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Report: No ‘significant loss’ of revenue from state smoking ban

October 2, 2012
By KURT HAUGLIE - DMG writer ( , The Daily Mining Gazette

HOUGHTON - Douglass House Saloon Manager Kent Wilkinson doesn't like the fact Michigan legislators passed a smoking ban in businesses, including bars and restaurants, because it resulted in a loss of revenue in his establishment.

However, Wilkinson's experience is contrary to the results of a study by a University of Michigan researcher released in August, which found there has been no significant financial loss to Michigan businesses, except night clubs, since the Dr. Ron Davis Smoke-Free Air Law took effect on May 1, 2010.

Wilkinson said he estimates business at the bar next to Armando's Restaurant on Shelden Avenue in Houghton declined 10 to 20 percent after the smoking ban went into effect.

Article Photos

Kurt Hauglie/Daily Mining Gazette
Douglass Saloon Manager Kent Wilkinson mixes a drink at the bar Monday. A recently released study by a University of Michigan researcher shows no significant loss of revenue to businesses, including bars and restaurants, since the Michigan smoking ban went into effect May 2010. However, Wilkinson said revenue at his establishment dropped 10 to 20 percent.

"It's definitely dropped," he said.

However, Wilkinson said he thinks the drop-off in business at the bar may have bottomed out, now.

"It's leveling off," he said.

Wilkinson said he's heard from drivers who deliver his liquor, sales at grocery stores and liquor stores are increasing.

"A lot of the local people are drinking at home," he said.

Before the smoking ban went into effect, Wilkinson estimates about 60 percent of the Douglass Saloon customers were smokers.

Wilkinson said Armando's was made non-smoking in 2006, but many smokers would order then eat their meals in the bar.

Guy St. Germain, Western Upper Peninsula Health Department health officer/executive officer, said the report on the effects of the smoking ban on businesses by Helen Levy, Ph.D., for the Michigan Department of Community Health is much more in-depth than reports by the Michigan Department of Treasury released in 2011, which estimated the possible financial loss to the state as a result of the ban.

"They've issued a couple summary reports on taxes," St. Germain said.

Those reports by the DOT also showed no significant change in revenue after the smoking ban went into effect, but St. Germain said that was early in its existence.

The report by Levy goes back to 2006 and uses data on several factors, such as sales tax, cigarette and lottery (Club Keno) sales in bars, unemployment rates, seasonal differences, Michigan's economy and population changes.

"Just looking at sales tax like the treasury doesn't separate out other factors," St. Germain said. "(The Levy study was) able to determine validly whether there was any effect after the law went into effect."

According to Levy in her report, "The evidence presented here suggests that in the aggregate, the smoking ban had no statistically or substantively significant negative effect on the bar and restaurant industry in Michigan. The overall lack of negative effect is consistent with numerous studies evaluating indoor smoking bans in other states and localities."

However, Levy also wrote some establishments, such as night clubs, were negatively affected financially by the smoking ban.

St. Germain said the experiences of the health department's sanitarians who make inspections at restaurants are indicating many owners and managers aren't bothered by the smoking ban.

"We have not had bad feedback about this law," he said. "This is one of the public health policies about which we've received more positive feedback in a long time."

Before the state law went into effect, St. Germain said the WUPHD developed a policy for banning tobacco smoking in work places in its coverage area of Baraga, Gogebic, Houghton, Keweenaw and Ontonagon counties because many studies around the world showed there was no safe level for breathing in second hand smoke.

"Our health department took a position on clean indoor air years before the state law came about," he said.

St. Germain said the Levy study validates the health department's earlier position on tobacco smoke-free indoor air.

"It shows you can have a good health policy as well as good social policy," he said.

Wilkinson said he stopped smoking 29 years ago, but he wasn't bothered by the smoke at the Douglass House Saloon. Most of the bar's employees are smokers, also.

He thinks the statewide ban on smoking is an example of government overreaching, Wilkinson said, and he doesn't understand why bars and restaurants can't just be allowed to put signs out front stating smoking is allowed inside and people should enter at their own risk.

"This place is my living room," he said. "The government came into my living room and dictated to me what I can and cannot do."

A link to the Levy study can be found at the Michigan Department of Community Health website at,4612,7-132-8347-286249--,00.html.



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