46 Smoke-Free Ordinances in Mississippi

By the end of 2011, 46 Mississippi communities will have implemented comprehensive smoke-free ordinances and more than 21% of Mississippian will live in a smoke-free community. See our latest fact sheet to learn more about these communities.


Also, our latest review of revenue from communities that collect an optional Tourism and Economic Development tax demonstrates that inflation-adjusted revenue increased 10.3% in the 12 months following the enactment of a smoke-free ordinance.

Economic Effects of Smoke-Free Ordinances in Mississippi Communities: An Examination of Tourism And Economic Development Tax Revenues

There are several objective methods for assessing potential impacts of smoke-free laws on the hospitality industry. The most common approach is to examine trends in sales tax revenue from the hospitality sector before and after the smoke-free laws ordinances are enacted. In Mississippi, communities may choose to collect an optional Tourism and Economic Development (TED) tax that can be placed on restaurants and/or hotels/motels. This tax currently ranges from 1% to 4% of gross revenue. Most communities that collect a TED tax impose this tax on both restaurants and hotels/motels. Some communities collect the same percentage of tax from each sector, while others tax each sector at a different rate. Also, some communities only impose this tax on one sector of the local hospitality industry. Among the communities that collect this optional TED tax during the study period, 17 have implemented a comprehensive smoke-free ordinance and 16 have not implemented a smoke-free ordinance (See Table 1).

This study examines inflation-adjusted pre- and post-ordinance TED tax revenue data for each of the 17 communities with comprehensive smoke-free ordinances (and at least 12 months of post-ordinance data), and compares these revenue data to the revenue data from Mississippi communities without smoke-free ordinances. For each of the 17 communities with smoke-free ordinances, revenue data from these comparison communities were aggregated across the same two 12-months periods. The percent change in TED tax revenue for the smoke-free community was then compared to the aggregated percent change across the comparison communities. Finally, an average percent change in revenue was calculated for the 17 smoke-free communities and compared to the average percent change in the comparison communities.

Summary
In order to provide a comparison for each of the 17 communities with comprehensive smoke-free ordinances, we aggregated revenue data from the communities with the TED tax but without smoke-free ordinances and calculated a comparison for each smoke-free community. Table 2 provides an average percent change in revenue in the communities without ordinances during the same time period we examined in the communities with smoke-free ordinances.

Detailed Methods

• Monthly sales tax collections data for municipalities are available at the local level from the Department of Revenue of the State of Mississippi. These monthly reports provide the amount of sales tax collected and the amount of Tourism and Economic Development (TED) taxes collected - http://www.dor.ms.gov/info/stats/transfer.html
• Data were adjusted for inflation using the Consumer Price Index (CPI) using September 2011 as the base month.
• We selected smoke-free communities with at least 12 months of post-ban data*.
• We contrasted percent change in revenue in each of these smoke-free communities to the aggregated percent change in the comparison communities in Mississippi that did not have smoke-free ordinances.
• Aggregated pre- and post-ordinance TED tax revenue data for control communities were extracted for the same period as each of the 18 smoke-free communities, and provide a comparison for the same time period.
• Given that Mississippi communities adopted their smoke-free ordinance at different times, these time periods differ for the 18 smoke-free communities
• Aggregated data from the 16 communities without smoke-free ordinances provide economic controls**

Results

Table 2 presents the the inflation-adjusted pre- and post- ban data for the Mississippi communities that have comprehensive smoke-free ordinances, collect a TED tax, and have at least 12 months of post-ban data. The percentage change in revenue for these towns ranges from -17% to 95%. As other researchers have noted***, this wide range reflects the volatile nature of the restaurant and hospitality industries, due to seasonality and turnover in businesses. Also, the largest changes occurred in the smaller communities.

For the communities with smoke-free ordinances as a whole, inflation-adjusted TED tax revenue were 10.3% greater in the 12 months following the enactment of a smoke-free ordinance. Conversely, there was no meaningful change in TED tax revenue in the aggregated control communities (-.1%). Thus there is no evidence that smoke-free ordinances harmed from the TED tax.

* Hernando experienced atypical revenue in October 2007 (post-ordinance study period) that was approximately 10 times as high as the monthly average for the study period. In order to avoid skewing the results in favor of the post-ordinance period, we replaced the TED tax revenue in Hernando for October 2007 with the revenue amount from November 2007.

** Data from two of the control communities were omitted due to changes in the TED tax structure during the study period. Ocean Springs increased the tax and Natchez added an occupancy TED tax during the study period.

*** Pope & Bartosch (1997)

Size of Workforce and Amount of Gaming at the Palace Casino, Before and After Implementing a Smoke-Free Policy

The Palace Casino in Biloxi implemented a smoke-free policy when it reopened on June 14, 2011. The casino voluntarily prohibited smoking inside all of the casino facility, with the exception of a smoking lounge located off of the casino floor. The purpose of this brief is to summarize the available data about the potential economic impact of this new policy.

The Mississippi Gaming Commission releases quarterly reports that provide data on all of the non-reservation casinos. Although these reports do not release revenue data, the commission does release data on the number of employees, number of slot games, and number of table games for each casino. This brief examines these data for the Palace Casino, in the context of the Coastal Region Casinos.



