Just a couple of points why HB 1232 should come off of the table

I have to shake my head at some of my friends in the legislature when I see votes such as this one taking place as related by Bill Harlan in the Rapid City Journal:
Bar owners beat developers Thursday in a fight in the state Capitol over
whether to let South Dakota towns create districts with unlimited restaurant
liquor licenses.

Rapid City Mayor Jim Shaw had testified at an earlier hearing that the
special liquor-license districts would have helped spur development in four
large projects in the city costing almost $500 million.

But last week the full Senate rejected one version of the bill
18-15.Thursday morning another version of the bill was killed by an 8-5 vote in
the House Local Government Committee, despite a last-minute effort to find a
compromise.

Holders of current liquor licenses say the new districts would have driven
down the value of current licenses, which can be worth hundreds of thousands of
dollars because the state limits the number of licenses a city can have.

The compromise would have used money collected for the new licenses to
compensate current license holders for lost value.

Rep. Joel Dykstra, R-Canton, said the state's 60-year-old liquor-license
limits were "a real development constrictor," and he said the compromise bill
was a fair way to end an out-dated system.

Read it all here, And you can go see how the vote played out here. Why do I shake my head and think this vote is just plain wrong thinking when it comes to what's best for South Dakota?

#1 - Given our relatively small population, and otherwise aggressive pursuit of economic development opportunities, how in the heck can we look at ourselves in the mirror and say no? Opening it up would mean new businesses, new construction, and new dollars invested into the economy. And there's a big chunk of it which would flow in from outside of South Dakota.

So what if it's for chain hotels and restaraunts? Guess what - when some people look at areas to do business in, they look for the types of amenities that they have where they're from. And now we're voting to try to shut that out because of ancient liquor control laws that date from the days of "blue law legislation?"

My gosh. If we're going to maintain that type of backwards mentality, why don't we ban all alcohol sales on Sundays statewide, and mandate Church attendance? You'd think the WCTU was in charge and it was the 1930's.

#2 - Since when is it government's responsibility to guarantee the value of a license that people have decided to trade among themselves?

This is the part I have a little more sympathy on. But it doesn't go very far. Yes, some people have paid hundreds of thousands of dollars for liquor licenses. And I can see their point where they don't think it's fair that someone might be able to come in and buy a liquor license for a few thousand, when theirs might have cost them $100,000.

Now we're supposed to think that two wrongs make a right?

Over the years, we stupidly allowed government permits to be bartered like an old car. I mean, we don't allow fishing or hunting licenses to be sold for profit. We don't allow dog licenses to be traded for profit. But liquor licenses? Go right ahead.

We allow them to be bought, sold, traded, speculated on and held until their value might be higher as if they were grain sitting in a bin. But they're not a real commodity. They're a government license, that stands as a perfect example of what happens when government gets involved in market decisions.

(As an aside, do you think anyone is collecting sales tax when a license is sold by one person to another? Although, I think there would be normal B to B exemptions that would apply.)

Legislators, it's time to fix this mess and show some statesmanship for South Dakota. Ensure our future economic development and take positive steps to end trading in government licenses.

Pass the bill allowing special districts as a baby step towards fixing the mess started so long ago.

Comments

Anonymous said…
Here is a topic that could benefit from PP's expertise in following the money,,,,

Check out the campaign contributers of those that opposed this legislation,,,,,that will speak volumes,,,,

We keep electing people that are bought and paid for by special interests. This is exacerbated by the fact that the State is an Alcohol,Tobacco and Gambling PIMP, and we keep electing the prostitutes to represent us.
Douglas said…
Sounds like the state and cities should not sell licenses below their prime.

Why should somebody who pays a few dollars for a liquor license be allowed to sell it for an inflated amount? If somebody is willing to pay a $100,000 for a liquor license, that suggests the cities and state should charge $100,000 for all the licenses and have automatic escalator clauses in the permit process. Maybe run them for a month at a time.

If owner x sells Drunkard's Haven to owner y, Owner x should immediately lose that license and not be allowed to sell it to somebody else. Can we sell the licenses for our cars?

In any case, the liquor licenses and liquour taxes don't even cover the social costs of damage done by drunken drivers let alone all the other damage booze does to society and the economy.

Ironic that PP thinks the number of liquor licenses should be allowed to be wild west free and wide open, but thinks big cousin government in South Dakota should be meddling in reproductive freedoms and health.
Anonymous said…
Here the amazing part.

Tim Rounds, the Govs younger brother was the one who help kill HB 1232 in committee.

I thought the Gov supported the bill?

I guess you never know.
Anonymous said…
Rapid City Mayor Jim Shaw doesn't have an independent thought in his head. And in this case, he didn't even consult the city council or community leaders. He just went ahead and used a city vehicle and tax dollars to go to Pierre so that he could get out of town and cozy up to his puppet masters.
Anonymous said…
I guess free market capitalism is only used when it is convenient. Shouldn't the market dictate all of this instead of government intervention preventing some people from getting a license to protect the profits of someone else?

Sounds like more nanny state stuff.
Anonymous said…
PP,

You act as though there are no licenses available. Do your homework.

There is a dynamic market in liquor licenses now. Six licenses were sold last year in Rapid City alone according to committee testimony. A current liquor license holder offered to sell his license to the developer behind this bill. The developer declined. Said he'd wait and see how the bill did.

