Lancaster already cashing in on 'sin tax'

LANCASTER — The city of Lancaster in central Kentucky has received about $45,000 in new revenue from so called "sin taxes" a year after voters approved alcohol sales.

The Danville Advocate-Messenger reported that Lancaster expects to take in $150,000 from the 2.25 percent tax on liquor and 3.25 percent tax on alcohol by the drink by the time the fiscal year ends June 30.

Lancaster Mayor Don Rinthen says the money comes from new restaurants and stores taking advantage of the now-legal alcohol sales, but that the money was never intended to be a savior for the local economy.

"What it has really done is put us on an equal footing with surrounding areas," Rinthen said. "We had Danville go moist and Nicholasville and Richmond (are) both nearby, and we're sitting here without anything to entice restaurants and other businesses."

The vote in October 2008 was 656 to 550 in support of the move to allow alcohol sales in the Garrard County community for the first time since Prohibition.

Nathan Mick, Garrard County's economic development director, said the main objectives of ending the ban on alcohol have been met. He points to Godfather's pizza as an example of a dining option near downtown that would not have opened but for alcohol becoming legal.

"The vote was not just about alcohol sales, it was a referendum on economic development," Mick said. "Our main obstacle is that we currently don't have enough turnkey space to accommodate a lot of these restaurants, but in a down economy we are doing quite well."

While Lancaster has created a niche for itself — the rest of Kentucky to the south remains dry — other cities and counties have considered making a similar move. In the past year, similar ballot initiatives have failed in Stanford. An organized effort has emerged in Danville to loosen the city's alcohol restrictions.

But the novelty is beginning to wear off for some Lancaster businesses.

Barbara French, owner of the Quick Stop gas station on Ky. 52 in Lancaster, said for the first month or two, when her establishment was the only one selling beer, the money poured in.

"Now everyone is selling beer, so it might as well be Pepsi," French said.

Although the new revenue stream is appreciated, Rinthen said communities that consider going wet should be realistic.

"It has been good to add this to the general fund, but it is not going to save you if you are on the brink financially," Rinthen said. "We thought it would level the playing field for us and I think it has."