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It stretches beyond economics, actually.
The issue? Whether the South Dakota Legislature should eliminate the current limit of liquor licenses that each city and county can have and transfer the authority of regulating the licenses to local governments. Or keep everything status quo.
A Mitchell lawmaker says that he’s contemplating whether to introduce a bill during the coming session to remove the limits and let cities and counties decide how much liquor should flow within their boundaries.
A current formula pegs the number of licenses to census figures, but that system has given birth to a big-dollar, behind-the-scenes market where businesses in need of a liquor license will buy one from another establishment.
In Sioux Falls, the official licensing fee is $155,000, and one can only guess how high private-market sales reach.
It seems that under the current environment some business owners bought licenses decades ago with the intention of selling them, presumably for a profit, when they retired. In other words, they’ve used the licenses as investments.
Since the only investments I have are my 401(k) and two measly IRAs, it’s hard for me to fully comprehend the potential loss that some of these business owners might face if there suddenly is a flood of new licenses, essentially making their existing licenses worthless.
However, if some business owners do view the licenses as investments, then they well could be facing a painful but unavoidable fact that investments can go south. That’s the excruciating rule of a free market.
So it’s difficult to justify maintaining the current system primarily to protect current license holders.
And the discussion of whether the Legislature should toss the decision to local municipalities is a red herring.
Even if the Legislature decides to allow for local control, cities and counties across South Dakota essentially would remain in one, big boat.
That’s because regardless of who makes the rules, the real question is whether there should be a limit at all. It’s only after that answer appears can any entity then start figuring out how to distribute the prized possessions.
In that light, the issue is more correctly framed as a public safety versus economic development conundrum.
And, honestly, it’s a toss-up regarding which side weighs in heavier.
About a year ago, Sioux Falls suffered through a devastating string of teenage alcohol-related deaths. Many of you may remember the news reports of those tragedies.
The loss of those precious lives should stand as a reminder that we’ve got a long way to go in maturing as a community in our relationship with alcohol.
As a matter of fact, it’s not just youths who show problems handling their alcohol. Statewide, drunken driving statistics show that South Dakotans oftentimes still don’t know when to quit.
On the other hand, there are businesses, particularly restaurants, whose very existence depends on being able to let customers enjoy a drink with a meal.
And as Sioux Falls continues growing, it’s imperative that the city offer the variety of entertainment options that people desire.
So what’s a growing city to do? And what’s the Legislature’s role?
All I know for sure is that the solution involves more than economic considerations.
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