Effect of New York State Clean Indoor Air Law on Employment, Alcohol Excise Tax Collections and Number of Alcohol Servin

1. Effect of New York State Clean Indoor Air Law on Employment, Alcohol Excise Tax Collections and Number of Alcohol Serving Establishments SRNT Annual Meeting Scottsdale, AZ February, 2004

2. Background The amended New York State Clean Indoor Air Act went into effect on July 24th, 2003 The new regulations prohibit smoking in indoor public places including bars and restaurants This new statewide law replaced a patchwork of county-level smoking regulations

3. Rationale and Objective The main argument against the law is that it will cause lost jobs and tax revenue, although these claims are largely unsubstantiated. To use objective measures to assess the economic state of the bar and industry in New York State since the new indoor smoking rules went into effect on July 24th, 2003

4. Sources of Data to Evaluate the Impact of the New York State Clean Indoor Air Law Amount of alcohol excise tax revenue collected monthly by New York State Number of retail liquor licenses in effect in New York State Employment in the bar and restaurant industry in New York State

5. Alcohol Tax Revenue Data is from the New York State Office of Tax Policy Analysis From January through June of 2003 the alcohol tax revenue increased 1.7% compared to the same period in 2002 From August through December, after the implementation of the Clean Indoor Air Law in July, the increase was 3.3% compared to 2002 This increase was despite a decrease in the beer tax on 9/1/03 from 12.5 cents to 11 cents per gallon Alcohol excise taxes increased in 4 of the 5 months after the law took effect compared to the same month in 2002 (see next 7 slides)

6. August to December Total Collections for Alcoholic Beverages, NYS, 1997-2003

8. August Tax Collections for Alcoholic Beverages, NYS, 1996-2003

9. September Tax Collections for Alcoholic Beverages, NYS, 1996-2003

10. October Tax Collections for Alcoholic Beverages, NYS, 1996-2003

11. November Tax Collections for Alcoholic Beverages, NYS, 1996-2003

12. December Tax Collections for Alcoholic Beverages, NYS, 1996-2003

13. Retail Liquor Licenses Data is from the Division of Alcoholic Beverage Control of the New York State Liquor Authority for 3 reporting regions There are more bars in NYS now than before the law took effect (see next 2 slides)

16. Current Employment Statistics Data is from the New York State Department of Labor Current Employment Statistics (CES) Survey This is a survey of over 18,000 New York State businesses that uses probability sampling methodology It provides the most up-to-date employment estimates available by industry Per capita employment increased every month after the law compared to the same month in 2002 (see next 2 slides)

19. Due to seasonal fluctuations, employment in the food services and drinking places industry declines from June to December This decline was not any greater in 2003 compared to the previous 3 years despite the implementation of the new smoking regulations (see next slide)

21. Limitations Alcohol tax collections include liquor stores in addition to bar and restaurant sales Labor statistics shown here are from a sample of 18,000 New York businesses. Census statistics are available 6-9 months later. Doesn’t address experience in subsets of businesses, but does address aggregate situation

22. Strengths The data presented is objective and not subject to significant bias

23. Conclusions This data suggests a positive overall trend in the bar and restaurant industry in New York State since the implementation of the new Clean Indoor Air Law While these data do not rule out the possibility that a given business may be adversely affected by the new smoking rules there is no evidence that the industry as a whole has been economically harmed

24. Acknowledgements This study was supported by the following: Flight Attendant Medical Research Institute New York State Department of Health