Tuesday, August 21, 2018

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Economic study fuels debate over smoking ban

Some bars and restaurants in Hennepin County have reported slower revenue growth since the county passed a comprehensive smoking ban this spring, according to a study released Wednesday by Hennepin County. The authors of the study say the data is limited, and isn't sufficient to conclude the ban is the reason for the slower growth. However, some in the hospitality industry say the ban is responsible for significant losses of revenue. They want the county to roll back some of the ban's restrictions.

Minneapolis, Minn. — Hennepin County examined sales tax revenue data from 497 bars and restaurants, comparing data from the months of April, May and June in 2003, 2004 and 2005. The smoking ban went into effect in April 2005.

The study found that for the most part, liquor and food sales did not go down since the enactment of the ban. In general, revenues rose. However the study found that the rate of growth between 2004 and 2005 was lower than the growth rate between 2003 and 2004.

Dave Lawless, director of the county's office of budget and finance, says the survey doesn't necessarily mean the smoking ban is responsible slower growth. "We do not have evidence that is definitive in that regard, given the wide variety of changes just within Hennepin County," he says.

Lawless' office was responsible for producing the study. Lawless says without more data, it will be hard to account for economic and other factors that might not be related to the smoking ban, such as trends in the weather or changing preferences in restaurants and bars.

"I think we were suprised by the big disparity in business between the communities within Hennepin County. Given that it was a countywide ban, it kind of indicates that it wasn't totally conclusive that the smoking ban drove this," Lawless says.

The study did show that under the ban, Minneapolis establishments fared better than those in the suburbs. Minneapolis bars and restaurants also experienced an 11 percent boost in food sales.

But the study also found that overall, smaller businesses were more likely to show a decline in liquor sales than larger bars and restaurants.

Mike Jennings, the president of the Minnesota Licensed Beverage Association, blames the ban for significant drops in revenue in at least 14 establishments he's familiar with.

"For instance, May of 2004 was $795,000 in sales at these 14 establishments. In May of 2005 it was $608,000. And June of 2004 showed $774,000 in sales and June of 2005 it was $605,000, so that's a pretty significant drop," Jennings says.

Jennings also says the Hennepin County study doesn't go deep enough to measure the negative effects of the ban. However, he says the figures that show smaller establishments having more problems sounds right to him.

For example, Jennings believes the small, family-owned neighborhood bars in northeast Minneapolis have been hard hit.

"As one commissioner had put it, there's house, house, house, bar; house, house, house, bar. And there's a higher percentage of smokers there," says Jennings. "And those people are experiencing huge issues, because even though they're in Minneapolis, they're only a couple miles from Anoka County."

Anoka County, just north of Hennepin County, doesn't have a smoking ban. The report found that establishments located in Anoka enjoyed substantial growth in food and liquor sales.

Jennings says the county board should alter its smoking ban to help level the playing field for Hennepin County bars. He says the county should allow smoking in establishments that sell more liquor than food, which would mirror the Ramsey County ordinance.

However some Hennepin county commissioners, like Gail Dorfman, don't support modifying the smoking ban. At first glance, she says the results of the study show the ban is working just fine.

Dorfman says the ban was put in place for health reasons.

"We are a public health authority, and so we have the responsiblity to look at environmental factors that have negative impacts on public health and do something about it," Dorfman says.

The economic impact study was championed by a commissioner who wanted the research to help convince other board members to support a loosening of the county's ordinance.

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