A recent legislative audit made several strong recommendations for reforming Utah’s liquor laws, in particular the quota system for granting alcohol permits. The audit echoes reports that the current shortage of alcohol permits is stifling economic development and does not reflect the state’s changing population.
Utah is in the small minority of control states that grant liquor permits based on population. Of the states polled, the audit commission found that only two other states, Pennsylvania and Idaho, use a state-wide quota for liquor permits. Idaho allows one permit per 1,500 people for clubs and restaurants and has no quota for beer and wine. Pennsylvania allows one permit per 3,000 people regardless of permit type. In contrast, Utah allows one permit per 7,850 people for clubs and one permit per 5,200 for restaurants.
According to the audit, quota numbers have not changed since 1990. In the meantime, the state’s population has increased by 22 percent with significant demographic changes. For instance, the percentage of the state’s population that were reported to be members of the Church of Jesus Christ of Latter Day Saints, whose observant members do not consume alcohol, has shrunk from 70% in 1989 to 58% in 2009. Further, alcohol consumption rose 54% from 2001 to 2009. The audit also reports an increase in the number of people who are eating out. These changes make the state appealing to restaurant and bar development. Many restaurateurs, including large chains, have, however, expressed reluctance to develop businesses in Utah given the uncertainty over obtaining a liquor permit.
The audit recommends increasing the number of overall liquor permits, and in particular restaurant permits. As previously reported, a bill to allow current permit holders to sell their alcohol permits is being considered for the next legislative session, which begins in January. Another proposal would allow resorts to obtain one license to cover the range of alcohol services provided rather than the current system that requires a separate permit for each service. This could free up numerous additional permits; one resort alone reportedly holds 17 permits to cover its restaurants, bars and other services.
In response, the Executive Director of the Utah Department of Alcoholic Beverage Control suporrted the audit’s recommendations. The Utah Restaurant Association and Utah Hospitality Association also embrace such reforms. It is still unclear, however, whether the state legislature will support any of the recommended reforms. Stay tuned for updates.
Taxes and One-Stop-Shopping
As we all know, Washington is not the only state that controls the sale and distribution of alcohol. Each of the 19 (1) “control states” have different practices that distinguish them. Here, and in future posts under “States that Regulate . . . and Control” we will provide bits of information on the control states and how they operate.
- IDAHO – What is distinguishing Idaho from other control states right now? TAXES. There has reportedly been an influx of Washington customers who are traveling to Idaho to avoid paying the higher liquor taxes in Washington. This has long been a customary practice in the Northeast, where a shorter commute can make a trip across state lines worth the few dollars of savings. Here in Washington, however, only the eastern-most residents benefit.
- PENNSYLVANIA – With the current drive to privatize in Washington, it is interesting to remember that the state could always impose more control: the Pennsylvania Liquor Control Board recently rolled out its new wine kiosks, where one must scan an ID, pose for the video camera, and take a breathalyzer before purchasing wine from an automated machine. In Pennsylvania, wine and liquor are sold from state stores, so this provides consumers the “opportunity” to buy wine in a grocery store – one stop shopping at its best?
(1) Alcohol is regulated at the county level in Maryland; Worcester and Montgomery counties both control alcohol sales.