Is it an issue of fairness?

I see the Argus is reporting that the special district liquor license bill passed out of committee 6-2.
The Senate State Affairs Committee 6-2 for the bill. Republican Sen. Mac McCracken of Rapid City is prime sponsor. When he explained the bill to the panel on Friday, he said it would let cities attract new developments “that will not come to a municipality without the ability to acquire an on-sale (liquor) license.’’

He also said it would promote development “of areas on the edge of municipalities where growth is most likely to occur.’’
Read that here.

I spoke with a local businessman (and holder of a liquor license) in Pierre the other day, and he gave me his perspective on the expanded offerings. He considered it an issue of fairness.

His license cost him over $100,000, marking a significant investment and expense for his
business. With expanded licenses, a person could come in with literally a minimal investment or commitment, and set up shop in competition where he'd automatically be at a disadvantage. His suggestion would be to have the city open licenses up for an auction like bid or at least somehow sell them at the prevailing rate.

I'm kind of divided on this. In South Dakota, our antiquated laws on the sale of liquor have created this system where the licenses are a tightly held commodity where in many cases people will buy them just to speculate, whether the licenses are active or not. It's a perfect example of what happens when Government starts mucking around in the free enterprise system. They've created something that not everyone can have, so someone is going to try to make money off of it.

No one is saying that we want liquor stores in every neighborhood. But somewhere in that spectrum, there has to be a happy compromise. If I want to open a restaurant, and I'm not of ill repute, and I buy the insurance, why shouldn't I be able to get a license to serve liquor?

The bottom line in all of this: Why should Government be an obstacle to free enterprise, as opposed to encouraging it?

Comments

Anonymous said…
PP, your thoughts on free enterprise are right on the money. The main issue being avoided, once again, by the Legislature is that of local control. If a city council opts to issue new licenses, those members will be the ones facing constituents the very next day. Besides, there is nothing that prohibits a local government from placing their own cap on the number of licenses so the decision remains up to those people who know their community best.
Bob Newland said…
"If I want to open a restaurant, and I'm not of ill repute, and I buy the insurance, why shouldn't I be able to get a license to serve liquor?"--PP

Typical hypocrisy from Powers.

If I want to open a restaurant, and I'm not of ill repute, and I buy the insurance, why shouldn't I be able to get a license to serve cannabis?
Anonymous said…
My feeling is this: A license is not a property right. A license is permission to conduct a certain type of business. I don't feel a bit sorry for those that paid one penny over the annual rate that the city charges. Maybe what the state could do is this...prohibit "aftermarket" sales of licenses, and prohibit "sitting" on licenses for speculative purposes. No one should be able to profit by "trading" in licenses. If you have a license you have to use it. If you don't use it, you turn it back in so the next person on the list can use it
Anonymous said…
Fairness? Free enterprise doesnt deal on fairness!
Do we feel sorry for ranchers who spend 130K on feeder cattle, only to have the market drop 30% and now their investment is a losing battle??

Pat is right in that it is the govt involvement in the first place that caused this mess. I am from Pierre, and although I feel bad for the few who have recently bought licenses (I frequent their places and enjoy their offerings), I feel little or no shame for changing the laws, when I know there are a few licenses being "sat on" in our town. Those sitting on the licenses are standing in the way of development.

Although a sound insecure investment, that is all it is...an insecure investment. Lawmakers-do not vote by sympathy and what is fair. Vote for what is right for our state. What is right for our state involves free enterprise, and economic development. Bankers who financed a license on retail value of the license took a risk. Those who purchased a license took a risk.
Anonymous said…
9:55 is right on.
Prohibit the sale of licences etc...
Men-- being who they are--- do not do well on the free interprise system when it comes to activities that are not good for civilized society. They tend to overdo those pleasurable activities that destroy children, families, and communities...esp. the addictive ones.

We should be able to look around us and see video lottery and quick loan places on every corner and KNOW that we don't want more liquor licenses! or POT licenses! or legal prostitution! or nude and sex bars!

Make it legal and accepted and they will pop up EVERYWHERE
...because men being who they are...will use the grocery and rent money to support them. Then the families will want more tax money to survive.

Come on Pat--be realistic--the less opportunity for this kind of behavior the better for all of us--men included!
Anonymous said…
all this is about is more cash for greedy government.
Anonymous said…
I disagree with 11:07, if the rancher lose that much in the cattle market, he has the "Farm Bill" to back up him and the Bank. If that is not a enough, maybe the rancher can get unemployment payments, even though he has never paid in, just like before. But the license owner doesn't qualify for federal aid.

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