Legislature might lift cap on liquor licenses?

The Associated Press is reporting this AM in the Rapid City Journal that the legislature might lift the cap on on-sale liquor licenses. Who would oppose it? Those who already have them:

The number of licenses a city or county may have is tied to population.

Dave Owen, president of the South Dakota Chamber of Commerce and Industry, said some consider the issuance of liquor licenses a quality-of-life issue.

“More and more cities are finding the kind of restaurant chains they want to attract won’t come in unless they can offer a full-beverage menu,” Owen said.


Caren Assman, executive director of the South Dakota Retail Liquor Dealers Association, said her organization opposes any expansion of the availability of liquor licenses because licenses already in hand are valuable.

“My businesses have invested in that liquor license. To just open up the cap would be like pulling the rug out from underneath their investment,” Assman said.

Read it here.

I'm tossed on this one. I certainly wouldn't want to harm small businesses. But the liquor license monopolies granted in this state have always mystified me. Businesses have the ability in South Dakota to transfer this license (with city approval) to wholly unrelated entities for cash, making it a marketable commodity going to the highest bidder, as opposed to the best qualified. Plus, it's a very limited commodity, giving it great value.

What say you SDWC readers? Yay to opening it up, or nay?


Anonymous said…
Liquor licenses can go for over $100,000. It's not good policy to make them worthless and let new businesses come in and get cheap licenses when others have invested big bucks.

I think the legislature should give first class municipalities the right to issue 1 extra license per 10,000 of population - but sell the new licenses at market value. All liquor licenses should be sold at market value.
Anonymous said…
Keeping the cap on the licenses is limiting the ability to attract more restaurants to my city. Our tax base would definately grow if we were allowed to open up the licenses to attract more restaurants. The local governments would then need to govern how they are handed out. They could just leave it open, or they themselves could put a cap on them. I know the ones who already own a license have looked at it as an invenstment, but they did take a big chance in doing that. I am sick of seeing a license being held hostage for the highest bidder at the expense of economic development in a city!
Anonymous said…

Something on which PP and I tend to agree!!

Why is it that if I want to open a barbershop, I need a barbers license, a sales tax license, and a place to do business but if I want to open a liquor store I need to PURCHASE a liquor license unless the municipality has one available?

It doesn't make any sense to me. And it surely flies in the face of free enterprise.

Of course, the powerful liquor lobby is going to be against it.

I don't have any objection to the municipality being involved in granting liquor licenses to be sure that the holders are of good character.

I don't object to the municipality being able to manage location via their zoning power.
Anonymous said…
One of the biggest objections will come from the bankers...

They have a lot of loans out there that are based on the current value of those licenses.
Anonymous said…
Actually, you're wrong. Bankers would rather see their towns grow and prosper and be able to respond to the needs of their customers. They'd rather make loans to several businesses as opposed to just one or two.

The current "system" of granting liquor licenses is an antiquated mess. No one should count on the bankers to maintain status quo. Let the liquor lobby stand on its own.

It's time for the cities and economic development folks to take back control, in my personal opinion. Past that, I'm interested to see how many of the right wingers are really for the free market/capitalist interests.
Anonymous said…
Try over $200,000 in Rapid City for a liquor license.

The owners of those licenses see them as an asset, and if the cities are allowed to flood the market with new licenses, they will lose most of their value.

This is an attorney's wet dream. It would be a clear case of a government taking, and look for law suits all over the state.

I'm all for more restaurants, but asking the legislature to throw out the old system isn't going to happen.

The best course of action would be to come up with a non-transferable license that would only be issued to businesses that generate most of their revenue through food sales.
Anonymous said…
Nope, not going to happen!

Our legislators are good Christian people. They know how devastating liquor is to the individual and family.

Being good Christians, our legislators won't allow liquor licenses to expand beyond what they are now!

Every church in South Dakota is going to come out against this proposal!

If you are a true Christian, you must stand up against an expansion of a policy that destroys lives and families!

Say "No" on lifting of the cap on liquor licenses! It's the Christian thing to do!

It will be interesting to see what legislators come out in favor of destroying lives and families!

