BLAINE, Minn. – (March 2, 2016) – Fiscal responsibility is a popular phrase among politicians. Exactly what they means, however, can be different to everyone. Cities look for ways to raise their tax base or streamline city services, all while trying to keep the cost of living in their city competitive. In some cities however, property taxes can decrease when people buy beer. Spring Lake Park and Lexington are two of those cities. There are 210 cities across the state that operate municipal liquor stores to help offset some of these costs.
And that means that residents of Spring Lake Park save money on their property taxes every single year. But, making that $75,000 isn’t a small task. Full time and part time employees work year round for that profit, and that profit is only a sliver of their total sales.
“Its anywhere between 2.3 and 2.6 million,” said Central Park Liquors manager, Joyce Swenson.
“Current sales are $3 million,” said Lexington Liquors manager Jack Borgen. “We average $140,000 to $150,000 a year in profit.”
Their gross sales still have to pay for the building, their overhead, their product, and all of their staff. And, after that, their remaining profits are what can make a difference to the tax payer.
“A liquor store, if it’s can help you offset general your fund – the amount of money that you collect from property tax owners,” said Lexington city administrator Bill Petracek.
And operating a city isn’t cheap.
“You’re looking at police, fire protection, public works – all these different services that a local government would provide to a community,” said Petracek.
“Our city budget is about $4 million on an annual basis,” said Buchholtz. “Half of it funds public safety, so police and fire and code enforcement, and then the rest of it funds everything from street maintenance to our recreation department, and our parks, and also general administration.”
The majority of those millions of dollars come straight from property owners.
“About 75 percent of it comes from property taxes,” said Buchholtz.
Especially in small cities, they are always looking for ways to shift the tax burden off the homeowners, and this one way some cities are doing just that.
Both Spring Lake Park and Lexington have concerns that the growing warehouse liquor model could limit liquor store profits in the future, but for now, they see their stores as a good thing.
“Your pouring your profits back into the community,” said Buchholtz.
