Wet vs dry? It’s a question civic leaders in middle America have wrestled with since the national prohibition against the sale of alcohol ended in 1933.
For rural Kentucky towns, economic development can be tough to come by. Decreasing population and economic reduction hinder small communities everywhere. Pendleton County, a Northern Kentucky county south of Campbell County, is experiencing some of the these problems.
A creative way for counties to create a new source of revenue is to allowing alcohol sales within the borders.
By remaining dry or moist, rural counties like Pendleton risk potentially losing out on valuable tax and regulatory fee revenue to wet bordering countries such as Kenton and Campbell.
When current Pendleton County Fiscal County District 2 Magistrate Joshua Plummer ran for the position in 2016, he was a public advocate for making the sale of alcohol legal in Pendleton County. In 2020, he decided to take matters into his own hands.
“When counties or cities vote to go wet, the fee that they collect is not taxed. It’s a regulatory fee. That collected money from alcohol sales goes to law enforcement,” Plummer said. “When I threw my hat in for magistrate, because I’ve been in retail sales, I was always thinking of what are some creative forms of revenue we can think of. There were many people who contacted me that told me if you win, please try to do something to aid local law enforcement to combat the opioid epidemic. This was a creative way I thought could benefit the county and help out our local law enforcement.”
The regulatory fees collected from packaged liquor and beer and wine sales would directly go to the Pendleton County Sheriff’s Office. The collected money can only go toward funding law enforcement. This money can be used to hire more staff, acquire new vehicles and provide wider law enforcement coverage to the county.
Plummer filed a petition with the county clerk on March 17, 2020 in order to get the measure on the ballot for the 2020 election. The required amount of signatures he needed to gather was a quarter of the voting body in the previous election. The petition could be open for four months.
Plummer set out on his journey by setting up petition books in high foot traffic businesses throughout the county. In the north end of the county, books were stationed at Butler Shell Food Mart, Tim’s Kitchen and the Butler Market. In the southern end of the county, books were stationed at the Falmouth Shell Station, El Paso Mexican Restaurant, Smoking Pig Tavern and Two Rivers Pizza, all located in Falmouth.
“If you could walk in and they were willing to have a petition book in there, I had them,” Plummer said.
Two weeks before the petition deadline was due, something out of the ordinary happened. Three of the petition books located at the Butler Shell Food Mart, Two Rivers Pizza and El Paso were stolen. This left Plummer in a precarious situation. The stolen petition books left him missing a majority of the original signatures.
With the deadline swiftly approaching, he needed to act fast. He took a two week vacation from work and hastily began recruiting volunteers. The other three county Magistrates, Rick Mineer, Darrin Gregg and Alan Whaley, along with County Judge/Executive David Fields, and an army of other local volunteers spread out across the county to make up the gap left by the stolen petition books.
“Every single day, that’s all I did was chase signatures,” Plummer said.
He attended every local sporting event in that two week span to gather as many signatures as he possibly could.
“We made it by the skin of our nose,” Plummer said.
Amazingly, Plummer and his volunteers beat the threshold by 11 signatures. The measure was officially put on the ballot for the 2020 election.
“There were a lot of people that felt like if you bring extra alcohol into the county, you are going to make it a worse place,” Plummer said. “You’re going to put more drunk drivers on the road. I got some major backlash over this. I always tried to use logic when talking to people. No matter what, I think people were going to buy it. It just depends on when their access is.”
On Election Day 2020, the citizens of Pendleton County overwhelmingly voted in favor of allowing alcohol sales throughout the county. The vote split was 4,705 yays to 1,946 nays.
In counties such as Kenton, Campbell and Boone, the ability to hire government positions can often be taken for granted. Due to having less economic output and further commutes for administrative workers than counties with larger populations, it can be challenging for rural counties to hire people for positions such as an Alcohol Administrator.
When dry or moist counties in Kentucky vote to go wet, the Judge/Executive carves out a position for a county Alcohol Administrator. However, Pendleton County did not yet have the ability to hire a person for the new role. As Plummer explained, the responsibility is assumed by the county judge/executive.
Hypothetically speaking, if someone who lives in the Butler vicinity wants to purchase alcohol, they are more than likely not going to drive south to Falmouth. The closest liquor store in proximity to Butler is South Campbell Liquors next to Brinkman’s Gas Station and Dollar General off of US 27. The store entertains business from residents of northern Pendleton County.
So far, the county has collected between $2,000 and $3,000 in regulatory fees. Once the regulatory fee money is collected, it doesn’t go into a general fund. The alcohol administrator, or in this case the judge/executive, must fill out documentation delegating out the money, document when the money came in, and identify what their intention of usage is.