We are watching! We are not going to let you talk the talk about being of “good Christian moral values”! We are waiting for you to prove it!
Anonymous said…
I love VJ. It's like Nonnie on steroids.
Anonymous said…
I will support it as long as the license goes to a smoke-free business.
People in smaller communties don't have the option to go to a bar without smoking and this would create that opportunity. I don't go to the bars anymore because I don't want to smell like a cigarrette and there are a lot of people that feel the same way so the business is lost anyway.
Anonymous said…
Speaking of limits on licenses, is there any other community in SD other than Rapid City that puts a limit on the total number of Video Lottery licenses?
Anonymous said…
anyone check out the new Senate seating chart on the RLC website, could be very interesting
Anonymous said…
VJ, I hope you don't spread yourself too thin with your morality legislation.

I thought your causes this year were going to be trying to ban cohabitation of unmarried people, banning contraceptives, banning abortion, banning premarital sex, and mandating weekly church attendance. Your plate is pretty full with these already.
Anonymous said…

I am convinced that if the majority of the world were poor Christians instead of Muslims and if Muslims were a rich minority instead of Christians that you and your ultra-religious ilk would be terrorists.
Anonymous said…
Ya right, VJ sure sounds like a guy who would go around blowing innocent people up.
I'm not in favor of unlimited licenses, I don't like the idea of economic development being so closely tied to liquor. If your community really needs another restaurant, someone will open it. I've not seen one SD town lacking for a bar that really wants one.
Even if a license is available from the city, doesn't it still cost money? They're never free, right? I could see a modest increase in number of licenses do to population gains, but not opening it wide up.
Anonymous said…
Right now under SD law, as cities gain population the number of liquor licenses that they can issue also increases.

If an establishment that holds a county issued license is annexed into the city, that license is grandfathered into the city, so the city actually ends up with more liquor than they are actually alloted.

Oh yes, the county can then issue another license to replace the one that went into the city.
Anonymous said…
... more liquor LICENSES than they are actually alloted.
Anonymous said…
Perhaps this is a good idea: Place a value of say $20,000 on all licenses. If the current license holder can PROVE he paid more, then the state should give him an iou for the difference. The State then can sell new licenses with no population limit for $20,000. This new money can go into a kitty that pays the IOU's off.
The end result should be a huge increase in sales tax revenues and eveyone being happy. Of course there will be those current license holders who want a monopoly for business. Don't we all wish it worked that way? Unfortunately all of the rest of us have to abide by competition and free enterprise.
Anonymous said…
In reference to VJ. Why would Churchs come out against more licenses? Does Nebraska have more crime or trouble? If you want a license there you just ask for it. You can have it if you are not a felon and a resident of Nebraska.
They have catering liquor licenses and special event liquor licenses too. They must be really running amuck in that State.
South Dakota needs to be in the 21st century, not the 1920's.
Anonymous said…

Great idea. Hopefully those who propose this will consider your idea. Im only half-hearted that they should recv money back. The monopolies that exist in holding these and selling at a premium do nothing but hurt competition and stand in the way of free enterprise.
Anonymous said…
vj- It's time you come to grips with the fact that your right wing edge got voted out this year.

The religious right won't have any effect whatsoever on the outcome of this bill.

The liquor retailers and the banks will be the biggest influences that might get the idea killed.
Douglas said…
Put a "real estate" tax on the liquor business that includes the sale price of the license in the appraisal.

Require licenses for bartenders and waitresses/waiters in liquor establishments that also require some investigation of person and all license revocation for serving anyone already intoxicated or anyone on the list of alcoholics, or to any woman obviously pregnant.
Angie said…
I would love to see the monopoly on liquor licenses be lifted. It's hurting small businesses, and it's preventing communities throughout South Dakota from expanding. Our economy is bad enough already...we don't need to keep hurting it.

As for VJ's rant about "every church in South Dakota coming out against this," I think he's overlooking two important details:

1. Not "every church in South Dakota" believes the exact same thing. I can think of many, many churches who wouldn't be opposed to lifting the cap.

2. Jesus came in pretty handy when the newlyweds in Canna ran out of wine:) While alcoholism can be difficult for families, a desperate alcoholic can easily go to the local grocery store to get a six-pack. The liquor license cap doesn't curb alcoholism; all it does is curb economic growth.
Anonymous said…
Right on Big Liberal. Not only can a boozer drink a 6 pack, but some have been know to swallow cough syrup to get a fix.
Also why is hard liquor limited and not beer and wine? Figure that one out. Can you only get drunk on liquor..no.

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