Distilling the Future
Area cities pour revenue boost from alcohol sales into local improvements
EDITOR’S NOTE: This is the second of a two-day series about the evolution of beer and wine sales in the area, of which Texarkana, Ark., long held a monopoly. Today’s two stories highlight economic benefits reaped in Bowie County cities selling beer and wine and how crime trends have been affected. Friday’s stories charted the changes as several places have gone wet in recent years, drying up Arkansas-side’s revenues. Additionally, Friday’s stories examined how Texarkana, Ark., city officials and alcohol retailers are adjusting their business practices.
Precise measurements may be unattainable, but the economic benefits of allowing alcohol sales seem clear to officials in many Bowie County cities using boosted sales tax revenue to make improvements.
Calculating exactly how much tax revenue beer and wine sales generate is challenging, since Texas authorities do not track sales tax by merchandise type. However, public records and anecdotal reports show a correlation between going wet and increased sales tax income.
Nash, Texas, provides the most data because it went wet first, in November 2013. According to Texas Comptroller’s Office records, Nash’s average annual sales tax revenue leaped from more than $366,000 for 2007 through 2013 to more than $666,000 for 2014 through 2016.
“It has been very good overall, as far as finances go. But of course it was a lot better when we were the only players,” said city administrator Doug Bowers, referring to the year between Nash’s wet election and Texarkana, Texas’.
In that year, when Nash was the only city in Bowie County that allowed selling beer and wine, sales tax revenue went up 40 percent, but half of that gain disappeared when Texarkana followed suit, Bowers said.
Other growth offset the decrease, however, so revenues have remained steady. Bowers cited the Nash Business Park, which provides 500 jobs, and tractor-trailer dealership Lonestar Truck Group as two engines of local economic growth.
“We have started rapidly growing our retail sales tax base over here, so we have not been hurt totally by the lack of sales of alcohol. We’ve not lost any money, but we’re at a plateau and we’re staying the same.
“Being a small town, having enough revenue is always a challenge, having enough funds to do what we need to do on a daily basis. So it has taken a little bit of the pressure off.”
—Abbi Capps, DeKalb, Texas, city administrator
“I do know from talking to our beer and wine retailers that when Texarkana went wet, their sales dropped 50 percent on average here. And yet our sales tax continued to grow. So that tells you that we were not as dependent on alcohol as some people might have thought,” he said.
Since Redwater, Texas, residents voted to go wet in November 2015, the city’s sales tax income has roughly doubled, increasing from $3,000 to $4,000 a month to around $8,000 a month, Mayor Robert Lorance said. The revenue increase has allowed the city to provide services and infrastructure improvements, including about $30,000 in street improvements in May, without raising the property tax rate.
“I do everything with sales tax. My property tax is the lowest in Bowie County,” Lorance said.
The figures are similar in DeKalb, Texas, which went wet the same month, city administrator Abbi Capps said. There, the picture is blurrier because of new grocery stores opening in town since the election.
“Since that time, we have noticed about a $3,000 to $5,000 a month increase in sales tax revenue. However, the same month that this passed, we got a Walmart. … It didn’t even stay a year, and they pulled out. And so for a few months there was nothing down there, but we didn’t notice really too much of a decrease in sales tax during that period of time,” Capps said.
“And then Spring Market came in, and we’re still holding steady. So I can say a $3,000 to $5,000 a month increase in sales tax revenue, but with both of those stores and a couple of other new businesses that came in, there’s no way to differentiate what was from the additional businesses and what was from the sale of the beer and wine.”
Capps could not say with certainty that DeKalb’s choice to go wet was a deciding factor in those stores opening locations there. Neither Walmart nor Brookshire’s, which operates the Spring Market grocery store chain, responded to an interview request.
“Being a small town, having enough revenue is always a challenge, having enough funds to do what we need to do on a daily basis. So it has taken a little bit of the pressure off, as far as that goes. We do have a large street project coming up in the near future, and that increase in sales tax dollars is going to be really beneficial in helping to pay off the loan that we will get in order to do the streets,” Capps said.
New Boston, Texas, also went wet in November 2015. According to state records, sales tax revenue there rose 7.6 percent, more than $92,000, from 2015 to 2016.
Since going wet in November 2014, Texarkana, Texas, has shown the same trend, state records show. Sales tax revenue here averaged more than $13.7 million per year from 2007 through 2014. The average for 2015 and 2016 increased to more than $15.5 million. Total sales tax collected rose 2.79 percent, more than $412,000, from calendar year 2014 to 2015 and another 4.3 percent, more than $650,000, from 2015 to 2016.
Fiscal year 2015-16 saw more sales tax revenue growth than is occurring this fiscal year, but why is difficult to determine, Chief Financial Officer Kristin Peeples said.
“We saw some favorable sales tax growth, between 3 and 4 percent. We don’t know what that was attributable to, but it was a good year last year. This current year that we’re in has not been as favorable. We’re actually down a little less than 1 percent compared to last year. It’s not that we’re losing a ton of money; we’re just not gaining any more this year. Down a little bit, but not huge. It’s just we had hoped for another 3 or 4 percent growth, and we’re just not seeing that trend in this current year,” she said.
Asked if she was concerned that more Bowie County cities going wet could negatively affect Texarkana, Texas, sales tax income, Peeples took a wait-and-see approach.
“It’s not something up until this point that we’ve worried too much about,” she said. “We’ve been keeping a trend of the sales tax that we know we receive or anticipate receiving and go by that. I think because the detail is so limited, it’s really hard to know if any one change is attributable to any one thing. Obviously, we hope that those who currently shop and live in Texarkana, Texas, will continue to do that if that’s where their home is. Hopefully they will shop at the stores that sell alcohol in Texarkana, Texas. At this point, we’re just going by trends; it’s not something that we’re concerned about until we see that it’s a reason to be concerned.” Wake Village, Texas, elected to go wet in May 2016. According to the Comptroller’s Office, the city’s sales tax revenue jumped 26.6 percent between 2015 and 2016, increasing more than $100,000 for the year.
Kyle DeLaughter, owner of DeLaughter’s Grocery in Maud, said he supported this year’s successful wet campaign there, not only because it would help him retain customers and stay in businesses, but also would keep tax revenue in town.
“Alcohol is just a way for us to be able to survive. If we lose 10 customers a day because we don’t sell something that everybody else sells five minutes down the road, 10 customers a day will put us out of business. Ten customers a day doesn’t mean squat to Walmart or some other big store. But 10 customers a day to me or the gas station down the street, it kills us, and it almost did. “Now we’re going to be able to compete and offer our citizens something that now they don’t have to leave town. And now we’re going to be able to hire four or five new employees and not lay anybody off. … When this finally goes through, we’ll be able to have 12 employees at 40 hours a week—pretty significant for a town this size, for a grocery store.
“We’re just a little guy trying to make a living. I was tired of our town losing not just sales tax money from alcohol, but sales tax money from everything: fuel, clothes, tools, groceries, everything,” DeLaughter said.