Clay County (Hayesville, NC) hopes alcohol will mean revenue

From Lake Chatuge on the state line between Hiawassee, GA and Hayesville, NC

By Jon Ostendorff • Asheville Citizen – Times | August 22, 2009 12:15 AM

HAYESVILLE — People pushing to approve alcohol sales in Clay County promoted the change as a way to make money in tight times, and few could have made a better argument than Bert Wiley.

The retired Presbyterian minister says he has never had a drink, but he sided with a majority of voters in a referendum this week on allowing the sale of beer, wine and liquor.

“The county needed the revenue,” said Wiley, also a retired Western Carolina University music professor. “I know the disagreement on this. But this situation is not a moral issue. It is a financial issue.

“The people who wanted to have alcohol in the county were not trying to convince people to drink. They wanted it available in the county.”

The county government stands to make hundreds of thousands of dollars in excise revenue if trends in neighboring counties play out.

The Tuesday vote ended months of heated debate in the county of about 10,000 residents.

Those opposed created a group called Clay County Not For Sale and those for the change organized the Coalition to Keep Tax Dollars in Clay County.

Voter turnout for the referendum was more than 50 percent. The measures passed with 60 percent of the vote.

With the vote, North Carolina now has only two counties where all alcohol sales are forbidden, even in municipalities. Both — Yancey and Graham — are in the mountains.

A financial argument

Clay had been surrounded by places where alcohol sales are legal. Many residents would travel a few minutes across the state line and into Georgia to buy alcohol, leaving their money and tax revenue in another state.

They could also travel to Murphy to buy beer, wine and liquor.

Pat Margo, a local real estate agent and a supporter of changing the law, said the idea to ask for a referendum came after the county last year considered a land-transfer tax to help raise public money.

The transfer tax plan failed, he said, because it targeted only one part of the community and would have forced anyone buying or selling property to pay.

Instead, Margo said, members of the community pointed to money the county was letting leave its boundary as a way to collect more revenue.

 “Our approach was strictly from the revenue point of view,” Margo said. “We needed some additional help in the county. And with Towns County (Hiawassee, Ga.) right here, Murphy right here and Franklin, it was ridiculous to let them benefit from it.”

The good and bad

Alcohol has brought good and bad to other parts of the far west that recently approved sales.

In Franklin, which approved the sale of beer and mixed drinks in 2006, business is up, but DWI arrests in Macon County are, too.

Sheriff Robert Holland said the increase in drunken driving was partly because of the availability of alcohol but also because his office, the year before the new law, changed its traffic enforcement policy.

Deputies went from reacting to traffic law violations to proactive enforcement.

It is not uncommon for a small Sheriff’s Office to leave traffic enforcement to police in surrounding towns or the N.C. Highway Patrol. Traffic enforcement requires more training for officers and more equipment, which means more cost.

The Macon County Sheriff’s Office in 2005 had no checkpoints and netted 47 DWI arrests.

In 2008, it had 134 checkpoints and made 128 DWI arrests.

The N.C. Highway Patrol, which is responsible mainly for traffic law enforcement, also saw an increase in DWI citations in Macon County the year after the new law in Franklin.

Troopers wrote 82 tickets in 2007 compared with 60 in 2006. But the number of citations has varied in recent years.

In 2005, the year before the law changed, troopers wrote 89 tickets for drunken driving. There were 67 issued last year.

Holland said it is difficult to find the real cause of the increase.

“We have had a substantial increase in DWI, but I am not sure if it is because of the sale of alcohol or the highway safety program,” Holland said.

Clay County Sheriff Joe Shook, a former state trooper, said he doesn’t expect more arrests after the change in his county.

He said the reverse might even be true. If alcohol is available closer to home, people will spend less time on the road and have a lower chance of being stopped for drunken driving, Shook said.

The sheriff said he stayed out of the debate over changing the law.

“We are here to enforce the law,” he said “But I do not see any reason why there would be an increase in DWI.”

Economic impact

Clay County stands to take in more revenue with alcohol sales, but estimates are hard to come by.

A look at beer and wine tax and excise revenue from liquor stores in neighboring Cherokee County, which has more than twice the population, is one indication.

In 2006, the most recent year for which numbers were immediately available, the Andrews ABC store made $586,000. The board gave $10,000 to law enforcement and $3,500 to the town.

In Murphy, the ABC store made $3 million, and the board gave $90,000 to law enforcement and $128,500 to the town.

Those numbers don’t count beer and wine or mixed drinks. Andrews in 2006 got $8,000 in beer and wine tax, and Murphy got around $1,800.

Murphy’s amount increased last year after voters approved beer sales, along with mixed drinks. Previously, only wine was allowed.

Town Manager Anna Payne said Murphy got about $7,000 with beer added. The town has an annual budget of $3 million.

Liquor is marked up 39 percent in North Carolina. The N.C. Alcoholic Beverage Control Commission regulates the industry.

County and city leaders, once liquor sales are approved by voters, appoint a local ABC board to build a store and hire staff to run it.

The money ABC stores make goes to pay off debt first, and then, depending on the local board, profit is distributed locally or reserved for capital investment or both, ABC Administrator Mike Herring said.

He said a business in Clay County, such as a corporate-owned gas station that sells alcohol at some of its other locations, could start selling beer within days of the commission getting the certified election results, which usually takes a week.

Businesses new to selling alcohol would have to wait a little longer.

Herring said he hasn’t heard of plans to change the law in Yancey and Graham counties, the state’s two remaining dry communities.

Waynesville, which had long allowed beer and wine sales, last year approved mixed drinks in part to raise money. The town is the largest west of Asheville.

The idea was that liquor in bars and restaurants might attract a national chain to the area around the town’s new Walmart Supercenter on South Main Street.

So far, that hasn’t been the case.

But, Mayor Gavin Brown said, there is a simple reason for that.

“We are living in the middle of an economic tsunami,” he said.

Brown said Waynesville considered mixed drink sales as just one more offering to make the community attractive. It was never intended to be a big moneymaker.

“It is just one more decoration on the Christmas tree,” he said.

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