Proponents of changing Kansas liquor laws to allow liquor sales in Kansas grocery and convenience stores are presenting some figures that are pretty attractive to a state in need of jobs and tax revenue.
A coalition of retailers, including the Walmart, Hy-Vee and QuikTrip chains, is making its case for such a change by contending that it would generate more than 12,000 new jobs in Kansas while adding $216 million in wages and $72 million in new tax revenue for the state.
Opponents of the bill say those numbers are exaggerated, but the proponents, known as the Coalition for Jobs and Consumer Choice, didn’t just pull their figures out of the air. They came from a study conducted for the group by Kansas University’s Center for Applied Economics.
The 16-page report carefully supports its claims with a variety of data that leave some room for questions.
Although the report concedes that the change would eliminate about 341 liquor stores and 1,154 jobs in Kansas, that number would be offset by an increase of 116 grocery stores with 3,987 jobs and 449 convenience stores with 9,349 jobs. And the new jobs would pay better and contribute more to the state economy.
The report arrives at these figures by comparing the per-capita number of liquor, grocery and convenience stores in five states like Kansas with “restricted” liquor sales to the number of stores in five “unrestricted” states like Missouri and Nebraska. The report found there are more grocery and convenience stores per capita in the unrestricted states and, therefore, concluded that its sample “provides clear evidence that the market supports more grocery stores and convenience stores than specialized liquor stores when the market is deregulated.” The statistics may support that claim, but it’s a pretty shaky basis on which to promise that changing state liquor laws will bring 116 new grocery stores and 449 new convenience stores to the state.
The report also addresses how changing the liquor laws could produce more alcohol-related taxes without raising alcohol consumption in the state. This contention rests heavily on shifting more alcohol sales back to Kansas from border states, such as Missouri. The report looks specifically at the Kansas City metropolitan area, which has 48 grocery, convenience or liquor stores on the Missouri side within a quarter mile of the Kansas border.
Granted, allowing liquor to be sold in grocery and convenience stores on the Kansas side might be a convenience for some, but it won’t address the tax issue that will keep many of those sales in Missouri. Missouri charges an excise tax of $2 per gallon on liquor, while Kansas charges an excise tax of $2.50 plus an enforcement tax of 8 percent on packaged liquor.
While the statistics in the KU report aren’t wrong, they may not tell the whole story. The companies that commissioned the report have an obvious financial interest in a legal change that would allow their stores to sell wine and liquor. The losers in this equation would mostly be small independently owned liquor stores across the state.
Maybe the change would be a good financial deal for the state, but it’s probably not quite as good a deal as the coalition and its report contend. Kansas legislators need to look beyond the rosy predictions.