This is an archived article that was published on sltrib.com in 2010, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
For decades Utah earned the reputation of being a state that loves limited government. The 2009-2010 Legislature is 71 percent Republican, and the state is dominated by that party. There is no doubt of the depth of limited-government feeling in the elected officials and general populace in Utah.
But in at least one area, liquor licenses and sales, the limited government focus is missing. The current laws betray the principles of limited government and personal responsibility, and kill potential revenue.
Alcoholic beverage sales are regulated by the Department of Alcoholic Beverage Control. Packaged beer is sold at supermarkets, grocery and convenience stores. All wine and liquor is sold at state liquor stores; one store permitted for every 48,000 citizens. The number of liquor licenses available to bars and restaurants is also based on population.
Limited government is a first principle for virtually all elected Republicans (and many Democrats). How can they keep a straight face and make limited-government arguments when the Utah government not only regulates (all states do to some degree) but actually sells wine and liquor?
The DABC website notes "By keeping liquor out of the private marketplace, no economic incentives are created to maximize sales…" True, but that denies limited government and support of the free market. In addition, privatization of liquor sales would benefit consumers through increased choice and lower prices.
What about personal responsibility?
"Control systems [the current Utah liquor system] promote moderation in consumption," says the DABC website. While they may promote moderation, there is no evidence to support the claim that promoting moderation actually results in moderation. A recent Commonwealth Foundation study looking at national per-capita alcohol consumption in 48 states noted:
"A comparison of states with varying degrees of privatization in retail and wholesale markets for alcohol over the period 1970 through 2006 suggests that privatization is associated neither with increased alcohol consumption nor increased traffic fatalities involving impaired drivers."
According to the DABC website, "In FY 2009, gross sales [at state liquor and wine stores] totaled $267 million with a net profit of $59 million." What would that number be if private enterprise ran the stores?
In 2007, Reason Foundation members testified before the Pennsylvania Legislature regarding privatizing Pennsylvania's state-run liquor stores. Their testimony, equally true for Utah, noted:
"First, ongoing revenues will not be negatively impacted. Taxes on wine, beer, and spirits don't go away with privatization. Any revenues that are collected from licensing bars and restaurants will also continue to flow ... . In addition, a new form of revenue will be generated through privatization licensing of new retail stores … . Further, private establishments also pay income and property taxes representing additional revenue streams to state and local governments."
Sales would increase due to residents buying in-state who now buy cheaper products in neighboring states. The state would realize a one-time revenue enhancement of tens of millions of dollars from the sale of 44 state liquor stores and warehouse.
Finally, privatization would increase tourism among folks who now avoid the state due to its reputation and policy regarding liquor sales.
A recent Associated Press story notes that "Several national restaurant chains have expressed interest in opening businesses here but said they will not locate in Utah because they're worried they can't get a liquor license." Less tax revenue and fewer jobs.
Given the dominant political ideology, the current policy is hypocritical. It encourages the nanny state and discourages personal responsibility. Finally, it costs the state needed revenue. Utah should be consistent with the dominant ideology and privatize liquor sales, and in the process increase revenue and jobs.
Tom Garrison had a 15-year career as a radical democratic socialist, along with a full-time job editing a political science journal. Now he's a libertarian living in St. George.