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Published on Friday, April 24, 2015

City liquor revenue in play during special session

As the special session begins, you may be wondering how much to expect in city liquor revenue over the next few years. The answer: local liquor revenue is still in play as the Legislature continues to negotiate the state’s two-year budget, and a number of outcomes are still possible. The good news is that we have not yet seen any proposals that would reduce city liquor revenue below current distributions.

One option is that cities will continue to get an amount very close to what they are receiving now. This is because the Senate’s proposed state budget continues the 50% cut in local liquor taxes from last biennium. On the other hand, the House’s proposed budget does not continue this reduction, which means cities would see an increase of approximately $10 million per year over last year.

Another possibility is that cities could see an increase in liquor revenue next year through proposals that restore the growth in city liquor profits. Unfortunately, AWC’s priority bills to reinstate the historic sharing between the state, cities, and counties (HB 1517/SB 5896) have gotten very little traction in either chamber. It is still possible, but appears unlikely, that one of these proposals could pass this year.

More optimistically, negotiations continue on HB 2156, promoting the fiscal sustainability of cities and counties. This proposal would increase city and county liquor profits next biennium and ultimately reinstate the historic distribution formula in state fiscal year 2024. More details about that proposal are in this article from last week’s Bulletin.

As noted elsewhere in this Bulletin, your voices could make the difference about what happens with this important revenue source for cities. Please take a few minutes to contact your legislators.

Categories: Budget & finance