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Would You Object to Smoking Licenses?

Here's a proposal to increase economic activity in the state while maintaining the benefits of the smoking ban.

The statewide smoking ban took effect just a little over a year ago on May 1, 2010. Some argue that it has been successful, while others argue that it has been detrimental. Regardless of which side of the debate you fall on, I have a suggestion that most should find appealing. I propose that the state allow smoking licenses for bars, similar to liquor licenses. This proposal will not negate the benefits realized from the ban, and it will provide an economic and revenue boost that will help the state and local governments. 

The details of my proposal are flexible, as this is just a starting point that is not yet based on thorough analysis of all of the possible consequences. If anyone has an objection to any part of my proposal, please do not hesitate to raise such concerns. I by no means feel what I’ve outlined below is perfect.

The details are as follows:

  • Licenses shall be apportioned on the township and municipal level, based on population.
  • Every township and city shall receive one license, with an additional license being apportioned for every 10,000 residents.
  • Licenses shall be sold to establishments based on an auction system.
  • Licenses will expire every two years, at which point another auction will occur.
  • To qualify for the auction, establishments must receive at least 60 percent of their revenue from alcohol sales.
  • The auction will be a silent auction, with all qualifying establishments being able to submit whatever bid they would like to pay for the license, without knowledge of the other bids.
  • If multiple licenses are allocated to the same township or city, all licenses will be sold during the same auction. If there are multiple licenses, the top bidders in the silent auction will be awarded the licenses at the price of the lowest winning bid. For example, if there are two licenses, and top bid is $40,000, and the next top bid is $30,000, both establishments will receive the license at the cost of $30,000.
  • Half of the revenue generated from the auction will go to the state education fund, while the other half will go to the local township or city.
  • Establishments that receive the licenses must have top-of-the-line smoke mitigation systems in place.

If this proposal took effect, the vast majority of establishments would remain smoke-free, so those who favor the smoking ban would still have numerous options of where to frequent. The goal of the proposal though is to help maximize economic activity, and with the ban currently in place, there are residents who prefer to stay home rather than go out. If those residents were provided a single option of a bar at which they could smoke, they would take it.

For the business owners, this proposal should be preferable to the status quo. The auction system means that bars that receive a license will not have an unfair competitive advantage over other bars, as the cost of the license should even things out. Plus, the places that get the licenses will most likely lose their nonsmoking clientele in return for gaining customers who want to smoke. Those nonsmoking clientele will then spend their money at the nonsmoking bars.

I would love to hear any feedback that you may have. I have never been a smoker, and would not go to a bar that received a smoking license, but I know many individuals who would. And so I’m willing to give up a few of my options if that results in greater economic activity for the state.

If you’re a nonsmoker, would you object to a few establishments being able to allow their customers to smoke, if the majority of bars (and all restaurants, bowling alleys, other venues, etc) were still smoke-free?

If you are a smoker, would having a few locations that allow smoking result in you going out more often? If you are a business owner, would you fight against this proposal, or welcome it? I welcome all comments and criticisms.