Coastal Region Casinos

1. Beau Rivage
2. Boomtown
3. Grand Casino
4. Hard Rock Casino
5. Hollywood Casino
6. Imperial Palace
7. Island View Casino
8. Isle of Capri
9. Palace Casino
10. Sliver Slipper
11. Treasure Bay

Methods

• Palace Casino data are examined for the number of employees, number of slot games, and number of table games for each Quarter from the First Quarter of 2006 to the 3rd Quarter of 2011
• Data are also examined for the total number of employees, number of slot games, and number of table games in the Coastal Region
• Given the seasonality of tourism and gaming, initial analyses focus on the 3rd Quarter for each year
• The New Palace Casino implemented their smoke-free policy in mid-June of 2011, and thus the 3rd Quarter 2011 data provide post-policy data
• Raw numbers of employees, slot games, and table games are provided for the New Palace Casino
• Percent of employees, slot games, and table games in the Coastal Region that are housed in the New Palace Casino are also provided
• These data provide illustrate the amount of the casino market in the Coastal Region that the New Palace Casino occupies

Results

• Data from the 3rd Quarter demonstrate that the Palace Casino experienced no reduction in the number of employees, slot games, or table games after implementing a smoke-free policy in June of 2011
• Data from the Coastal Region Casinos demonstrate no reduction in the Palace Casino market share of the region after implementing a smoke-free policy in June of 2011, as measured by the number of employees, slot games, or table games
• Although it is possible that the modest increases observed after the smoke-free policy are because the casino increased its square footage during the renovation preceding the smoke-free policy, there was no evidence of a reduction in workforce or the amount of gaming
• Based on the publicly available data from the Mississippi Gaming Commission, the implementation of a smoke-free policy did not harm the Palace Casino

• Cautionary note: Data are only available for one quarter after implementing a smoke-free policy. Data from subsequent quarters will be necessary to assess any long-term positive or negative trends in the number of employees, slot games, or table games
• Also, the number of employees, slot games, and table games serve as a proxy for revenue (because revenue data is not available) and may not perfectly correlate with revenue

Latest Details on Smoke-free Ordinances

We have added a new feature to our warehouse of information about local smoke-free ordinances in Mississippi. As many of you are aware, American Nonsmokers' Rights uses a different criteria for categorizing communities as having 100% smoke-free laws than we have used. ANR evaluates ordinances across three domains; 1) non-hospitality workplaces, 2) restaurants, and 3) bars. We have simply categorized communities as either having no ordinance, an ordinance with exemptions, or an ordinance with only minor exemptions. To illustrate, we have categorized Oxford as having a comprehensive smoke-free ordinance, whereas ANR does not consider Oxford to have a 100% smoke-free ordinance for non-hospitality workplaces because their ordinance exempts tobacco retail stores. 

To reduce confusion, we have created a spreadsheet that illustrates how ANR and Mississippi categorize the communities that we have determined to have compressive ordinances.

Latest Releases

We have just posted our latest report from the 2010 Youth Tobacco Survey (the 2011 survey is currently field). The latest reports from the 2011 University Surveys are also available under Feature Publications. Highlighted Result: 75.8% of UMiss students, 72.6% of USM sudents, and 70.4% of MSU students believe that smoking should NOT be allowed anywhere on campus.

More on Sales Tax Revenue

Earlier today, I posted trends for hospitality tax revenue in several Mississippi communities that have implemented comprehensive smoke-free ordinances. Another way to look at these data is to place the hospitality tax revenue in the context of overall sales tax revenue. In the charts below, I provide trends for the hospitality tax as a percent of the total sales tax revenue. Note that the impact of the hospitality industry on the local sales tax revenue did NOT decrease for any of these communities after smoke-free ordinances were implemented.


Starkville






Hattiesburg





Tupelo



Ridgeland

Sales Tax Revenue Following a Smoke-Free Ordinance

Some Mississippians have expressed concerns that smoke-free laws could harm restaurants and decrease local and state sales tax. Numerous studies and reports from states and communities outside of Mississippi, based on several objective outcomes which are examined before and after passage of comprehensive smoke-free legislation, revealed no impact or positive impacts on sales tax revenue and employment in the hospitality industry.



Current Situation in Mississippi
Almost half of Mississippi restaurants are located in communities with smoke-free ordinances, and sales tax revenues from restaurants have NOT decreased in the time since the ordinances were enacted. There are currently 41 municipalities in Mississippi that have implemented a comprehensive smoke-free ordinance, and twelve others have passed partial smoke-free ordinances that exempt bars. According to the Mississippi State Department of Health database of restaurants in this state, almost half (46%) of restaurants in this state are in one of these communities and thus are subject to smoke-free ordinances. Note that this percentage only includes those restaurants in communities with smoke-free ordinances and does not include restaurants that are voluntarily smoke-free, so it’s likely that substantially more than half of restaurants in Mississippi are smoke-free either due to choice or local ordinance. Analysis of sales tax revenue suggests that these smoke-free policies and ordinances have not decreased revenue.

The optional local tourism tax allows us to objectively examine the impact of these smoke-free ordinances. Mississippi cities and towns may implement an additional tourism tax on restaurant and hotel sales. Although not every municipality implements this optional hospitality tax, sixteen of the municipalities that have implemented a comprehensive smoke-free ordinance also have implemented a hospitality tax. Trend analyses for revenue from this tourism tax demonstrates that no community that enacted a smoke-free ordinance experienced a loss in revenue. Tourism tax revenues have been increasing in many of these communities, and have continued to increase following the enactment of smoke-free ordinances. The charts below illustrate revenue trends before and after smoke-free ordinances for several Mississippi communities.


Starkville's Hospitality Tax

Hattiesburg's Hospitality Tax




Tupelo's Hospitality Tax




Ridgeland's Hospitality Tax