Maryland: Leggett Strongly Opposes Efforts to End County’s Liquor Monopoly 

The Montgomery County executive urged state representatives Wednesday not to pursue legislation that could doom the Department of Liquor Control

Source: Bethesda Magazine

By Andrew Metcalf

2015.11.19

Montgomery County Executive Ike Leggett made his first public appearance in more than two weeks to vehemently oppose efforts by state representatives that could end the county’s alcohol monopoly.

Leggett, who has been recovering from back surgery, appeared at a state legislative priorities hearing Wednesday night in Rockville to tell the county’s state legislators that the county can’t afford to lose the approximately $35 million in annual profit generated by its Department of Liquor Control.

“You haven’t seen me in the past couple of weeks because I’ve been ill,” Leggett said. “But I came here tonight, basically out of my sick bed, to tell you this is a mistake, don’t make it. It will harm us and it will harm us for good.”

The county executive spoke to local legislators including Del. Bill Frick (D-District 16)-the primary sponsor of a bill that would set a referendum to allow voters to decide whether the county’s alcohol monopoly should end-at the County Council office building.

Frick’s bill, which is also sponsored by five other members of the Montgomery County state delegation, is one of two efforts aimed at the DLC, which controls the wholesale distribution of alcohol and the retail sale of liquor in the county. Maryland Comptroller Peter Franchot said he would also pursue legislation to eliminate DLC’s monopoly during the General Assembly session that begins in January.

Leggett told the legislators that the county is financially strapped and explained how each portion of the DLC’s profit is spent: 60 percent goes to education, 14 percent to public safety, 3 percent to retiree and health benefits, 4 percent to protect bus operations, 11 percent to a surplus fund and 8 percent to debt service. He said revenues are used to service more than $100 million in bonds and mentioned that earlier this month bond rating agencies gave the county a AAA bond rating-the highest one. “Please do not run the risk of destroying what we’ve protected,” Leggett said.

He said he’s typically against monopolies, but the county needs the funds generated by the DLC. “If you have a plan that would allow us to get out of this business that would protect our interests, I would be willing to listen to that approach,” Leggett said.

Council member Nancy Floreen, one of eight council members to sign on to a letter opposing efforts to end the monopoly last week, reiterated Leggett’s remarks. She said the DLC would be put “out of business” if either of the two legislative proposals became law, despite their supporters’ claims that they would simply allow private entities to compete against the DLC.

Both Floreen and council member Marc Elrich said that trade regulations and business practices prevent different alcohol wholesalers from selling the same product in a certain territory-a point they said would eliminate DLC’s ability to compete with private distributors if the county operation can’t sell certain products.

Elrich, who serves on a council committee that has been examining problems at the DLC, said the committee’s work has resulted in improvements at the department, which has been criticized for inaccurate orders, high prices and a lack of selection-particularly concerning craft beers and fine wines. He said the DLC’s commitment to improve its operations will result in a better system for county businesses and residents.

The hearing provided an opportunity for legislators to hear feedback on their proposals. While some asked questions, the lawmakers didn’t respond directly to the statements by county officials.

Gino Renne, president of UFCW Local 1994 MCGEO, which represents about 8,000 county employees including more than 350 DLC workers, told legislators, “If you support a plan to cut 400 jobs, labor will never forget, never.”

Leggett, the council members and Renne all said they support legislation that would allow private companies to distribute special order products-mostly specific craft beers and fine wines. That proposal would keep most of the DLC’s operations intact and is being pursued as a bill in the upcoming legislative session after the council passed a resolution in July detailing it.

Supporters of the efforts to end the monopoly were also at the hearing and applauded the proposals by Frick and Franchot.

Heather Dlhopolsky, chairman of the board of directors for the Bethesda-Chevy Chase Chamber of Commerce, said ending the county’s alcohol monopoly is the chamber’s No. 1 priority. “It’s time for the industry to be open to private competition so that our county’s businesses and residents can be better served,” Dlhopolsky said.