After Hours Alliance

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Quota Woes


Posted By on Sep 30, 2015

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An article in today’s Santa Fe Reporter takes issue with the number of liquor licenses in Santa Fe, with the attention-grabbing headline Over the Limit: Santa Fe has 128 liquor licenses, nearly 300 percent over its quota.

“300 percent over its quota” refers to the quota system, which limits the total number of licenses in the state. Urban areas tend to be over quota, which means that they have proportionally more licenses than the statewide average, whereas rural areas tend to be under quota. The article’s implication is that having more than our fair share of licenses causes problems like alcohol abuse, but the logic is unclear (there is discussion of New Mexico’s ranking as the state with the highest rate of alcohol-related deaths in the nation, but as Santa Fe is home to less than 5% of the state’s population I’m not sure how our being over quota impacts those statewide numbers). But whatever the rationale, the article clearly promotes the general message that too many licenses equals too many alcohol-related deaths.

This is problematic to me because the article leads with our tragic ranking out of all states, but fails to contextualize the quota that Santa Fe exceeds with per-capita numbers from other states. For example, New Mexico has 1411 quota licenses (this means full liquor licenses, including service establishments as well as package sales, but does not include private clubs). Compare that to Colorado. You can download an excel spreadsheet of all the active licenses in Colorado—there are about 8,160 licenses that allow full liquor sales by my count (also not including private clubs).

So let’s look at the math. New Mexico has 17% of the licenses that Colorado does. Colorado has about 250% the population of New Mexico. So per capita, NM has about 1 license per 1478 people while Colorado has about 1 license per 656 people. In other words, Colorado has more than double the number of licenses per capita. Does that mean that Colorado should have double the alcohol-related deaths per capita than New Mexico? 

Colorado doesn’t. According to the CDC’s data for 2013, Colorado had 4.8 alcohol-related deaths per 100,000 people, whereas New Mexico had 7.4 alcohol-related deaths per 100,000 people. Now, Colorado’s ranking is nothing to brag about. They are still significantly above the national average. But the assumption that more licenses per capita causes more deaths per capita is a faulty one. Yes, the number of licenses per capita can be correlated with alcohol abuse metrics, but so are other factors—poverty, for one.

And that’s why the incomplete story presented by this article bothers me. A liquor license costs $2500 in Colorado and anywere from $300,000-$800,000 in New Mexico. This high cost has been identified as a critical economic development issue for New Mexico communities. It’s especially a problem for small towns and rural communities—Silver City, for example, doesn’t have a single bar with a full liquor license left in its downtown (fortunately it has one distillery that can serve its own spirits). This affects their ability to retain their human capital, provide a high quality of life for their residents, and compete for regional tourists with similarly sized cities in neighboring states. I believe that these community-level dynamics have more to do with the propensity of individuals in a community to abuse alcohol than traditional approaches recognize.

Alcohol abuse is clearly a tragic problem in New Mexico, but to say that it’s simply because we have too many liquor licenses is an unfortunate oversimplification–one that has meaningful consequences in terms of our ability to take action.

Photo by Wagner T. Cassimiro

UPDATE: New Mexico ranks #44 in bars per capita with one bar for every 18,759 residents. This reflects the trend of quota licenses that were once being used for bars being bought by big corporations that use them for package sales–the topic of a future post.

1 Comment

  1. The correlation of alcohol related deaths to number of liquor licenses defies the basic tenets of your college course, Logic 101. Vastly too many other factors are involved.

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