Sue Shaw, the owner of the Cottage Inn, a small tavern in a spot of unincorporated Sangamon County surrounded by Springfield, has been sharing a bleak message with her fellow bar owners across Illinois about the statewide indoor smoking ban, which went into effect January 1.
Shaw tells them her revenue has been down by a third since local bans went into effect for Springfield and Sangamon County on September 17, 2006. Many of her longtime customers are staying home. And she is not getting new patrons to make up for the ones she lost.
"I have not had one new non-smoking customer in the bar," Shaw says. "I'll be lucky if I own it in three years. People are actually turning their garages into bars. That's where people are going."
Shaw's story echoes what was predicted by opponents of the statewide smoking ban, which passed the General Assembly last year with comfortable majorities in both chambers, making Illinois one of 22 states that are smoke-free.
But those communities that have had smoking bans have not seen the economic devastation of lost tax revenue that was forecast by those ban opponents.
A review of tax revenue for six communities that enacted local indoor smoking bans shows that sales tax receipts didn't nosedive after the bans took effect.
In Springfield, tax revenue from bars and restaurants increased 8.3 percent in the fourth quarter of 2006, compared with the same period in 2005. Revenue increased by 7 percent, 3.2 percent and 6.6 percent in the first, second and third quarters of 2007.
In Bloomington, where the ban went into effect January 1, 2007, tax revenue from bars and restaurants increased by 8.4 percent in the first quarter of 2007. Revenue increased by 3.2 percent in the second and 6.4 percent in the third quarter. In neighboring Normal, where the ban went into effect January 1, 2007, tax revenue from bars and restaurants grew robustly — 11 percent in the first quarter, 10.2 percent in the second and 15.8 percent in the third.
In Oak Park, where the ban went into effect July 1, 2006, tax revenue increased by 1.2 percent in the third quarter and dipped 2.1 percent in the fourth. By the third quarter of 2007, revenue had increased 4.7 percent.
In Park Ridge and Wheaton, tax revenue from bars and restaurants fell slightly following the ban, then rebounded. In Park Ridge, where the ban went into effect September 3, 2006, revenue decreased by 0.5 percent in the final quarter of 2006 and 0.7 percent in the first quarter of 2007. It increased by 4.8 percent in the second quarter of 2007 and by 3.7 percent in the third.
In Wheaton, where the ban went into effect January 1, 2007, revenue dipped by 3.7 percent in the first quarter and 1.2 percent in the second, but rose by 2.5 percent in the third quarter.
Underlying that data is the fact that hospitality industry businesses are volatile and prone to failure. Tax revenue in Normal and Park Ridge dropped three quarters (Wheaton four) in 2005 when there was no smoking ban to be concerned about.
None of the data surprises Kathy Drea, the public policy director for the American Lung Association of Illinois and Greater Chicago, a group that helped lead the push for the statewide smoking ban. During the debate over local and state smoking bans, Drea often repeated the mantra that no independent studies have ever shown long-term, harmful economic effects to the bar and restaurant industries as a result of smoking bans.
"All the doom and gloom predictions do not happen," Drea says. "What we see is people adapt very quickly to smoke-free laws. There's a little bit of turmoil at first, but after a couple of months, people are happy with it, and they adapt very quickly to the point they expect everywhere they go to be smoke- free. Some of the biggest opponents say it all worked out."
Some bar owners and management, while still chafing at what they view as an unwarranted government trampling of their rights as business owners, concede that the smoking ban has not brought the financial devastation they expected. Those that offer more than a place to down a beer and light a cigarette seem to report the least harm from the smoking ban.
"It hurt us for a little bit," says Brooke Zeitler, a bartender at Maguire's Bar and Grill in downtown Bloomington. "Mainly, our regulars went outside to smoke."
But because Maguire's has a kitchen, lunch business seemed to increase. "We're really busy during the day. We get a good lunch crowd. It might have helped us."
When bars do suffer after smoking bans, those hardest hit seem to be mom-and-pop establishments such as the Cottage Inn, says Daniel Clausner, the new executive director of the Illinois Licensed Beverage Association.
"Some establishments will experience a large decline in business, while others will experience a small business decrease," he says. "Signature items and events — for example, the best cheeseburger or a great dart league — will continue to foster success in those businesses.
"Many of the ILBA members will attempt to accommodate patrons that smoke by constructing or modifying patios and beer gardens. Unfortunately, many places do not have a signature item nor the space to add or build a smoking area. It is these stablishments that business will experience the greatest decline."
Now that the ban is law, Clausner has no interest in debating the merits of it, as his predecessor Steve Riedl did. Riedl vigorously contested the notion that bars would not suffer economically because of the ban and even that secondhand smoke represented a major health hazard for which there is no safe level of exposure, as a 2006 U.S. surgeon general's report contends.
"ILBA members will abide by this law," Clausner says. Some members even had ashtray giveaway events.
