Smoke and mirror obscure KS business data

By   /   April 18, 2012  /   3 Comments

By Paul Soutar | Kansas Watchdog

TOPEKA — Kansas officials played a shell game with government reports they used to support a statewide tobacco ban.

In arguing that the state’s 2010 Kansas Indoor Clean Air smoking ban hasn’t hurt business, officials and activists pointed to Kansas Department of Revenue data that showed no decline in revenues.

There’s just one thing wrong with that KDOR data: it’s irrelevant.
The ban’s supporters point to KDOR data about “drinking establishments,” a category used by KDOR’s Division of Alcoholic Beverage Control. That report combines sales revenues from a range of establishments, including high-profit full-service restaurants that limited smoking before the ban as well as drinking places such as bars where smoking is more common.
KDOR has consistently pointed to that combined ABC report to bolster its contention that the ban had no impact on year-over-year revenues.
Now, KansasWatchdog has discovered that KDOR manages another report, data that may support bar owners’ contention that the smoking ban is bad for their business.
KDOR’s Office of Policy and Research, or OPR, compiles that data for federal Census Department and Bureau of Labor Statistics. Unlike the ABC revenue numbers, the OPR report breaks out full-service restaurants and drinking places—primarily bars and other, “places primarily engaged in preparing and serving alcoholic beverages for immediate consumption.”
The data, segregated by North American Industry Classification System, or NAICS, numbers, shows up on U.S. Census Department and Bureau of Labor Standards sites.
KansasWatchdog has discovered anomalies in the NAICS data on drinking places and has submitted the report for independent analysis.
In interviews and public testimony, state officials and anti-smoking activists have failed to present the OPR data, focusing instead on the ABC report.
Anti-smoking activist Duane Goossen, vice president for Fiscal and Health Policy at the nonprofit Kansas Health Institute, cited the combined bar and restaurant data supporting in his March 12 testimony before the House State & Federal Affairs committee.

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  • Pam Parker

    Omitting and skewing data is not new to Tobacco Control; it’s how they lie. In Ohio, this complaint was sent to Governor Kasich regarding an “economic” study done on Ohio bars. Only problem is, it’s all rigged to come out the way the Ohio Dept. of Health WANTED it to come out so they hired a biased researcher. See below:

    March 9, 2010

    Governor John Kasich

    Riffe Center, 30th Floor

    77 South High Street

    Columbus, OH 43215-6117

    Re: Formal Complaint against Director Wymyslo, Ohio Department of Health & Elizabeth Klein

    Dear Governor Kasich:

    I am writing to file a formal complaint against Director Wymyslo of the Ohio Department of Health and researcher Elizabeth Klein, hired by the Ohio Department of Health at $125 per hour to conduct an Economic Impact of the SmokeFree Workplace Act on Bars and Restaurants.

    On September 2, 2011, the Ohio Department of Health released Analysis of the Impact of the Smoke-free Workplace Act , held a press conference and issued a press release . The press release stated: According to researcher Elizabeth Klein, PhD, with The Ohio State University College of Public Health, the law has not had an impact on either type of business. “After accounting for unemployment and seasons of the year, the analysis found that the Smoke‐Free Workplace Act did not have an economic effect on restaurants and bars in the state as a whole,” she said. The Dispatch reported “Reviews of restaurant and bar sales between 2003 and 2010 showed a drop immediately after the ban was put in place, but business quickly bounced back.” How “quickly” did business bounce back? Who reimbursed these losses?

    Governor, please bear with me as I outline the flaws in Ms. Klein’s study.

    Ms. Klein is not an economist. Her title with OSU is “Health Behavior and Health Promotion”, a title which clearly shows Ms. Klein is biased. She has received funding on other occasions for Tobacco Control studies. If the Ohio Department of Health wanted an economic study done, why didn’t they contract with someone from the Fisher College of Business; someone who has no bias in the outcome of this study?

    “Drinking Places”, as defined by NAICS, primarily sell beer and liquor, not food. It took me 5 minutes to obtain costs from 2006 and 2011. Ms. Klein accounted for unemployment and seasons but did not factor in increased costs or increased number of businesses. Since 2006, the average wholesale costs rose:

    • 6.05% per bottle of liquor, according to a public records request from the Ohio Department of Commerce.

    • 17.95% for bottled beer

    • 26.27% for a keg of beer

    • The number of drinking places increased 11.82% from 2006 to 2011. Ms. Klein factored in nothing for the increased number of businesses.

