The 2012 vote to make Benton County “wet” has had a positive economic impact on the Northwest Arkansas county, but it may be a while before the full extent of the impact can be fully documented.
“You can drive down the street in Benton County and see construction on liquor stores,” said Kathy Deck, director of the Center for Business & Economic Research at the University of Arkansas Sam M. Walton College of Business.
Thirty liquor stores have already opened in the county, according to the Alcoholic Beverage Control Board, and 11 more have received conditional permits but have yet to open.
In February 2012, Deck’s research team released a study examining whether Benton County would benefit economically if selling alcohol were legal within the county’s boundaries.
The study concluded that if the county had been wet in 2010, it would have had additional retail sales of nearly $78 million and similar levels of retail sales in subsequent years. “These sales would have generated a previously nonexistent recurring economic impact of $33,044,013 … that would remain in Benton County,” the study said.
Benton County voted to legalize retail alcohol sales that November, and sales began the following year. Madison and Sharp counties also approved in-county alcohol sales at the same time.
Deck issued a similar study in June 2014 concerning economic impact to Craighead, Faulkner and Saline counties, should those counties legalize retail alcohol sales. That study also found the counties would benefit from additional sales tax revenue.
Voters in Saline County and Columbia County approved a law change to make their counties wet in November 2014
“One of the impacts we claimed in the [Benton County] study was new facilities,” Deck said, referring to liquor stores.
“We didn’t say they would all be new — for example, existing stores might get permits for retail. Certainly we have seen and we do see that. Construction and sales are happening. If you look at the number of construction permit applications, it shows the perception that there is more economic opportunity.”
Benton County Growth
Deck said new restaurants also are being built and still others announced, and that represents growth in the food service industry.
“If you look at some of the economic development going on in Benton County, and in Bentonville particularly, they are directly related to kind of culinary/foodie culture, and alcohol is a part of that,” she said.
Benton County Comptroller Brenda Guenther said the tax revenue on alcohol sales from liquor stores generated an additional $3 million in fiscal year 2014-2015, compared to the previous calendar year.
“There has been some impact,” Guenther said.
But while there is anecdotal evidence indicating that the county’s decision to go wet has positively affected the county, Deck and Guenther are quick to note that the county’s economy was already strong. Unemployment in Benton County is at 4.5 percent, and overall sales tax collections last fiscal year were up more than 8 percent over 2013-2014. Sales tax revenues in neighboring counties also are up significantly compared to last year.
“There is certainly a lot more liquor sales here,” said Raymond Burns, president and chief executive officer of the Rogers-Lowell Area Chamber of Commerce. That alone indicates that Benton County residents are no longer traveling to Washington County or northward to Missouri to buy liquor.
“I think probably the majority of those sales have just shifted,” he said.
A few restaurants also have opened since the county went wet, he said, and hotels and motels are also reporting more guests — but, it’s difficult to say whether that is a direct result of alcohol being available locally.
David Lang, general manager of Embassy Suites in Rogers, said the vote to go wet has helped the hotel and motel industry and brought in a few restaurants, but he’s not sure it has had had a large revenue impact.
“I think any revenue impact and tax implications from an economic standpoint are probably more liquor store based than they are for hotels and restaurants,” he said. “Now, from a customer service standpoint there have been huge benefits.”
“The limitations were kind of ridiculous for people who were coming into the county, traveling,” he said. “You couldn’t deliver a beer with room service. For us as a full-service hotel, the impacts have definitely been more on the service side.”
Lang also said that the Walmart Arkansas Music Pavilion in Rogers, which opened in 2014, “wouldn’t have been in Northwest Arkansas if we had been a dry county. You couldn’t stand outside at a concert and have a beer. It would have been against the law.”
Arvest Ballpark, the home of the Northwest Arkansas Naturals, which opened in 2008, was built in Springdale because Washington County was wet, he said.
Clark County Convenience
In Saline County, more than 40 applications for alcohol retail permits were filed with ABC, and 23 were approved in August. “With that number of permit applications, it shows the perception that there is economic opportunity there as well,” Deck said.
Clark County Judge Ron Daniel and other economic development officials in that county said their county’s sales tax revenue has risen modestly since the county voted itself wet in November 2010, and there have been other benefits.
“The biggest thing has been it is just more convenient,” Daniel said. Clark County residents no longer have to drive through dry Hot Spring County to Garland County to buy their liquor.
“We used to have a lot of wrecks, kids and everyone else going from here and Hot Springs, but that has cut down tremendously,” Daniel said.
“You now see a lot of older people staying at the motels and walking across the road, and they come and get one of those big cans of beer in a sack and they walk back over to the motel,” he said.
Daniel said the county’s sales tax receipts are up about $15,000 a year since liquor sales were legalized. “It’s $15,000 we couldn’t have,” he said. “We’ve got it now. It does help.”
There are four liquor stores located in Clark County — two in Arkadelphia, one in Caddo Valley and one in the county, Daniel said, adding several restaurants in Arkadelphia and Caddo Valley also sell alcohol.
Stephen Bell, president and CEO of the Arkadelphia Regional Economic Development Alliance and Area Chamber of Commerce, agreed with Daniel that the hotels along Interstate 30 in Clark County have seen an increase in occupancy rates, and that liquor sales haven’t dramatically changed the county’s finances.
“I think it added a little bit to the community,” he said. “I’m not sure we’ve had a big increase in tax revenue. I think it’s really for the people passing through. A lot of people stay at the hotels and have a drink, when before they might not have stopped. It encourages people to stop along the way and spend the night. That is a huge benefit.”
“We still have a lot of teetotalers,” he said. “Legalizing alcohol sales didn’t start people drinking more. It just makes it more convenient for those who do.”
Deck said she expects a study to eventually be done on the full economic impact going wet has had on Benton County and other counties in the state, but she is not sure when that will be.
The September/October 2015 cover story of AMP — The Power of Business focuses on the state’s locally produced alcohol industries. Click to read more about the state’s beer, wine and spirits industries.