Idahoans are buying more liquor from state liquor stores, but they’re not drinking more alcohol.
That’s because consumption of spirits is increasing at the expense of beer, part of a nationwide trend, said state Liquor Division Director Jeff Anderson. “So while overall alcohol consumption is static, the share of that has been changing,” Anderson explained.
Anderson told state lawmakers last week that the Liquor Division returned a record dividend of $85.3 million in fiscal year 2019, an increase of $6.8 million.
“This net revenue is derived from the normal wholesale and retail markup that would occur whether we did this or not,” he told the Joint Finance-Appropriations Committee. “Our distribution forecast for fiscal year ’20 is $89 million, and for fiscal year ’21, $93 million.”
“Responsible stewardship, low outlet density and limited by convenient hours of operation again led to per-capita consumption of spirits that remains well below national averages,” Anderson said.
Over the next decade, he estimated the state Liquor Division, which controls sales of hard liquor in the state but not beer and wine, will distribute more than $1 billion in net revenue to beneficiaries, including the state general fund, city and county governments, court services, substance abuse programs, public schools and community colleges.
Among the division’s budget requests for next year is to remodel or relocate liquor stores in Caldwell and Eagle. The division receives no state general funds, operating instead on the revenues it generates.
‘Toads’ say cut sales tax to 4%, boost schools
A new citizens group spearheaded by former Idaho Supreme Court Justice Robert Huntley is pushing a plan to lower the state’s sales tax from 6% to 4%, while eliminating an array of existing sales tax exemptions, including the exemption for services. They say the move would bring in $769 million in increased revenue to the state, enough to significantly boost funding for Idaho schools.
Huntley said he’s working with a group of former school administrators and others who have organized themselves under the name “Totally Optimistic Advocates Dedicated to Students,” or as an acronym, TOADS. Among those signing on as TOADS are former Idaho congressman Walt Minnick and retired newspaper publisher and former Democratic nominee for governor Jerry Brady.
Huntley has long promoted the idea of cutting sales tax exemptions to raise more money for schools, which the Idaho Constitution charges the Legislature with funding. “We are underfunding Idaho education,” he said in a statement. “We cannot ‘grow our way out of this problem.’ Student enrollment grows at 2.2% per year, and inflation is at or above 2%. … We only fall further behind year by year.”
Huntley said the group has a three-year plan, which calls for a push to “stop further destruction of the tax base this legislative session”; developing draft legislation to be proposed in the 2021 legislative session; and a citizens initiative for the November 2022 ballot that “will likely be needed.”
Current exemptions from the Idaho sales tax – which range from utility sales, sales of prescription medicines and research and development purchases by the Idaho National Laboratory to services including health care, transportation and education – add up to $2.8 billion, according to state Division of Financial Management documents. The TOADS want to eliminate $2.2 billion of those.
Lawmakers have long struggled to address sales tax exemptions. In 2007, the Legislature formed an interim committee to review all sales and income tax exemptions, but despite extensive review, the panel ended up proposing repeal of just a couple of small ones, none of which the Legislature agreed to repeal.
Huntley, who was the Democratic nominee for governor in 1998 and who also won a long-running lawsuit against the state over funding for school facility construction, was most recently in the news when he pulled together a group of nearly 50 Idahoans in September to sign on to two-page newspaper ads around the state calling on Idaho officials at the state, local and congressional levels to take action on climate change.
And on the numbers…
Idaho Public Utilities Commissioner Paul Kjellander got a laugh from the Legislature’s joint budget committee last week when he opened his agency’s budget presentation with this comment: “My understanding is there are three kinds of people: those who can do math and those who can’t.”
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