COLUMBIA — Owners of bars and restaurants in Columbia have experienced their first decline in sales growth in six years, according to a recent report from the City of Columbia.
From January to July, sales tax revenue generated by dining businesses fell 1.2 percent compared to the first seven months of previous year. Revenue during the same period grew 10 percent from 2005 to 2006.
All public places went smoke-free on Jan. 9 following a close vote by the City Council. Many local businesses owners have claimed the ban has hurt their business, and the recent sales tax data show that sales have generally fallen.
A decrease can be seen every month this year except for April, when $182,090 was collected — a $2,805 increase from 2006. In January, by contrast, $154,892 was collected — a $7,068 drop from last year.
The city’s sales tax rate is 2 percent. The total sales tax rate of 7.55 percent includes county and state taxes.
Joel Thiel, owner of Otto’s Corner Bar and Grill, said he has seen a loss of 33 percent in sales since the ban was implemented. He said the smoking ban is affecting businesses like his more than others because the bar’s location doesn’t let him offer customers an outdoor patio or make other accommodations smokers.
“Places that don’t have patios have seen their sales drop and several places have gone out of business,” Thiel said.
Quinton’s Bar & Deli, on South Ninth Street, is undergoing an expansion that includes the addition of a double-decker outdoor patio.
Karen Krone, owner of Snapper’s and KLiK’s, agrees that special accommodations for her smoking patrons are necessary. This spring she plans to open a patio at KLiK’s.
“You have to have a patio to survive,” she said.
Mayor Darwin Hindman, a longtime proponent of the ban, said blaming the ban as the only driver of declining sales is unfair. Other factors could contribute to the fall in sales tax revenue, he said.
“There are too many variables to make the assumption that the smoking ban is the main factor,” he said.
Michael Pakko, an economist and researcher with the Federal Reserve in St. Louis, said he thinks smoking bans are unnecessary.
“Whenever you pass a law forcing people to do something, the people are economically worse off,” he said.
Pakko said it’s better for the marketplace when businesses can elect to go smoke-free.
Such was the case in Columbia prior to 2007. Jack’s Gourmet Restaurant and Flat Branch Pub & Brewing both chose to prohibit smoking years before the citywide ban was passed. Flat Branch implemented its smoke-free environment in May 2005, and Jack’s restricted smoking in June 2001.
Lance Wood, the general manager of Flat Branch, said the restaurant and micro-brewery banned smoking because an overwhelming amount of their clients requested it. He said Flat Branch has not seen a change in sales since Columbia’s ban.
Ken Applegate, owner of Jack’s, decided to go smoke-free when the restaurant reopened after a fire damaged the building in early 2001.
“Customers were happy with the smoke-free policy,” he said. “Some were upset by it and didn’t bother to come back. But then again it also brought new customers because the place had a nice feel to it.”
Smoking bans have been a topic of discussion across the country for years. Many who support the bans say the health benefits associated with eliminating second-hand smoke from public places justify them.
Hindman, a self-described “huge advocate of keeping a healthy population,” said the smoking ban is a tremendous step forward in improving public health.
“Especially in a college town where there are a lot of young people heavily involved in service-type jobs such as restaurants, it seems unbelievable that they can be subjected to air quality that can do harm to them.” Hindman said.
However, such arguments do not impress Pakko.
“If second-hand smoke is a concern, it should be up to individual businesses whether they change their policy or not,” Pakko said.
Smoking bans have become increasingly common in the United States. In 1990, San Luis Obispo, Calif., became the first city in the world to ban smoking at all indoor public places. In 2003, New York implemented a state law banning smoking in almost all indoor work and public places. The ban, along with an increase in cigarette tax and a media campaign, decreased the number of adults who smoke in New York City by 11 percent, making 140,000 fewer smokers in this region, according to a online fact-sheet from the Centers for Disease Control and Prevention.
The CDC also reported that restaurant and bar revenues in New York City increased by about 9 percent from 2003 to 2004, the year following the ban.
On 2003, Maryville became the first city in Missouri to ban smoking. The Missouri Department of Health and Senior Services commissioned an economic analysis of the ban, which showed it had a positive economic effect on both restaurant and bars. Anti-smoking activists cite this case as evidence that smoking bans do not hurt businesses.
Pakko disagrees with the study’s findings. While he agrees that restaurants are generally not affected by such bans, he thinks research confirms that bars see decreases in business.
“Those who cater to smokers are the ones who hurt the most,” he said.
In many cities, smoking bans have been implemented but later repealed. In Columbia, the ban was originally passed in a 4-3 vote by the City Council. Hindman has no regrets on having the council decide the issue without a public vote.
“It is our job to vote on these issues,” he said. “If people do not agree then they can petition and move it to a vote of the people.”
For months, Thiel of Otto’s and Betty Hamilton, owner of the Tiger Club, have been leading an effort to collect signatures to repeal the ban. They have the more than the 2,500 signatures they need and plan to soon take them to the county clerk to have them certified.
If enough signatures are from registered voters, the issue could go to a public vote.