Drinking Better 

Sales of liquor are up in Idaho, but not because people are drinking more

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click to enlarge The 17th and State Street store (left) hasn't been redesigned yet, while the Liquor Store on Grove Street (right) has an especially unique appearance. - JESSICA MURRI
  • Jessica Murri
  • The 17th and State Street store (left) hasn't been redesigned yet, while the Liquor Store on Grove Street (right) has an especially unique appearance.

The new store is substantially bigger and more open, with new products, cocktail ingredients and sale items throughout. Where there used to be a dozen varieties of bourbon, now there are almost 30. Where there used to be one type of vodka, now there are more than 50—some of the weirder vodka flavors include glazed donut, cotton candy and salted caramel.

The 2014 Annual Report released by ISLD shows the trend of liquor sales on a continual upswing. This year, liquor sales resulted in $63 million for the state. In 2013, the numbers were about $3 million less. In 2012, the numbers were higher, but only because of some ISLD efficiency measures. In reality, liquor sales for 2012 were closer to $55 million, according to Anderson.

Despite the rise in profits, Anderson said people aren't necessarily drinking more. Per-capita consumption remains low, while sales continue to climb.

"People aren't just boozing it up," he said. "Their tastes are evolving."

Anderson said 20 years ago, most people who shopped at liquor stores drank whiskey or scotch. Most young people would take a Budweiser over that.

Now, people have more spirits to choose from, so are moving away from beer and wine sales.

Liquor stores in Idaho are also making it easier to purchase spirits with more locations (there are 12 inside Boise city limits), longer hours (most stores don't close until 9 p.m. on Friday and Saturday nights) and better selections.

"People don't have to figure out where their cocktail menu book is," Anderson said. "They can take that orange vodka, and put some tonic water in there and have a nice, refreshing drink."

Anderson said a recovering economy also means Idaho consumers are willing to spend a little more for a bottle, contributing to the increase.

The same holds true for on-premise drinking—meaning alcoholic beverages ordered at bars and restaurants. While the recession was in full force, Anderson said people didn't want to spend $9 on a cocktail. Now, people have more disposable income, so are likely to spend a little more.

"It's a canary-in-the-coal-mine indicator that economists look at, actually," Anderson said. "People are treating themselves."

Distributing the Cash

Liquor sales for fiscal year 2014—July 1, 2014-June 30, 2015—brought more than $63 million to the state of Idaho. Every year, those revenues are distributed through a fixed formula: about 2 percent goes to public schools ($1.2 million), 3.3 percent goes to substance abuse treatment, 1 percent goes to the state's three community colleges ($200,000 each), some goes to court services and welfare, and the rest is dispersed to the state's general fund and then divvied up to counties and cities.

It gets complicated. The general fund and the city/county fund split the money 50/50. What the cities and counties get depends on how much liquor they sold. For example, Boise sold $32.8 million in liquor in 2013 and received $3.2 million in 2014.

Liquor Division CFO Tony Faraca said cities and counties are handed a check and allowed to do what they want with the extra cash.

"I think Boise's goes into their general fund," he said. "Some communities send it to the police department, others give it to parks and recreation."

According to the most recent report, 2014 liquor sales contributed $24.2 million to the state's general fund. While it's a helpful boost here and there, it makes up only a small portion of the fund.

"We generated $5.2 billion for our general fund from sales tax, property tax and income tax," said Keith Bybee, principal budget and policy analyst for the Joint Finance-Appropriations Committee. "So $63 million out of $5.2 billion—I think that could be defined as a drop in the bucket."

Still, Anderson projects the Liquor Division will earn three-quarters of a billion dollars for the state, counties and cities over the next decade. He and Faraca both take it as a point of pride that the money from liquor sales stays in Idaho.

That's different for states that have privatized their liquor sales, opening the market to private sellers of hard alcohol under more relaxed regulations.

Idaho is one of 21 states and municipalities that still control liquor sales—along with Alabama, Maine, Montana, North Carolina, Utah, Vermont and Wyoming. Since Idaho is still a so-called "control state," liquor can only be purchased at state stores and never at retailers like Albertsons or Wal-Mart.

"Everything we earn and make stays in Idaho," Faraca said. "If you compare it to Washington [which privatized liquor sales in 2012], its retailers like Wal-Mart have headquarters in Arkansas. That money doesn't stay in the state, it goes back to wherever those companies are headquartered at, then to the shareholders and dividends. Most of those are out of state."

One of those states benefiting from Washington liquor purchases is Idaho.

Before the policy change in 2012, the price of liquor was about the same on both sides of the border. After Washington privatized sales, it added a 20.5 percent tax at checkout, whereas in the Gem State it's still only 6 percent.

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