Extra hours didn’t boost liquor tax receipts. Will lower prices? [CT Mirror]

Article as it appeared in the CT Mirror

Gov. Dannel P. Malloy’s proposal to expand liquor store hours may not provide a boost to the state’s coffers – if Connecticut’s experience with Sunday sales is an indication.

But the governor’s plan, which also hinges heavily on lowering prices and making Connecticut’s liquor market more competitive with those in neighboring states, assumes a very modest $3.3 million bump up in liquor tax receipts.

Malloy, who talked with Capitol reporters early Friday afternoon, said lowering prices would stop some Connecticut consumers from buying their liquor in neighboring states.

“I also know we are losing business to other states, and I want that money to remain in the Connecticut economy,” he said.

When the governor and legislature approved Sunday liquor sales in the spring of 2012, the $5.2 million increase in tax receipts projected for the 2012-13 fiscal year never materialized.

Malloy and lawmakers raised liquor taxes in 2011, part of an omnibus plan to close a record-setting state budget deficit. Connecticut’s annual liquor tax collections rose in response from $48.9 million to $60.6 million in the first year.

The legislature’s nonpartisan Office of Fiscal Analysis anticipated Sunday sales one year later would boost receipts close to $66 million.

But the final tally came in at $60.4 million.

And the numbers have stayed close to that mark since then.

Liquor tax collections in the 2013-14 fiscal year stood at $60.6 million.

And the last projection for this fiscal year, issued last month by the governor’s budget office and by nonpartisan legislative analysts, stood at $60.7 million.

Carroll Hughes, a lobbyist for the state’s package stores, said the administration’s new revenue growth projections are “ridiculous. The Sunday sales figures produced exactly zero. The additional hours fall into the same category.”

And the governor added that his initiative is not about raising more state revenue.

“People who don’t support this support Connecticut consumers being gouged,” Malloy said. “That’s what this is about, giving Connecticut consumers the lowest possible price.”

Senate Minority Leader Pro Tem Kevin Witkos, R-Canton, said he’s not convinced lowering price controls will help consumers in the long run. Large chains with more funding can afford to offer lower prices longer than small package stores, he said. But if those small businesses fail, and competition vanishes, large stores would be free to raise prices higherthan ever before.