Jen Schilens May 16, 2011 at 05:41 pm
I am a non-smoker, but it should be up to an individual if they want to smoke or not. I think having a smoking license is a great idea. Although, as a non-smoker, I probably would not be a customer of places that hold the smoking license.
Kelly May 16, 2011 at 06:03 pm
I am not a smoker but would rather see them reverse the law for ALL. Not JUST the one successful business who can afford to pay the license via another tax. If it's your business and you prefer to make it all a nonsmoking establishment or a full smoking place then it is the publics choice to go there or not. I think the state is regretting their intrusiveness now due to a lack of incoming money due to less taxable revenue. They only hurt business' at a time they could ill afford to be hit frm another direction. I highly doubt nonsmokers are rushing out in droves to fuel once smoking establishments.
Angela May 16, 2011 at 06:58 pm
Private property should not be treated as public property. Business owners shouldn't need a license to allow adults to smoke on private property. Non-smokers have every right to choose non-smoking establishments, but that's where their rights end.
Ann May 16, 2011 at 07:19 pm
I am not against regulating the places where smoking takes place, but special licensing is going too far. As a nonsmoker I appreciate that I can go to most places and not have to inhale second-hand smoke. While it seems to make sense to allow smoking at bars and nightclubs, I think nonsmoking establishments should be the norm. Perhaps the Michigan law could be amended to have a few exceptions such as bars and nightclubs. Licensing, though, is too obtrusive and susceptible to corruption in my opinion.
Janet May 17, 2011 at 02:23 am
I was happy beyond words when the smoking ban went into effect, because I knew that for the first time ever I could patronize any business establishment without dread of encountering the residual effects of smoking.
Since the ban became law, my husband and I have greatly broadened the range of places we go for meals and entertainment. We're spreading our money around to any number of places that would never have gotten our business before. Obviously we're just two people, but I suspect that there must be others like us. If smoking is re-instituted at any of our new "favorite" locations we will no longer visit there and neither will others who feel the same way. As far as smokers having the "right" to smoke around me in public, it's my understanding that your rights end where mine begin, and I have the "right" to breathe unadulterated air.
Jordan Genso May 17, 2011 at 11:28 am
Kelly- I understand your position is one side of the debate, but I don't expect the state to reverse the entire ban, as I don't believe there is strong public support for such action. As for the impact so far, I have not seen a consensus, with some stats indicating overall revenues are up (I believe), while some specific revenue generators are down (keno sales, etc). So my question for you is: if the economic impact is actually beneficial, rather than negative as you argue, would that change your position on the ban (or will you be against the ban regardless of the impact)? And while my proposal does not result in a total elimination of the ban, which is what you would like, would you prefer my proposal over the status quo?
Jordan Genso May 17, 2011 at 11:42 am
Angela- Is there any limitation to your argument, or do you take the position that private businesses should never be forced to ban smoking in their establishments? So office buildings, daycare centers, hospitals, movie theaters, etc should all have the option to allow smoking? Or do you agree with banning it in some types of locations, and the difference between us is where we draw the line?
This isn't meant as snark, as I know that there is a philosophical argument that supports always allowing the free market to determine the results. If you ascribe to that philosohpy, I hope that you don't take challenges to the philosophy as a personal attack. And my default position is to trust the free market, but when the free market results in sub-optimal consequences, I understand that government does have a role to play in protecting the people.
Jordan Genso May 17, 2011 at 11:44 am
Ann- I reached my proposal by beginning at your position, thinking that there should be some exemptions in order to give smokers a choice, and trying to think of a fair way in which to give those exemptions. If you don't like licensing (do you feel the same way about liquor licenses?) because there is opportunity for corruption, how would you go about creating a system that results in non-smoking being the norm, with only a few exceptions? I think you and I have a similar goal, although I also have a second goal of trying to raise revenue for schools and local municipalities at a time when their budgets are being slashed, and my proposal is my best attempt at achieving those goals.
Ann May 17, 2011 at 01:47 pm
I think your idea has merit. I am all for making a positive come out of a negative. Generating more revenue for our schools and local govenments by charging fees and taxes on bad habits such as smoking, drinking or gambling is not the problem, but the politics involved in getting licensed is what causes the corruption. Those who have the money and connections are the winners. Also, just because the state says the money will be used only for k--12 public education, doesn't mean that's what will happen. Have you been following politics in our state recently? Don't we already have a system of non-smoking being the norm with few exceptions like at casinos?
DougPete May 20, 2011 at 07:22 pm
As a Libertarian-leaning guy, why do you advocate smoking licensing at all, Jordan? Why not let the free market sort out the whole issue? Some bars and office buildings would end up being smoke-free and others would allow it. What's wrong with that? Patrons would decide where they want to eat/drink, employees would decide where they want to work. The same would be true for businesses.
