Just a couple of points why HB 1232 should come off of the table

Posted by PP at the SDWC

February 18, 2007

I have to shake my head at some of my friends in the legislature when I see votes such as this one taking place as related by Bill Harlan in the Rapid City Journal:

Bar owners beat developers Thursday in a fight in the state Capitol over
whether to let South Dakota towns create districts with unlimited restaurant
liquor licenses.

Rapid City Mayor Jim Shaw had testified at an earlier hearing that the
special liquor-license districts would have helped spur development in four
large projects in the city costing almost $500 million.

But last week the full Senate rejected one version of the bill
18-15.Thursday morning another version of the bill was killed by an 8-5 vote in
the House Local Government Committee, despite a last-minute effort to find a
compromise.

Holders of current liquor licenses say the new districts would have driven
down the value of current licenses, which can be worth hundreds of thousands of
dollars because the state limits the number of licenses a city can have.

The compromise would have used money collected for the new licenses to
compensate current license holders for lost value.

Rep. Joel Dykstra, R-Canton, said the state’s 60-year-old liquor-license
limits were “a real development constrictor,” and he said the compromise bill
was a fair way to end an out-dated system.

Read it all here, And you can go see how the vote played out here. Why do I shake my head and think this vote is just plain wrong thinking when it comes to what’s best for South Dakota?

#1 - Given our relatively small population, and otherwise aggressive pursuit of economic development opportunities, how in the heck can we look at ourselves in the mirror and say no? Opening it up would mean new businesses, new construction, and new dollars invested into the economy. And there’s a big chunk of it which would flow in from outside of South Dakota.

So what if it’s for chain hotels and restaraunts? Guess what - when some people look at areas to do business in, they look for the types of amenities that they have where they’re from. And now we’re voting to try to shut that out because of ancient liquor control laws that date from the days of “blue law legislation?”

My gosh. If we’re going to maintain that type of backwards mentality, why don’t we ban all alcohol sales on Sundays statewide, and mandate Church attendance? You’d think the WCTU was in charge and it was the 1930’s.

#2 - Since when is it government’s responsibility to guarantee the value of a license that people have decided to trade among themselves?

This is the part I have a little more sympathy on. But it doesn’t go very far. Yes, some people have paid hundreds of thousands of dollars for liquor licenses. And I can see their point where they don’t think it’s fair that someone might be able to come in and buy a liquor license for a few thousand, when theirs might have cost them $100,000.

Now we’re supposed to think that two wrongs make a right?

Over the years, we stupidly allowed government permits to be bartered like an old car. I mean, we don’t allow fishing or hunting licenses to be sold for profit. We don’t allow dog licenses to be traded for profit. But liquor licenses? Go right ahead.

We allow them to be bought, sold, traded, speculated on and held until their value might be higher as if they were grain sitting in a bin. But they’re not a real commodity. They’re a government license, that stands as a perfect example of what happens when government gets involved in market decisions.

(As an aside, do you think anyone is collecting sales tax when a license is sold by one person to another? Although, I think there would be normal B to B exemptions that would apply.)

Legislators, it’s time to fix this mess and show some statesmanship for South Dakota. Ensure our future economic development and take positive steps to end trading in government licenses.

Pass the bill allowing special districts as a baby step towards fixing the mess started so long ago.

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