying areas that no longer have those Tyler buyers.

“There were always going to be winners and losers in this kind of thing,” Mullins said. “But the pros outweighs the cons. This is good for business, it’s good for consumer choice, and it’s more sales taxes for our community.”

 

LESS CRIME

Opponents of local beer and wine sales argued that alcohol-related crime could increase, due to the easy availability of beer and wine.

But Tyler Police Chief Gary Swindle said the opposite has happened.

“It has, in fact, decreased crime,” he said. “People don’t have to drive as far to get their alcohol – they’re not running out to the county line in a hurry. So the roads are safer from intoxicated drivers.”

The numbers demonstrate this. DWI numbers have been steadily reducing since 2009, when 584 arrests were made. In 2010, the Tyler Police Department recorded 443 arrests for DWI. That dropped to 412 in 2011, and to 369 in 2012. The rate was already declining, for a variety of reasons, including stiffer penalties, but the drop in 2013 was even more dramatic — just 247 arrests for DWI. In 2014, the number was down to 197. So that’s a drop of 46 percent in the two years since beer and wine became available in town.

“That’s what we suspected would happen, but we didn’t take a position on the election,” Swindle said. “We weren’t surprised.”

Arrests for other alcohol-related crimes also are down. Liquor violations (that mostly refers to bootleggers selling alcohol illegally) are down, as are arrests for public intoxication.

“There’s an increase in sales tax revenue coming into the community, and that’s very positive,” Swindle said. “And we just haven’t seen any negative effect, related to crime.”

But there has been a down side. Just ask Winona.

 

BOOM TO BUST

Newly elected Winona Mayor Lisa LaFrance is seeing the other side of the boom. Four years before Tyler went “wet,” Winona became the first Smith County municipality to allow beer, wine and liquor sales. Its reasoning was simple; lots of Tyler cars passed through Winona on the way to Big Sandy, the Upshur County town with the closest beer, wine and liquor stores.

Winona went “wet” in 2009, after a bitterly contested couple of elections that involved a tied vote in May, lawsuits, and allegations of voter fraud, and a successful vote in November. Beer, wine and liquor sales started in January 2010.

“It was a good boom while it lasted,” said Mayor LaFrance. “It helped us finance the police department, we built some roads and fixed some others, and got some curbs. We thought it would go on longer. But the boom is gone.”

The city of Winona saw a drop in sales tax revenues of 42 percent in the first year. Ms. LaFrance said it hasn’t gotten better. The city recently abolished its police department, largely because of lack of revenues. It now relies on the Smith County Constable Precinct 4 office to handle emergency calls.

“We still have some wholesalers (who sell to Tyler stores and restaurants), but it’s nothing like it was,” Ms. LaFrance said.

 

WHAT’S NEXT

Winona, Big Sandy, Kilgore and other outlying areas still have something Tyler residents can’t get in town — liquor. That could change; Brookshire’s and Wal-Mart are two big plaintiffs in a lawsuit that could end with those stores being allowed to sell rum, whiskey, vodka and other spirits.

Texas law says only private companies can sell spirits; publicly traded companies are prohibited. Hotels are exceptions.

“One class of retailers — public corporations — (is) denied an opportunity to compete in the distilled spirits market, while another class of retailers — private corporations and publicly traded hotel corporations — are allowed to compete without similar restriction,” the lawsuit contends.

Brookshire’s agrees.

“Brookshire Grocery Company has operated in the state since 1928, yet we are prohibited from competing in the retail sale of spirits,” said the firm in a statement. “BGC is committed to providing our customers with the products and services they expect, and it is on their behalf that we support efforts to eliminate this anti-competitive law.”

Of course, once that law is changed — if that happens — Tyler voters would still have to approve the sale of hard liquor. The 2012 vote only allowed beer and wine sales.

That could bring the issue back to the public’s attention. For now, at least, few seem to be questioning the economic benefits the retail sale of beer and wine has brought.

“I think voters spoke very decisively,” Ms. Bass said. “They made their choice. Now we’re spending that money here, not elsewhere.”

 

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