Falmouth has their own Alcohol Administrator. Their licenses in city limits, such as the CVS Pharmacy in town, produce income which the Falmouth City Council can use on the Falmouth Police Department.
Originally, the City of Butler didn’t have an ordinance to collect the regulatory tax. In response to the vote, Butler developed an ordinance allowing them to keep the regulatory tax for businesses within their annexing district.
Butler collects their own money now that they have a citywide ordinance. Their money will go toward funding their constables or their lone police officer, Kenny Hale.
At the moment, the majority of money collected in the county’s jurisdiction comes from the Shell Food Mart off US 27 in the Butler area.
“It was great for both the City of Butler and Pendleton County because it allows the county to be more prosperous and gain new revenue. It creates more income for local businesses such as the Kentucky Millstone and gives other small businesses a better chance to thrive in a diverse local economy,” Butler City Councilman Mason Taylor said.
Lori Himmelsbach, owner of the Kentucky Millstone in Butler, gives a nuanced view of the legislative change. She says her small business hasn’t seen an increase in foot traffic due to the allowance of alcohol sales, but it has given her business the opportunity to offer creative experiences that add to overall customer satisfaction.
“We did get an alcohol license to serve wine, beer and alcohol, but I don’t believe it’s impacted our business. I don’t think we make enough money to justify the license, but we do have it so that people are able to enjoy their time with us,” Himmelsbach said. “We made a decision to allow our customers a better experience. We teach an Introduction to Pasta class and it allows guests to enjoy wine with the class. They can also enjoy a beer with their pizza.”
The first applications for licenses started coming in February 2020. The first license to sell packaged beer and wine was granted to the Butler Market.
The county is able to grant an unlimited amount of packaged beer and wine licenses. However, there are different rules for packaged liquor. Liquor licenses are granted on a population per capita basis. Kentucky state law indicates a county can only have one liquor store per 2,400 residents. Pendleton County has a population of 14,600. Therefore, the county has a total of six liquor licenses that can be distributed. Currently, there is only one available license left.
The new measure blanketed the entire county. Previously, Pendleton County was considered “moist.” This means that while the unincorporated county was considered dry, the City of Falmouth was considered wet because the municipality had its own set of laws pertaining to the sale of alcohol.
Kentucky state law also has a carveout that grants special liquor licenses to golf courses and small farm wineries. For example, Pendleton Hills Country Club was able to sell liquor because it had a special license from the state of Kentucky. Before the county went wet, they did not need to have a liquor license from Pendleton County.
Strategic economic development is how Pendleton County leader’s plan to capitalize on alcohol sales. Pendleton County is a bedroom community, which is defined as a place where a population of people live, but don’t work. County leaders hope to find a way to keep a portion of residents’ leisure-related spending such as dining out within the county borders in the future.
“The future economic development of our county is drastically important. For one, we need revenue in order to operate on,” Plummer said. “By staying as a dry or moist county, we limited the interest of future restaurants, grocery stores, and convenience stores from doing business in our county because the profitability from alcohol is big. It’s a sales driver. It gives businesses the ability to add to their bottom line. It gives their employees the ability to get pay raises and the ability to offer better customer service because they’re able to hire more employees so they aren’t short handed.”
Plummer said years ago the previous ownership of the California Market grocery store were looking to open a location in the Butler area. Ownership ultimately decided against it. One of the primary reasons factoring into the decision was due to Pendleton County previously being a moist county. The original California Market, located along the AA Highway in southeastern Campbell County, does sell beer and wine.
Plummer says he’s been contacted by multiple people intrigued about the economic viability of developing a business in northern Pendleton County since the county has gone wet.
A dine-in restaurant, such as a burger or pizza restaurant located along US 27, has the potential to do well. The proprietors could capture commuters traveling back into Pendleton County from Northern Kentucky. They could also potentially keep more diners within county limits.
“I truly think it’s going to take about five years for people to notice a true impact. It didn’t happen overnight. Here we are, a year after there’s only been $3,000 collected. It’s going to take some time,” Plummer said. “The way we do economic development has to be strategic.”
The strategic areas of growth are projected to be at the northern end of the county, primarily where southern Campbell County merges into northern Pendleton County. This would include along US 27 and a 9 mile stretch along the AA Highway. These are the areas county leaders project to have the most potential for economic growth. County leaders want to be prepared to accommodate people who are relocating from suburbanized areas into northern Pendleton County and southern Campbell County.
