Economic Impact of the Pueblo Smoke-free Air Act

Background: On July 1, 2003, the City of Pueblo, Colorado implemented a smoke-free ordinance, the Pueblo Smoke Free Air Act [PSFAA]. It prohibited smoking in public places and work places, including bars and restaurants. Opponents of the ordinance argued that it would have a negative impact on bar and restaurant sales. Purpose: The purpose of this study was to determine whether the PSFAA had a negative economic impact on bar and restaurant sales tax revenue. Methods: Using 42-month pre- implementation and 42-month post-implementation sales tax revenue data provided by Pueblo's Finance Department and an interrupted times series analysis, this study assessed the economic impact of the PSFAA on sales tax revenues paid to the City of Pueblo by bars and restaurants. All sales tax revenue data were adjusted using the Consumer Price Index (CPI) for all items, all West Urban Consumers, not seasonally adjusted. Findings: Pre- to post-sales tax revenue data showed losses in sales tax revenue for bars and, despite gains in revenue for restaurants, these gains were not significant. A downward trend in tavern revenue which started seven months before implementation, continued for 12 months after, before beginning recovery. After adjusting for the Consumer Price Index,, Pueblo experienced a 20.3% gain in combined bar and restaurant sales tax revenue from the pre- to post- period. Conclusion: The PSFAA did not have a negative economic impact on bars and restaurant sales tax revenue ted from pre-implementation period data.