    Clearly, if the costs of what we sell increased, then bars either sold products at a loss (to produce no statistically significant change in sales taxes) or we increased prices and lost money! If the number of drinking places increased 11.82%, yet there was no change in sales taxes, wouldn’t that prove bars lost money?

    Let’s look at it another way. Because everyone views this as a “tobacco” issue, when clearly it is not, let’s use this example. Let’s say the Ohio Dept. of Health decided that all restaurants much sell chicken that has not been fed hormones. Five years later, ODH hired a researcher with PETA to conduct an analysis on the economic impact on restaurants. Since Kentucky Fried Chicken’s main product is chicken, this researcher studies KFCs. In five years, KFC’s wholesale cost of chickens rose 20%. This PETA researcher finds that KFC’s sales taxes found no statistically significant change so she issues a report that restaurants that serve chicken aren’t impacted by ODH’s law on no hormones. This PETA researcher also neglected to note that in 2006 there were only 2,300 KFCs in Ohio. In 2011, there were 2,576 KFCs, a 12% increase. (These chicken franchises were told not only would this hormone-free ban not hurt their businesses, but they’d see hoards of new customers-added) This infuriates the Regional Manager for KFC and he tries to get this report reviewed and corrected. He tries to no avail to get the researcher and ODH to adjust the figures to account for a 20% increase in wholesale costs and that with 12% more KFCs, ODH reported (and now the media) that KFCs are doing fine with the five year old law. Now, Governor, if the cost of chickens increased 20% and yet sales taxes remained flat, don’t you agree that KFC lost money? If the combined sales taxes for all Ohio KFCs stayed the same yet there were now 276 more KFCs, weren’t the individual restaurants losing money? Oh, one more thing infuriated this KFC regional manager. Other states were considering a ban on hormones in chicken and they were citing this PETA researcher’s study in these other states because no one from Ohio did a darn thing about correcting this study.

    Governor, I’m asking you to have this study fixed with a correction released to the same media that covered the “no loss to bars” debacle. Liz Klein’s study was just used this week in an Indiana story about the pressure on the Indiana legislature to pass a state-wide smoking ban. By the way, we’re considering moving our business to Indiana. You see, their legislature EXEMPTED BARS!

    Please do not forward this letter to Director Wymyslo to respond to. This complaint is against him! And to pay a biased researcher $125 per hour to produce a report that backed Wymyslo’s desire for hormone-free chicken, I mean smoking bans in adult-only bars, is misuse of state money. Surely, Wymyslo knew Klein, being Health Behavior and Health Promotion, would arrive at the proper results.

    http://www.odh.ohio.gov/ASSETS/81B904A706574FFB97271C46256E53C2/Final%20Reports.pdf http://www.odh.ohio.gov/ASSETS/29F6EF832A304BA585420701FAD91D97/SmokeFreeRelease.pdf

    http://www.dispatch.com/content/stories/local/2011/09/02/heart-attacks-fewer-since-smoking-ban.html

  • History Buff

    Following the money behind the smoking issues trails back to the maker of the no-smoke products. Digging into the research THEY PAID FOR with grants ‘to fit their agenda’ and various major people involved (also gaining thru the same) opens ones eyes to what appears to be a giant marketing scam. The anti-smoke issue is now the big cancer on ‘we the people’ who are THEIR commodity for THEIR paycheck, no matter what business down the line gets hurt and no matter the dishonesty. On any anti product or function, follow the money to who profits.

  • http://varitasvincitprolibertate.wordpress.com Marshall Keith

    Loved your interview on KFDI. You are dead on when it comes to th8e activities of RWJF. They even participated in fake grassroots efforts and passed it off as educational material.

    http://tavernsclearing.blogspot.com/

    You brought up Ohio and the Supreme court case and the fact that the bans have devastated the bars. The following chart bares that out.

    http://veritasvincitprolibertate.wordpress.com/2011/09/15/things-are-smoking-in-ohio/

    On the questionable science, I’m sure you are aware of the Osteen decision on rhe 1992 EPA report. What you may not know is the fact that the subsequent Surgeon Generals Reports were written by many of the same activists including the Lead Author of the 2006 report. They actually admit to using the same questionable methodology on page 21.

    http://veritasvincitprolibertate.wordpress.com/2011/06/20/meta-analysis-science-or-a-tool-for-advocacy/

    Marshall P Keith