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| Liquor Tax |
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The City receives from the State a portion of the surcharge on all liquor
sales. The past year has seen significant growth in liquor sales and profits.
Increased liquor tax revenue is attributed to increased population, growth in
premium liquor sales, and the counter cyclical nature of liquor sales.
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| Fiscal
Year |
1998a |
1999a |
2000a |
2001a |
2002a |
2003b |
2003p |
2004p |
2005p |
2006p |
2007p |
| $ Qtrly
Rev. |
740 |
849 |
958 |
1,266 |
1,196 |
1,180 |
1,233 |
1,292 |
1,330 |
1,370 |
1,411 |
| $ Adj.
Rev. |
56 |
243 |
156 |
93 |
242 |
100 |
150 |
150 |
150 |
150 |
150 |
| $ Total
Revenue |
796 |
1,092 |
1,114 |
1,359 |
1,438 |
1,280 |
1,383 |
1,442 |
1,480 |
1,520 |
1,561 |
| % Change |
-9.5% |
37.2% |
1.9% |
18.1% |
5.8% |
-11.0% |
-3.9% |
4.3% |
2.7% |
2.7% |
2.7% |
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| Historical Events |
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In March 1998, due to increased demand for premium liquors, the
Dispensary began offering a larger variety of liquors in the stores and special
ordering requested liquors. This policy change to meet the shift in demand
resulted in a substantial increase in the Dispensary's need for working
capital. Therefore, there was a dramatic decrease in distributions to cities
and counties.
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Increased liquor sales of 5.2% over 1998, coupled with the leveling of working
capital needs for the Dispensary, resulted in the significant distribution
increase in 1999.
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The New Year�s Millennium celebration resulted in the strongest
sales in the history of the State Dispensary. This benefited the City with
increased distributions of 18.1% in 2001 over 2000.
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| Projection/Assumptions |
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The State Liquor Dispensary distributes funds quarterly in level installments,
subject to adjustments. Additional installments may be made as the state
reviews actual and anticipated liquor sales, usually at the end of its fiscal
year.
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The FY 2003 Budget amount of $1.28 million was estimated two years
ago and assumed slower sales growth due to an economic turnaround and the
counter cyclical effect of liquor sales. The economy did turn around as
projected. Although the economy brightened, sales remained very strong
primarily due to premium liquor sales.
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The formula includes a base payment (fixed, quarterly payment based on prior
year net sales) and an excess payment (end of state�s fiscal year based on
current year net sales and projections). The actual base payment from the State
Liquor Dispensary for FY 2003 increased 4.1% from FY 2002. However, the excess
payment is projected to be $150,000 (less than the FY 2002 payment of
$242,003).
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For the City�s FY 2004/05, the projections assume a base increase
of 4% in the state�s FY 2004, 3% in FY 2005, and an excess payment of $150,000.
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Threats/Opportunities
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Counter cyclical effects of economic changes have historically resulted in
higher liquor sales in economic downturns.
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Opening of two additional dispensaries in FY 2004 (Boise and Meridian), as
planned by the State.
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