Idaho’s state Liquor Division is again requesting to add two new state liquor stores in the Treasure Valley – a request the division made and Gov. Butch Otter recommended last year, but lawmakers rejected.
“Idaho is the fastest growing state in the country,” division Director Jeff Anderson told the Joint Finance-Appropriations Committee. He said the two new Treasure Valley stores “are needed to adequately serve Idahoans in southern Idaho.”
He said the division is forecasting a “100 percent return on investment in less than two years, based on past history.”
Idaho has had the same number of state liquor stores since 2008, Anderson said. The division also is proposing to remodel or relocate seven existing stores next year, which it typically does when leases run out for store locations. Gov. Butch Otter recommended funding for the moves in his budget proposal for next year.
The Liquor Division receives no state general tax funds; it operates solely on proceeds from state-controlled liquor sales. It also turns over its profits to the state; last year, in fiscal year 2017, the division turned back $73.3 million in profits to the state, including $29.1 million to the state general fund and $42.3 million to cities and counties. Courts, schools and substance abuse treatment services also received payouts.
Last year, Sen. Dean Mortimer, R-Idaho Falls, who serves on JFAC, raised concerns about adding the two new Treasure Valley stores, saying, “I really question the return. … If it’s just a matter of convenience, I’m not sure I want to expend our dollars for convenience.” JFAC last year approved its budget for the Liquor Division on a split, 11-9 vote.
Anderson focused his request this year solely on the return.
His budget request – and the governor’s recommendation – also calls for adding Sunday hours of operation at three North Idaho stores, in Orofino, St. Maries, and Priest River, where Anderson said the move would “provide improved customer service.” Budget documents show the additional hours would cost $12,800 next year, but increased profits would immediately offset that.
Rep. Steve Miller, R-Fairfield, asked Anderson, “You mentioned that the number of stores hadn’t changed for quite a while. There’s always kind of a tension between availability and consumption. Can you make any observations on the number of stores and extended store hours on the amount of consumption?”
Anderson said, “Per-capita consumption in Idaho remains among the lowest in the nation.”
Increased sales figures at the division, he said, largely reflect that consumers “are purchasing higher-priced products, not necessarily more. There’s a phenomenon going on in the beverage alcohol industry in general that consumers are gravitating away from beer to spirits and wine. And even though we are selling more, our per capita consumption remains low.” Based on the figures, he said, “I don’t think we have to worry about over-consumption.”
Sen. Mary Souza, R-Coeur d’Alene, had a different question: She noted that Washington recently privatized liquor sales, while imposing “quite a hefty tax on it,” and asked, “Would we have more funds available if we went to the retail model that Washington state has?”
Anderson said, “It’s difficult to know whether or not the government would make more money.” Idaho has seen increased liquor sales to Washington residents in border areas, he noted, because that state’s privatization move resulted in higher prices. Still, he said, “The state of Washington went from 360 locations to over 1,600, so they’re selling more liquor now, even with the cross-border sales.”
He predicted that those cross-border sales will continue in Idaho.
The Liquor Division’s budget request also calls for restoring a deputy director position that was cut in 2012. That request also was recommended by Gov. Butch Otter last year, as it is this year; lawmakers last year declined to include it in the budget.