Jim Stone, the director of the Sangamon County Department of Public Health, which is charged with enforcing bans in Springfield and unincorporated Sangamon County, says his office issued 31 citations in 2006 and 50 in 2007, while collecting $1,700 in fines.
The most likely violators have been businesses where the same patrons are there day after day.
"That's why we've done a few stings," Stone says. "I've personally been involved in some stings after 10:30 at night. That may have to continue. There's a couple we've had a repeat issue with."
Most fines and tickets go to businesses, not individuals, Stone says.
"We thought that might be the case. Unless you come across somebody smoking a cigarette, it's hard to go out and be there before they snuff it out.
"I do think you're going to see a lot more public awareness of the issue now that in every place it's going to be banned. We could see a spike in complaints."
Drea says she expects the statewide ban to be enforced and complied with because people complain where there is smoking.
"There are a lot of people who are very much looking forward to this law and will be expecting it to be enforced."
Of major concern still to bar owners across the state is what kind of rules related to the ban will be approved by the General Assembly's Joint Committee on Administrative Rules. In particular, they want to know how the rules will affect beer gardens and whether they will have a chance to contest fines imposed on them as a result of the ban.
JCAR, a panel of 12 lawmakers from both parties and chambers of the General Assembly that reviews and approves rules made by state agencies, rejected the proposed rules for the ban on January 9, but the law went into effect as written on New Year's Day.
JCAR had the proposed rules in hand before the ban went into effect but did not approve them because there were questions about how best to enforce the law, says Rep. John Fritchey, a Chicago Democrat.
"There's stuff statutorily that should be in there that's not," Fritchey says. "There's a strong concern that the implementation of the act follows the intent of the legislation and does no more or no less."
Issues to be settled include whether the Illinois State Police should enforce the ban, how people can contest tickets they receive, whether facilities where smoking research is conducted should be exempt and how to interpret the part of the law banning smoking 15 feet in front of the entrance of a place where smoking is banned.
For example, does a business get cited if a person is smoking under its canopy while waiting to cross the street in a snowstorm?
"There's a gray zone. I don't believe anybody intended for a private business to be liable for the actions of a private citizen who's not a patron," says Fritchey, who voted for the ban. "One would always hope common sense rules the day. But history has shown we need direction for those who show less common sense than others."
There is also no way to contest a fine under the statewide law, a concern brought up by McLean County health director Bob Keller at a recent meeting of local officials with the state Department of Public Health. Many local jurisdictions with bans have a hearing process under their local smoking ordinances.
"If somebody did contest a fine and go before a judge ... does the statute become vulnerable to a constitutional test?" Keller asks, adding that nobody at the state has come up with an answer.
The efficient thing to do would be to send a "trailer bill" through the legislature to clean up the language, Fritchey says, but there is a concern that "when you open the door a bit, you have a number of folks that would try to kick it all the way open."
Another potential problem is that there does not appear to be an exemption for tobacco research being done at Northwestern University in Chicago, says Sen. Maggie Crotty, an Oak Forest Democrat. "I think a lot of these things can be worked out," Crotty says.
Apart from such details needing to be ironed out, the only major change that has been proposed for the ban is an exemption for Illinois' riverboat casinos, which compete against boats in Iowa and Indiana that allow smoking.
The Illinois Casino Gaming Association, headed by Tom Swoik, plans to push for a five-year exemption from the ban or an exemption for the boats until the neighboring states enact smoking bans that apply to their casinos.
The casinos believe they will lose money because gamblers will skip Illinois' boats in favor of border state boats that allow smoking, and that those smokers who stay will have to take smoke breaks, taking them away from slot machines and table games, Swoik says.
"It's going to be a continuous effort," he says. "If you look at Rock Island, people are within three to five minutes of a casino without a smoking ban."
The exemption would only apply to the gaming floor.
The industry has surveyed its boats and found that 60 to 70 percent of the customers smoke. But Drea says the lung association did its own survey, counting how many people were smoking every 15 minutes, and found only 6 percent to 7 percent were smoking but that the smoke flooded the casino floor. "It's not a lot of people who are smoking."
"They did [the survey] at a strange time when there weren't a lot of people," Swoik counters. "Everybody that smokes isn't smoking continuously. We're not saying their numbers aren't true. But they can't say our numbers aren't true. It has to do with how many people are in the casino at the time you measure."
Regardless of the number of smoking gamblers, Drea says the issue should not be about casino revenue but about the health of employees who are standing in the smoke for an entire shift.
Swoik says such legislation could be attached to the major gambling expansion legislation being considered or in a separate bill. But Drea says she believes enough legislators who support the ban will withhold their votes for any gaming expansion that relaxes the ban.
The casinos believe they will lose money because gamblers will skip Illinois' boats in favor of border state boats that allow smoking, and that those smokers who stay will have to take smoke breaks, taking them away from slot machines and table games, Swoik says.
Chris Wetterich covers Springfield city government and politics for The State Journal-Register.
Illinois Issues, February 2008