The current law is ludicrous. Cigarette smokers can't smoke in a cigar bar? You can only smoke a cigar that costs more than a dollar in a cigar bar (or something like that, I read it once a year ago). Why can't smokers smoke in open air patios at establishments? Now you want to sell licenses so people can do what they want on their OWN PROPERTY? How is that different from extortion? Liquor licenses, common for decades, are also bizarre. Do you have any idea the shenanigans that go on under the radar to get liquor licenses where politicians/city officials want them to be? It's highly political in the long run and now you want to push smoking licenses into that same category? Harumph. Property owners should be able to do what THEY want to do on their OWN property. As it stands now, a guy owning 40 acres who has a one-man business in a 100 sq. ft. office in the center of it cannot smoke in it. That's crazy and a good example of government tyranny. You can argue that it's "healthy," but too often governments use that "we know better than you" excuse to limit the rights of their citizens.
Jordan Genso May 21, 2011 at 03:07 pm
Thanks for the comment DougPete. I'm libertarian when it comes to personal freedoms, which is why I favor a situation where smokers have an option. In terms of business/consumer relations, I support the free market up to the point where the consumers are harmed, at which point I feel the government has a role to play in protecting the people. We had the free market "solution" in regards to smoking policy at restaurants/bars/etc for countless years leading up to the ban, and the result was not optimal as non-smokers were not provided a proportional number of non-smoking establishment options.
You state that the free market would result in some bars being smoke-free, but I would need a convincing argument to persuade me to agree, since prior to 5/1/10 your statement would not accurately describe most regions in Michigan. You are advocating pre-5/1/10 policy, yet you state that the outcome would be different than the pre-5/1/10 results. How? Why? I agree that certain aspects of the smoking ban are less than ideal (such as your cigar bar example), which is why I'm trying to find a solution that both sides can agree with. I can empathize with your side, and feel that the status quo is not much of a compromise, but what you are advocating is just as non-compromising as the status quo, just favoring your side.
Jordan Genso May 21, 2011 at 03:21 pm
I understand the idea that people should be able to do what they want with their "OWN PROPERTY", except that such an idea has to have limits if we are to live in a society with other people. Building permits, zoning regulations, equal rights protections are justified because none of us live in a manner that does not impact others.
A big story in last year's campaign was Sen. Rand Paul semi-arguing that businesses should be allowed to have "No Blacks" signs in their windows if they want, as it is their business, so the government should not be able to tell them what to do with their "OWN PROPERTY". He argued that such business owners would obviously be immoral, but that the government should not limit their freedom to discriminate. In reality though, the government is justified in limiting business owners' freedoms in regards to discrimination (if you need me to explain why, I can). Now there is a difference between banning discrimination and banning smoking, but I bring up the former to show that your argument is not automatically correct. Such a position should be the default, up to the point where it can be shown to have an actual negative impact on others, which advocates of the smoking ban have said there is. In regards to liquor licenses, I would strongly support reforming the system to eliminate corruption. And corruption does not have to be an inherent part of licensing.
jp-patchguy May 23, 2011 at 10:19 am
The ban was put in place to protect not just patrons but employees as well. It would be silly to allow manufacturers to buy a license to operate at lower safety standards then their competitors. The same is true here. From an economic standpoint, it would be a disaster, as you would create an unfair advantage for both types of business. Your idea would backfire when non-smoking bars loose even more business because of the one bar in town where smokers could go. I don't think it would work, and I think it is counter intuitive to the whole point of the law in the first place. I think it's a good law.
julie Hine July 6, 2011 at 10:48 am
No one is factoring in the HUGE economic costs for this suicidal behavior. The basic medications for COPD and emphysema cost hundreds of dollars per month. If every smoker would be denied access to treament unless he could pay for it himself, then we could talk about "personal freedom". But right now the taxpayers are drowning in expenses incurred by self-destructive behaviors of all kinds. Children and adults afflicted with asthma and those in the midst of treatment for a large variety of medical conditions are all affected by air quality. Smoking takes money from everyones pocket.
Jordan Genso August 14, 2011 at 12:51 am
And that is the justification used for seatbelt laws. While your lack of wearing a seatbelt should not directly affect anyone else, it does indirectly affect others through higher insurance costs. Smoking too causes increased insurance costs for non-smokers.
But I would not support banning all cigarette use. I may place more value on personal freedom than you, which is not to say that I am right and you are wrong. It's a difference of opinion, and the law should be based on popular vote. If democracy led to cigarettes being banned, I don't think that would be outside the government's authority (although I'd vote on not banning them), as they do have the power to ban things that a majority want as long as it doesn't take away the Constitutional rights of others. That's why medical marijuana users and providers should stop being targeted by law enforcement officers. The democratic process resulted in a majority of citizens feeling that medical marijuana should be legal, and there is nothing inherently wrong with medical marijuana- it is people that decide whether it should be more or less legal than other substances like tobacco or heroin. So the government should respect the will of the people. Sorry about the tangent. Your point is very well taken, as I look at it once again. You are correct that cigarette use in public does more than just indirectly affect others- it directly affects the people that you noted like those with asthma. That's a well-presented position.

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