2008. An Orange Bowl victory. A national championship. A year to remember.
Actually, parts of it may be a bit hazy.
New liquor tax numbers from the city show that we started toasting with the Orange Bowl in January, partied like there was no tomorrow with the national championship in April, and then decided for good measure to kick it into overdrive to end the year.
According to tax figures, Lawrence bars and restaurants sold an additional $3.2 million worth of liquor in 2008 compared with 2007. Overall, bars and restaurants sold $24.9 million worth of booze in 2008. Those numbers don’t include liquor store sales.
“I think it is safe to say that the kids all had a damn good time when we won the national championship,” said Rick Younger, owner of Rick’s Place, 846 Ill.
Excise tax boost
The city’s coffers also received a boost. The state charges a 10 percent excise tax on liquor sales at bars and restaurants. Traditionally, cities have received 70 percent of that tax — although Gov. Kathleen Sebelius’ proposed budget calls for the state to begin keeping all the drink tax revenue in fiscal year 2010.
For 2008, the Lawrence liquor tax collections increased by 16 percent, the largest yearly jump since at least 2000. The city received $1.91 million in 2008, up from $1.64 million in 2007. Statewide, liquor tax collections increased by 6 percent.
Bar owners weren’t over-thinking the reasons behind the large Lawrence increase.
“Last March and April were pretty exciting,” said Rob Farha, owner of The Wheel, 507 W. 14th St.
But an analysis of the numbers show there might be an even larger reason for the increase: KU football. The fourth quarter of the year — the heart of KU’s football season — posted an even larger increase than the time period surrounding KU’s national championship in basketball.
Fourth-quarter liquor tax collections were up 27.7 percent compared with 2007. Second-quarter collections — which included the Final Four, the national championship game and the postgame celebrations — were up by 22.9 percent.
Farha said the resurgence of KU football has provided a boost to the local bar and restaurant business.
“This year it helped that we had a lot of 11 o’clock games,” Farha said. “This place doesn’t do that well with the six o’clock games. Everybody goes tailgating before, and not as many people come out to the bars.”
Also adding to the boost was — unlike some other seasons — all of KU’s away games and most of its home games were on television, which allowed local sports bars to attract crowds during the games.
But there are signs that the party may be coming to an end. Bar owners this week weren’t overly upbeat. At Rick’s Place, Younger said that December had been one of his worst months on record. And Farha estimated that on non-game days his bar’s business was off by about 20 percent.
“People are just broke,” Younger said.
And, believe it or not, the bar business has been feeling that. Since 2004, growth in drink tax numbers have been relatively flat. From 2004 to 2005 — the first year after the city’s smoking ban went into effect — drink tax revenues declined by about 1 percent. From 2005 to 2006, drink tax numbers increased by 2.3 percent. From 2006 to 2007, drink tax numbers were up by 0.9 percent.
Bar owners have argued the numbers are even worse because drink prices have increased during those time periods, which would cause the amount of tax charged on each drink to increase since the tax is based on a percentage of the price.
But perhaps 2009 will produce better days for bars, even if it doesn’t produce better days for anybody else. The adage is people toast their successes and drown their sorrows. Bar owners said there likely will be some of the latter going on in 2009.
“I think our business will go down, but probably not as drastically as some other types of businesses,” Farha said.
“Think of shoe stores,” Younger said. “First of all how many shoes do you need, and then when times are tough, you’ll probably just get by with what you have. But you can always use a mouthful of beer or a swig of whiskey.”