Liquor Licensing needs a full overhaul in our state

While I understand the concern and the intentions of Sioux Falls City Councilors Erickson and Selberg, I think instead the legislature needs to overhaul the entire system;

“It’s just created this crazy investment for some that have seen incredible return on it, and it’s not supposed to be that way,” Erickson said.

I agree that to often developers and business owners have been using the current licensing system as an investment with big returns instead of actually using it for it’s intended purchase. I agree with this line in the proposal;

“Use it or lose it!” Once offered the license, the individual or corporation must purchase the license. If unable to purchase, they will no longer be able to remain on the list.

And while that will be a good fix in the short term, in the long term I have suggested a better solution, giving out yearly licenses like we do for beer and wine, something other states have done for years. In Nebraska they do yearly licenses. For example, you can either buy a beer and wine license for the year or a full alcohol license for the year. That price tag would also depend on the population of the city. For example in Sioux Falls it could be $10,000 a year but in Dell Rapids it could be $1,000 per year or less.

Some ask ‘what about those with licenses already?’ You would give them a ‘credit’ on the license that they could use against the yearly fee, that price would be based on the current value of a new license. So let’s say it is worth $200K, that means you could avoid the licensing fee of $10K for 20 years. But you could not transfer that credit to another bar or another owner. Once you sell or close, the grandfathered credit would end. I would also suggest a limit like our current system, but it would be way more competitive because new licenses could become available yearly because of businesses closing or not renewing their licenses. This also helps the business owner who may go out of business, decide to close on their own or just say after a year, they really don’t see the value in having the license. This way they are not ‘stuck’ with something they need to sell on the open market. It also makes the bar and restaurant business more competitive so that people that don’t have the means to compete now with the current system can with the new system. It evens the playing field. And with more competition, it gives consumers a better value. I also see it as a better revenue stream for the city on two fronts. You are collecting yearly licensing fees and probably collecting more taxes from alcohol sales, which in turn could be shared more fairly with the counties. This is a far better approach then just changing a few rules in our city.



1 comment so far ↓

#1 Ljl on 11.23.19 at 11:27 am

Many in the legislature own these “liquor investments”.

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