Please tell us which new businesses, new construction, and new dollars have NOT come into South Dakota because they would have had to pay market price for a liquor license?

Looks like you're just a tout for corporate welfare on this one.
Anonymous said…
This isn't just about the development in Rapid City. There are communities like Yankton that don't have extra liquor licenses available and bar business is good enough to warrant too high a price for developers and chains to take a risk on smaller communities. Also, Shaw is the full-time Mayor of Rapid City and doesn't have to consult with the council on every issue.
Anonymous said…
for years the legislature has responded to legitimate requests for liquor license exceptions without destroying the value of existing licenses--the people that Need additional licenses should use a rifle in place of a scattergun
Anonymous said…
It is my understanding that there was an amendment to let/require cities charge fair market value for these licenses, that should have silenced all critics-- if that is true-- that would have removed the cap, while protecting the investment of current license holders. Is it true there was a similar amendment ?

anybody know ?
Anonymous said…
PP, please tell your friends in the legislature to get a clue. I don't mean on just this issue. Just in general. Tell all your legislative friends.
Anonymous said…
PP--

Once again you make more sense than almost everyone else.

It's incredible that the people of SD should lose out on the value of these licenses and allow privateers to reap all the rewards.

If the licenses are public, the public should get the value.
Anonymous said…
I believe the origional bill would have reimbursed the current license holders somewhat over a five year period, but the amount they would have received was a small % of their loss of value of their license.

If you listen to the hearing in committee it was amended to be better but still would not compensate the current holders for their loss. Remember that some of these license holders have loans for which the license is collateral.

Some have commented that the extra licenses are needed for economic development. Rapid City currently has two licenses for sale as one owner testified his was for sale. It was said that Watertown has two licenses not being used and are for sale.

I agree with some testimony that the developers just don't want to pay the going price for the licenses, but pay the going price for land, building materials, and equipment and supplies to stock the business.
been there said…
To Tim Round's credit, he is pretty independant and often doesn't vote his big brother's wishes.
a_big_liberal said…
PP, I think this might be one of the issues on which I'm in complete agreement with you.

I don't understand why, just because certain businesses fell victim to antiquated liquor-license caps and their subsequent price-gouging, means that that we should perpetuate a bad policy.

When we finally identify a bad law as such, and have the opportunity to fix it, they have the responsibility to take that opportunity. What's worse, this situation not only granted them the chance to right a wrong, but to compensate the previously wronged business owners.

And they blew it.
Anonymous said…
Mike Derby was the individual who testified about having a licesne for sale. He is asking $250,000 for it. Such a good example of his desire to further economic development in the Rapid City area, his economic development that is. His testimony provided the reason the bill should pass, pure unadulterated greed. Kind of like the 20 dollar sandwiches he sold the Red Cross.
mikem said…
If any legislators interested in why this law should come off the table, they only need to look as far as Fort Pierre. The same family owns two on-sale liquor licences and one off-sale liquor licence. They have owned them for at least the last 20-30 years, and to the best of my knowledge refuse to sell these licences.

The thing is that only one of these places is open. The other two sit empty as blights on the community, except for one day a year when they are opened to keep possesion of the licence. People who want to invest money in a restaraunt in Fort Pierre have no chance of getting a liquor licence, so who wants to invest?

Any of you who have made the trip to Fort Pierre in the last ten years are sure to notice the lack of economic development on the west side of the river.

Forget the value of the licence; is it fair to keep out competition in a small town just because you were able to buy all the licences before others came in?

To use douglas's earlier example. If there were a limit on car licences, and I bought them all on the first day; do I get the roads to myself?
Anonymous said…
10:17 has it right. Derby's "public service" comes at a high price.Black Hills Vision seems to be nothing more than opportunities for Derby to make money. If he was truly concerned about deveopment in the Black Hills and less concerned about his own pocketbook he would have been promoting the passage of 1232. Shame on him!!!
Anonymous said…
Follow the money.

Yeah, let's see, advertisers on this blog are lobbying for this legislation . . . how far should I follow the money, or should I just stop at your pocket?
PP said…
6:46 - God forbid my opinion might coincide with someone who is lobbying to fix a government screw up.
Anonymous said…
Looks like 6:46 cut the "professor" with the "professor's" own two-edged sword.

We should follow the money when it suits the "professor" and his allies but dismiss it as coincidence when the dough leads to the "professor's" door step.

Coincidence - that's good to keep in mind next time PP plays his "follow the money" game.
PP said…
*yawn*

So far, supposedly, I write as I do because the Republicans pay me, AFP pays me, I'm playing favorites because an advertiser is lobbying on something or another, and last election, I wrote as I did because my advertisers then paid me.

What, am I in support of the HPV vaccine because Merck is supposedly paying me?

Sorry, I don't tailor my posts because anyone pays me to write.

Just as how no one pays me to dump particularly offensive and over the line comments about Democrats, including ones about Herseth I dumped last election, comments on Sutton I dumped this session, and another one I dumped tonight.

If someone wants to pay me for particular posts or comments, I'd love for them to line up with their checkbooks in hand, and I'd write my little heart out. *HERE I AM!!*

But unfortunately, Wal-Mart is the only one who does that, and I haven't been able to find their website where they're recruiting bloggers.

(But just in case Merck wants to advertise, they can contact me at dakotawarcollege@yahoo.com)
Anonymous said…
Dont let'em get u down PP,,, they are probably a couple of "elected prostitutes" for the current liquor license holders

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