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Dry Counties Left Thirsty For Revenue

By Ryan Jackson

For most Americans the idea of not being able to go to a store and purchase alcohol seems very foreign. 

However, the idea is not foreign to many Arkansas residents as dry counties are very prevalent in the state. Nearly half of Arkansas’ counties are dry, 34 out of 75 counties. 

Not having access to purchasing alcohol forces citizens of dry counties to have to drive across state or county lines in order to make a purchase. This is not only costly for the citizens wishing to buy alcohol, but to the counties, which are missing out on commerce, and tax revenue by prohibiting the sale of alcohol.

Some may wonder why dry counties even exist. 

The answer to that is often explained in economic terms as a “bootleggers and Baptists” scenario. In this scenario, the opposition of a county converting from dry to “wet” status, is not only from the Baptists who oppose the sale of alcohol for religious purposes, but also from the bootleggers who profit off of bootlegging alcohol into the dry county from wet counties that sell alcohol. 

Bootleggers aren’t as common as they were in the past, so the bootleggers in a modern scenario are “county line” liquor stores in neighboring wet counties. 

In UCA Assistant Professor of Economics and ACRE Scholar Dr. Jeremy Horpedahl’s recently-published paper “Bootleggers, Baptists, and Ballots: Coalitions in Arkansas’ alcohol-legalization elections”  in Public Choice he explained that the political coalitions against  the legalization of alcohol in dry counties are often formed by liquor stores in bordering wet counties as well as churches and other religious organizations. He explains the funding used by these coalitions comes mostly from the liquor stores, while the churches and religious organizations primarily contribute to the coalitions in non-monetary forms. 

A coalition composed of liquor stores and churches, fighting for a common cause may sound surprising to some, however the economic effects of dry counties may be even more surprising. In a 2014 study by the University of Arkansas Department of Economics, the authors estimated that in 2013 total alcohol sales in Faulkner County would have amounted to nearly $30 million and would have generated over $100,000 in sales tax revenue, had Faulkner been a wet county. While these revenues are significant, they would be even larger in 2020 due to the growth in population of Faulkner County since 2013. 

The tax revenue that could be generated by alcohol sales in Faulkner county could go directly back into the community, yet as long as Faulkner County remains dry, its residents will never see those potential tax revenues, and the same argument can be made for dry counties across the entire state.