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Hear Brad Finkeldei, chair of the city's Special Alcohol Fund Advisory Board, discuss the mission of the board.
On many a Saturday about 2 a.m., it is not difficult to find a Lawrence police officer. Just look in one particular block of downtown.
"There are times when our entire midnight shift is literally all in a one-block area of downtown responding to incidents," Lawrence Police Chief Ron Olin recently told a meeting of bar owners and community members. "There are times during the school year when that happens on a weekly basis."
Unlike many other goods, alcohol in Kansas is taxed three different times before it reaches the consumer. Here's a look:¢ Gallonage tax: 18 cents per gallon for beer. This is paid when the distributor purchases the beer from the manufacturer. 100 percent of the tax goes to the state.¢ Enforcement tax: 8 percent. This is paid when the bar buys the beer from the distributor. 100 percent goes to the state.¢ Drink tax: 10 percent. This is paid by the consumer at the club. 70 percent goes to the city; 30 percent to the state.
How much does it cost?
Amount of tax paid on a $3 bottle of beer in Lawrence: 37 cents.To put it in perspective, alcohol is taxed at a rate that is 68 percent higher than other goods, such as a $3 purchase of Coca Cola which is taxed at 22 cents.
A few small doses of extra information$23.4 millionAmount of money spent on alcohol at Lawrence bars and restaurants in 2006.7.3 percentAmount of all Kansas bar and restaurant alcohol sales originating in Lawrence.3.2 percentPercent of Kansas' population located within the city of Lawrence.
Sometimes the one-block area is the 700 block of New Hampshire, home to Last Call. But not always. Sometimes it is other blocks. The only common element is that alcohol usually plays a major role in the problem.
But now, some bar owners are saying alcohol can play a major part in the solution, too. That's because alcohol does more than add a little life to the party. It adds a significant amount of tax dollars to City Hall coffers.
"We've sent in $24,000 in liquor tax money in the last three months, and we haven't had to call the police department at all in that time," said Nick Carroll, owner of Jackpot Saloon and Replay Lounge downtown. "But it is frustrating that we don't have more police officers for downtown."
A taxing thirst
Here's a number for you: $23.4 million. That's how much alcohol Lawrence residents and visitors bought at local bars and restaurants in 2006. That represents about 7 percent of all bar and restaurant alcohol sales in the state, despite Lawrence's population accounting for only about 3 percent of the state's total.
That much alcohol consumption causes challenges for law enforcement, city leaders say. But it also means a tax bonanza. That's because alcohol sales are taxed unlike any other product in the state.
On typical purchases - such as food, clothes and automobiles - a 7.3 percent sales tax is charged in Lawrence. Of that total, 2 percent stays in Douglas County - mainly the city - while the rest goes to the state. But on alcohol sales, a flat 10 percent tax is charged on all drinks bought at bars and restaurants. By state law, 7 percent goes directly to the city.
In 2006, that resulted in $1.63 million in tax revenue for the city. Several bar owners are saying a logical way for the city to spend more of that money is on police officers.
City commissioners say they are concerned about downtown nightlife safety, and are discussing new bar regulations that would make it easier for the city to revoke a problem establishment's license.
But bar owners have said that many of the problems the city is concerned about - everything from possession of firearms to disorderly conduct - are not primarily happening inside the bars but rather out on the sidewalks or adjacent city parking lots. That's where more police could help.
"Our police department is the best asset we have to use as a deterrent," said Rob Farha, owner of The Wheel.
Attempts to use more of the alcohol tax dollars to fund law enforcement has been met with resistance, though. Under state law, alcohol tax revenues that the city receives are to be divided equally among three separate parts of the city budget.
One part is the general fund. That's the portion of the budget that funds general operations, including the $14 million police department budget. So, theoretically, the city is using about $540,000 - one third of the city's 2006 alcohol tax collections - to fund the police department because that money was deposited into the general fund.
The other two-thirds go into a special alcohol tax fund and a special recreation fund. The special recreation fund is to fund park and recreation activities. The special alcohol fund, though, can be used to fund law enforcement activities, in addition to social service programs that work to treat or prevent alcohol or drug problems.
But for years, none of the special alcohol fund money has been used to fund law enforcement. City Manager David Corliss' office submitted a request to the advisory board that makes recommendations to the City Commission on how to spend the alcohol tax money. Corliss' office was seeking $224,000 to fund three police officer positions. Corliss' staff argued that the police officer positions could be used to help downtown safety.
The advisory board, though, recommended that none of the special alcohol money be used to fund police officer positions. Dave Kingsley, a member of the advisory board, said there were good reasons to not use the alcohol money to fund the police department.
"The way I look at it is if those bars downtown have major problems with crime, those bar owners should be held accountable for that," Kingsley said. "If they run their businesses in a way that causes problems, the city should deal with the bar owners, and the bar owners should be made to deal with the problems.
"The citizens of Lawrence shouldn't have to pay for those problems."
Brad Finkeldei, chairman of the advisory board, also said there was concern that funding the police officer positions would leave several other worthy organizations unfunded. The alcohol money traditionally has been used to fund community social service agencies.
Agencies that have traditionally received significant funding from the alcohol tax are Big Brothers Big Sisters; Boys & Girls Club of Lawrence; DCCCA; Headquarters Counseling Service; Van Go Mobile Arts; and Women's Transitional Care Services.
Finkeldei said the budgets of those organizations seem too tenuous, and granting the police department funding would have eaten up a little more than one-third of the available alcohol tax money that the board has to distribute.
Police Capt. Ed Brunt said typically the police department has 16 to 18 officers patrolling the entire city during the early morning weekend hours when bars are closing.
He said he would like to have 12 to 14 officers to devote just to the bar scene. Corliss also has said he recognized the need for more police, but his recommended 2008 budget doesn't include funding for any additional officers.
Tight financial times make it difficult to find the needed money, Corliss said. He estimates each new police officer position costs about $60,000 once salary, vehicle and equipment costs are factored into the budget. He has said adding additional police officers would be his top priority for the 2008 budget, if more financial resources were available.
"But there's a limit to how much you can increase people's property taxes," Corliss said.