Maryland: Leggett proposes Montgomery Liquor Authority to upgrade service

Mark Willingham Uncategorized

Maryland: Leggett proposes Montgomery Liquor Authority to upgrade service

Source: Washington Post

By Bill Turque

November 17

Montgomery County would retain its lucrative monopoly on alcohol sales but create an independent liquor authority to improve customer service under a proposal unveiled Thursday by County Executive Isiah Leggett (D).

The county collects more than $22?million a year in profit under the system, which requires that bars, restaurants and retail stores buy beer and wine directly from the county instead of from private wholesalers. Consumers can buy beer and wine in private stores, but if they want hard liquor, they must go to county-owned outlets. It is the only such system in Maryland, and there are few like it in counties anywhere.

Critics, including restaurant owners and consumers, have long assailed the system as a relic of the era that followed the repeal of Prohibition and a legacy of the county’s conservative, rural roots.

Critics complain of poor selection at the Department of Liquor Control’s warehouse and late or damaged deliveries.

But the county has been loath to give up the revenue generated by its liquor monopoly, a portion of which has gone to road construction. Opponents counter that within the county’s $5?billion budget, the loss of revenue would be minimal and be offset by increased economic activity triggered by the liquor industry’s privatization.

State lawmakers and Maryland Comptroller Peter Franchot (D) pressed for full or partial privatization last year but eventually agreed to Leggett’s proposal to form a task force to examine alternative models. The working group recommended a series of privatization options. The county also hired a private consultant, the PFM Group, to study the issue.

Under the option selected by Leggett – and recommended by PFM – the county would fold the Department of Liquor Control into a Liquor Authority. Leggett would name a board of directors, which would hire a chief executive. The authority would oversee all alcohol distribution and sales, while the county receives an annual payment of net profits. Unionized warehouse employees would still bargain collectively with the county over pay and benefits.

The proposal represents Leggett’s second major push to privatize a county function. Last year, he led the effort to transform the county’s Economic Development Department into a separate entity.

Leggett said Thursday that the liquor-authority proposal gives the county the best chance to retain its revenue while bringing in private-sector expertise to improve service. “It’s an organization that is much leaner and meaner, protects our employees and is able to give us some reasonable guarantee of revenues,” Leggett said.

Leggett’s staff is drafting a bill to be considered in the General Assembly’s coming legislative session. The Montgomery County Council will be asked to take a position on the measure for the legislative delegation but will not take formal action.

Del. C. William Frick (D-Montgomery), who led the push for privatization last year, called Leggett’s plan “an admission of failure.” “This doesn’t do anything to solve the complaints of consumers or small businesses,” Frick said. “It’s just a monopoly under another name. It’s the same structure with an additional layer imposed.”

Council member Hans Riemer (D-At Large), who proposed a partial privatization last year, said that Leggett’s plan is “worth looking at” but that he has some questions.

“The concern I’ve always had with the authority model is accountability,” said Riemer, a member of the working group. “What do you do when service deteriorates or if the authority isn’t doing a good job?”

Leggett said he doesn’t expect all stakeholders to fully embrace the plan, even though he believes it strikes the best balance between improving service and retaining revenues.

“My view is, we have to finally put this to rest.” he said.