Franchot says Montgomery’s alcohol monopoly is ‘bad for small business’
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Version 0 of 1. This hasn’t been the best couple of weeks in Montgomery County for Maryland Comptroller Peter Franchot. First, his agency acknowledged that it mistakenly sent millions of dollars in local income tax revenue to Montgomery municipalities instead of the county government. Then, in a widely distributed letter, Senate President Thomas V. Mike Miller Jr. denounced him as a publicity hound who enjoys “basking in the glow of press releases while ignoring your constitutionally mandated duties.” So it’s not surprising that Franchot (D) decided to pivot back to what he believes is a popular issue: ending Montgomery’s monopoly on alcohol sales. On Tuesday, he unveiled a report forecasting that privatization will create more than 1,300 jobs and $50 million in new wages in the county by 2020. The eight-page report was prepared by his office’s Bureau of Revenue Estimates, based on census data, state and county records, as well as research from the beer industry. Franchot called it “empirical confirmation” that Montgomery residents would benefit if the county got out of the liquor business. The current system is “bad for small business, bad for consumers and bad for the local economy,” Franchot said during a news conference at Jackie’s restaurant in Silver Spring. [Last call for Montgomery County liquor monopoly?] Montgomery officials have dug in to defend the system, which requires bar and restaurant owners to buy beer wine and liquor exclusively from the county. Only county-owned stores sell hard liquor to retail customers. The unusual system, a vestige of the post-prohibition era, produces $30 million to $35 million a year for the county. About two-thirds goes to general government expenses; the other third is leveraged to support revenue bonds that finance roads and other projects. The county, loath to give up that money, promptly scoffed at Franchot’s findings. “It just seems like he cooked up some economic assumptions to support the position he already had,” Patrick Lacefield, spokesman for County Executive Isiah Leggett (D), said Tuesday. Restaurant and bar owners have long complained about shoddy and uneven service from the county’s Department of Liquor Control. They say the agency has been slow to respond to increasing demand for craft beers and fine wines. Del. C. William Frick (D-Montgomery), who joined Franchot at the news briefing, is sponsoring legislation that would place a question on the 2016 county ballot asking whether businesses should be allowed to buy alcohol from private distributors. Franchot’s report predicts about $193 million in direct and indirect economic benefits, based largely on capturing alcohol sales that would normally occur in the District. The study notes that Montgomery’s per capita consumption for distilled spirits and beer is almost 41 percent below statewide averages. Privatization would give county residents more incentive to spend their alcohol dollars closer to home, Franchot said. “It’s about providing Montgomery County with better selection, better prices and better customer service,” he said. [Six questions about Montgomery liquor debate] County officials point out that 90 percent of the $22.8 million in net tax revenue that Franchot predicts from privatization would go to the state, leaving Montgomery scrambling to make up the gap. “That makes our point,” Lacefield said. “Basically, a privatization doesn’t make sense.” Frick’s bill must first be approved by Montgomery’s House and Senate delegations before it goes to committee hearings. It is not clear whether he has the votes. Franchot had said that he would pursue his own privatization bill in the upcoming General Assembly session. But he announced Tuesday that he was supporting Frick’s measure, describing himself as “his wing man.” Franchot did not explain why he abandoned his own bill, although it might have been because of a lack of interest on the part of legislative leaders, who would have to introduce the measure on his behalf. The chairs of the two committees that handle alcohol matters said Tuesday that they saw the issue as a local matter, with little statewide consequence. Del. Dereck E. Davis (D-Prince George’s), chairman of the House Economic Matters Committee, said he had preliminary discussions with Franchot about sponsorship but that he was not keen on the idea. “For me, personally, that whole issue frankly is a very thorny political issue. I’m going to let Montgomery and its delegates and senators work it out,” Davis said. State Sen. Joan Carter Conway (D-Baltimore), chairman of the Senate Education, Health and Environmental Affairs Committee, said her staff spoke to a Franchot representative and had much the same reaction — that unless it was a statewide matter, it wasn’t appropriate to get involved. “It’s a specific jurisdiction bill,” she said. |