Maryland's bars and restaurants find different ways to deal with

There's a new message on the signboard outside of the Crossroads Inn, a roadside tavern that's just a 15-minute drive from the Pennsylvania line.

"THIS IS NOW A SMOKING BAR," the sign reads. "BARTENDERS WANTED."

A cardboard sign at the corner of the parking lot announces that June 18 marked the first day that patrons could smoke tobacco inside.

"Let's smoke," the sign says. Two American flags stick out from the sides, celebrating the state's grant of a waiver from the smoking ban that allows the bar to have some indoor smoking into 2011.

The display is a marked difference from March, when Crossroads owner Tim Brandenburg appeared in the Carroll County Times next to a signboard calling for the impeachment of Gov. Martin O'Malley.

Brandenburg said the smoking ban, which took effect in February, almost put him out of business. He said he lost somewhere between 45 percent and 60 percent of his sales because regular customers began driving to Pennsylvania, where it's legal to smoke inside. Instead of staying open until last call, Brandendburg said he would shutter his bar at around 10 o'clock most nights.

He said he took out a $40,000 loan and sold two antique trucks to keep the Crossroads Inn afloat.

"I thought for sure I wouldn't make it," Brandenburg said.

He said he wondered whether the slow economy was contributing to the decline in sales, but now he feels things are better than they were before. Sales increased by 25 percent in just over a week, he said. Patrons are coming back, and he's adding staff.

"I want to feel comfortable," said Kevin Smith, a cement worker having a mid-day beer last week. "I come here to drink a beer, smoke a cigarette and relax."

Smith said he was one of the many people who drove to Pennsylvania because he didn't want to stand outside.

The Crossroads Inn's struggles convinced Carroll County and state health officials to grant the bar a hardship waiver -- one of two in the state -- that exempts it from the statewide smoking ban, at least in part until February 2011.

Still, some other bars are drawing in new customers who may not have come out to eat before the ban took effect, which suggests a mixed bag of economic results for the first five months of the ban.

Overall, the effect of the ban has been difficult to judge. Even the statewide liquor and restaurant associations are having trouble setting the ban aside from other economic pressures, such as the struggling economy, the rising cost of fuel and even the increased prices of ingredients for food that have pushed up some menu costs.

"Our profits as an industry are way down because our costs are up. And now a lot of operators, much to their dismay, have had to raise their prices," said Melvin Thompson, vice president of government relations for the Restaurant Association of Maryland. "With all of this going on, I don't see how anybody can single out the effect of the smoking ban."

Jane Springer, executive director of the Maryland State Licensed Beverage Association, said it's similarly hard to judge the effect on bars. That industry is facing the same economic hard times as restaurants, she said.

When reviewing industries' performance in the state, researchers sometimes look to data from the Maryland comptroller's office, which tracks sales and use tax receipts by business category.

The restaurant association typically assumes 4 percent inflation each year, said Thompson, expecting that any real annual increase in sales would be seen above that margin. This year, comparisons are complicated by a sales tax increase, from 5 percent to 6 percent, which took effect in January. Still, judging by the growth rate, the industry is not having a great year.

Between February and May, sales and use taxes from liquor stores and taverns were up by 20 percent -- the same percentage that the sales tax rose. Receipts from restaurants and night clubs that sell alcohol were up by 18.6 percent during that time, and payments from hotels and motels that serve alcohol were up by 22.2 percent. Figures from June were not yet available.

Jeff Werling, an economist at the University of Maryland, College Park, said by e-mail that other factors make it difficult to judge the effect of the smoking ban.

"I will say that the income and price effects have probably had a big negative impact on hospitality, so it would be a big stretch to attribute it to the smoking ban," he wrote.

Werling said it might be better to look at the effect during a more normal time, but had not seen any studies to suggest that smoking bans have a lasting effect.

Springer, of the licensed beverage association, said she has been surprised that any waivers were granted at all. The waivers run until February 2011 and are available to businesses that can prove they have lost 15 percent or more of their food and beverage sales as a result of the ban.

"I think a lot of people, quite frankly, didn't even attempt the waiver because they didn't think they'd get it," Springer said. "Honestly, I was surprised to see that someone got it."