Bloomington Stands Firm on Smoking Ban [08/17-1]

Excerpts from: Bloomington stands firm on smoking ban

By Anthony Lonetree  Star Tribune [08/16/05]

A first glimpse at the economic impact of Bloomington's smoking ban reveals no significant hit to food and lodging receipts, but pockets of hurt on the liquor front.

To what extent the ban is to blame, however, was unclear, according to a city staff report released Monday. Liquor-tax revenues for the first six months of the year have been in decline since 2002, the report stated, and that trend has continued in 2005.

"There is no conclusive evidence at this time that this decrease in revenue for 2005 can be solely attributed to the smoking ban," the report said. The 31-page document, outlined for the City Council on Monday night, represents the first attempt to gauge the fiscal effect of smoking bans imposed March 31 in Hennepin and Ramsey counties.

The potential impact to Bloomington, home of the Mall of America, was significant because hospitality is its main industry -- and because the City Council was the first metro government body to approve a smoking ban.

After an hour's testimony, it stood firm behind the city's ordinance, voting 6 to 1 to urge that a ban be enacted statewide and that the Hennepin County Board drop any notion of rolling back its smoking ban.

Council Member Steve Elkins said that it would appear that only "liquor, smoking and gambling" were on the decline in Bloomington, and that he had trouble seeing how seeking to rescue them "is a public policy problem."

Jim Algeo, who has been active in several charitable groups, said that a state charitable gambling report noted sharp declines in gross receipts for organizations in both Hennepin County and Bloomington during April and May. The June and July revenues were down, as well, he added, "and we don't think it's [just] a dip."

Studies elsewhere

Bloomington is not alone in seeking to assess a ban's impact. Later this month, Hennepin County officials are expected to receive data comparing sales tax figures in Hennepin, Ramsey and Anoka counties for April through June in 2004 and in 2005.

The state's most populous county has been lobbied heavily in the past month by bar owners, who have complained that its ban has severely affected them economically.

Adjoining Anoka County does not have a ban, and while Ramsey County does, its ordinance allows traditional bars to be exempted.

But even if Hennepin County were to scale back its ban to mirror Ramsey County's, Bloomington Mayor Gene Winstead said that it was clear in council discussions Monday night that his city would not follow suit.

The big question entering Monday's meeting was whether the city's ban put its businesses at a severe disadvantage. According to the staff report:

• Total lodging sales actually rose slightly, to a total of about $40 million, during April, May and June, compared with the same period a year ago.

• The 33 businesses that responded to a city request for food sales information reported that the first six months of 2005 compared favorably to 2004.

The exception, however, was private clubs, "which had a dip in April 2005 food sales but were back to 2004 levels by June."

• Total liquor sales for the first six months of the year continued to decline -- from a high of about $18 million in the first six months of 2002 to about $16.4 million this year.

Sports bars were the hardest hit -- seeing a 24 percent reduction in liquor sales in the three months after the city's ban took effect. But the analysis also revealed that the same establishments saw a 19 percent decline between 2003 and 2004, as well.

Declines were seen in other areas: Chain establishments were down 6.6 percent this year, after being up 14 percent in 2004, and private clubs saw liquor revenues drop 9 percent, after a 4 percent rise during April, May and June last year.

The report also notes that while some types of establishments might show overall declines in liquor sales, some individual establishments were showing increases.

The report declined to name specific businesses because, it said, their liquor-sales tax information is confidential.

Donations dip?

Although Hennepin County's three-month study has yet to be completed, the Minnesota Gambling Control Board provided a look last week at what occurred regionally in the charitable gambling area in April and May.

Tom Barrett, the board's executive director, said that Hennepin County's gross receipts from lawful gambling dropped by $6.8 million, or more than 20 percent, compared with the same two months in 2004.

In Bloomington, he said, gross receipts fell by nearly $1 million. In Hennepin County, 27 of 33 cities reported declines in sales. Wright, Anoka and Dakota counties showed slight increases, Barrett reported.

Algeo said that organizations typically contribute about 5 percent of gross receipts. For April and May, he said, that would mean about a $50,000 reduction in funds that could have gone to community uses.

The Bloomington staff report makes no reference to the $1 million decline in gross receipts locally in April and May, but notes that the statewide trend since 2001 has been one of declining gross receipts.

Council Member Steve Peterson said he is concerned about a drop in donations to youth groups and crime prevention efforts, and that he would like the city to consider ways to help those organizations in their fundraising efforts.

The council also asked that it be provided another economic analysis, perhaps three months from now, but at the same time it made clear that the review would not be for the purpose of potentially easing back on smoking restrictions.

Council Member Vern Wilcox, who opposed the city's ban, said that there was one good thing to say about the firmness of his colleagues' position. Now, he said, businesses know there's no reprieve, and are free to decide whether to close and leave town.

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