ROCKVILLE – Nearly every Montgomery County Council member signed a letter restating the county’s stance on privatizing alcohol sales and the council sent it to the Montgomery County’s state delegation Nov. 12.
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President George Leventhal, Vice President Nancy Floreen, Council members Marc Elrich, Tom Hucker, Sidney Katz, Nancy Navarro, Craig Rice and Hans Riemer wrote the letter.
Floreen said council members signed the letter because any change to the alcohol sales in the county would significantly impact the county in multiple ways, such as its ability to purchase bonds.
“Nothing is simple here,” Floreen said.
Council member Roger Berliner (D-1) said he did not sign the letter because the county department of liquor control is a poorly run business beyond repair. The county liquor stores do not need to be eliminated from sales, said Berliner.
“What we are arguing for is competition,” Berliner said. “We allow the private sector in to compete with the county stores, and if the county stores do well they will continue to do well,” Berliner said. “But if the county stores don’t do well and business gravitates to the private sector, then from my perspective that is appropriate and proper.”
Leventhal, Riemer and Elrich formed an ad hoc committee this year to try to reform the department.
Riemer, committee chairperson, was not available for interview.
Leventhal, council president,said people buying special order alcohol products might have to pay a fee to buy directly from distributers rather from the county if the state approves the county’s resolution, which members wrote in June.
In the letter, council members stated lost revenue from alcohol sales would result in cuts in liquor bonds, which are being used to fund capital projects in the county.
“Consider that the $114 million is about half of all the capital funds that the county is seeking from the state to ad much-needed classroom space to address overcrowding in Montgomery County schools,” council members said in the letter. “We do not want to have to remove $114 million in needed projects, such as schools, libraries or transportation, from our capital budget.”
Council members said they wrote the resolution in response to statements by state delegates and by the state comptroller of their intention to privatize sales liquor sales.
Peter Franchot, comptroller for Maryland, said he proposed the change to end the county’s monopoly on alcohol sales.
“It’s a hangover from the era of prohibition when the county took over (alcohol sales),” Franchot said.
Maryland state delegate Bill Frick said he wrote the bill because his constituents wanted alcohol privatization. Frick said he plans for the bill to be listed as a referendum on the ballot for next year.Restaurateurs complained about limited selection and poor customer service by the department of liquor control, Frick said.
Frick said he wrote the bill to be a referendum that would appear on the November 2016 general election ballot in the county. It would be in the hands of the voters, he said.
“Our constituents have been wanting a reform,” said Frick. “This seemed to be a responsible way to achieve that.”
Leventhal said he did not think voters should decide whether to privatize alcohol because they would not understand how it would affect the county. Officials would have to find a way to make up the lost income, he added.
“Elected officials will face the consequence of finding out, how do we balance this budget, and how do we make up the revenue and how do we secure the bonds?” Leventhal said.
According to the Nov. 12 letter, the county would lose $30 million in revenue annually, as well as the ability to purchase $114 in liquor bonds, which are used to pay for capital projects.
Frick replied $30 million is small compared to a multi-billion dollar county budget.
“There’s a potential of a fiscal impact, and I’m committed to work to mitigate that,” said Frick.
Leventhal said he wondered where the state officials would find money to make up the difference.
“Is $30 million a small amount? Is the Wynne decision a small amount? Is the pension shift a small amount? Is maintenance of effort a small amount? At some point, all of these things aggregate and we’re looking at a potential tax increase.”
Leventhal said even though it may equate to half a percent of the county budget, all costs for the county add up. He added the county is likely increasing property taxes next year, not including thepotential tax increase from the state’s liquor control decision.
If the council privatizes alcohol sales, Leventhal said the county would likely have to increase taxes even more to fill the gap.
Berliner quoted Franchot as saying the change would be cost neutral because the improvement to alcohol distribution would attract businesses to the county.
“I’m worried about the revenue that would be lost, but I also think we are bleeding revenue today,” he said, referring to restaurant owners who choose locations beside Montgomery County.
“I think more restaurants would come to Montgomery County” he added, “so it would be a net positive
Berliner said a restaurant owner in northern Virginia said one third of his customers come from the county. The local chamber of commerce for his area supports the change,” he said.
“I represent Bethesda. We have lots of wonderful restaurants in Bethesda,” Berliner said. “I’m not going to smear our restaurants. I will tell you the Bethesda chamber of commerce cares very much about this issue.”