{"id":12295,"date":"2020-03-02T10:49:21","date_gmt":"2020-03-02T15:49:21","guid":{"rendered":"https:\/\/www.theseventhstate.com\/?p=12295"},"modified":"2020-03-02T10:49:29","modified_gmt":"2020-03-02T15:49:29","slug":"is-this-moving-into-the-21st-century","status":"publish","type":"post","link":"https:\/\/www.theseventhstate.com\/?p=12295","title":{"rendered":"Is This Moving Into the 21st Century?"},"content":{"rendered":"\n

By Adam Pagnucco.<\/em><\/p>\n\n\n\n

Montgomery County Executive Marc Elrich has announced<\/a> that he is \u201cfocused on building a 21st century economy that will help the County maintain its leadership position in the State, while being more competitive in the Washington D.C. metropolitan region.\u201d \u00a0And how will that be done?<\/p>\n\n\n\n

By marketing the county\u2019s 1930s-era soviet liquor\nmonopoly, of course!<\/p>\n\n\n\n

The county\u2019s Alcohol Beverage Services (ABS), formerly known as the Department of Liquor Control, has a monopoly on wholesale distribution of alcohol from which only small, local craft breweries<\/a> and distilleries<\/a> are exempt.\u00a0 Through its county liquor stores, ABS also has a monopoly on off-premises retail sales of spirits.\u00a0 This structure has been in place since the end of prohibition.<\/p>\n\n\n\n

The original purpose of the liquor monopoly<\/a> was to \u201ccontrol certain obnoxious practices\u201d and \u201ckeep the county an attractive place to live.\u201d\u00a0 Now, however, the purpose of the monopoly is to make money.\u00a0 During the current fiscal year<\/a>, ABS is projected to contribute $28 million to the general fund and an additional $9 million to pay off county debt service.\u00a0 Despite its overall profitability, ABS is under heavy pressure to make even more money for four primary reasons.<\/p>\n\n\n\n

First, the county projected a $100 million revenue shortfall<\/a> back in December.\u00a0 It\u2019s unknown whether that number will change when the executive\u2019s recommended budget is released next month, but if there is a shortfall of close to that amount, that\u2019s a problem.<\/p>\n\n\n\n

Second, the county has been raiding its retiree health care fund<\/a> to balance its budget in recent years.\u00a0 A statement by Wall Street credit agency Moody\u2019s warned the county to stop doing that<\/a>.\u00a0 If the county takes heed, how will it replace that money?<\/p>\n\n\n\n

Third, the county council clearly has no appetite for tax increases<\/a> at the moment.<\/p>\n\n\n\n

Fourth, Council Member Hans Riemer recently revealed that the county liquor stores as a group are actually losing money<\/a>, not making it.\u00a0 That prompted an explosive reaction<\/a> from ABS Director Bob Dorfman amid questions about whether the stores should continue operations.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

An excerpt from an email by the county executive calling for a 21st Century economy and simultaneously promoting the liquor monopoly.<\/em><\/p>\n\n\n\n

ABS has now proposed a solution for increasing the stores\u2019 profitability: it wants to rebrand them.\u00a0 In a council session on February 20<\/a>, the council reviewed a letter from the county attorney asking for permission to hire outside counsel specializing in trademarks to secure a new name.\u00a0 The county\u2019s chief administrative officer told the council that the specific name being considered is \u201cCork and Barrel,\u201d which a simple Google search confirms is widely used around the country (including in Maryland<\/a>).\u00a0 The initial outlay to the trademark attorney is expected to be less than $6,000.\u00a0 But if ABS does go through with a name change, there will be many additional expenses for logo design and changes to facilities and equipment.\u00a0 Last summer, when water and sewer utility WSSC proposed a name change, the projected expenses totaled $850,000<\/a>.\u00a0 Council Member Evan Glass raised the experience of WSSC and said<\/a>, \u201cIf a government monopoly or a quasi-government monopoly needs a marketing and outreach strategy then there is a problem.\u201d<\/p>\n\n\n\n

Three council members \u2013 Riemer, Glass and Andrew Friedson \u2013 voted against the appointment of counsel.\u00a0 Friedson<\/a> and Glass<\/a> have gone on record in opposition to the liquor monopoly.\u00a0 Riemer thinks it is time for the county to close its retail liquor stores<\/a>.\u00a0 The rest of the council voted in favor of hiring outside counsel.<\/p>\n\n\n\n

The county council has almost no power to control the liquor monopoly<\/a> under state law.\u00a0 But the General Assembly does and its vision for the monopoly is very different from the Elrich administration\u2019s.\u00a0 In 2017, the General Assembly passed a state law<\/a> enabling the monopoly to contract with private stores to allow them to sell spirits.\u00a0 (Right now, only county liquor stores may sell hard alcohol \u2013 a crucial advantage for the county.)\u00a0 But ABS has ignored the law\u2019s intent and has so far refused to allow private retail sales of spirits.\u00a0 Its rationale is understandable: without its retail spirits monopoly, its stores might never be profitable.\u00a0 No dissenting votes were cast in Annapolis against the law that the monopoly now flouts.\u00a0 Will MoCo\u2019s state legislators hold it accountable?<\/p>\n\n\n\n

As for the name change and marketing expenses, consider\nthis.  State law requires private beer\nand wine stores to purchase products from the county liquor monopoly\u2019s\nwholesale operation.  Their payments will\nnow be used to rebrand and market the county liquor stores that are in direct\ncompetition with them.  In essence, they\nwill be required to pay for the county\u2019s attempt to raid their market share and\ntake away their business.<\/p>\n\n\n\n

How is this a legitimate function of government?<\/p>\n\n\n\n

How can Montgomery County do this and claim that it is\nbusiness friendly??<\/p>\n\n\n\n

MoCo faces a choice. \nIt can move into the 21st Century and allow competition.  Or it can have a 1930s-era soviet liquor\nmonopoly.<\/p>\n\n\n\n

It can\u2019t do both.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Adam Pagnucco. Montgomery County Executive Marc Elrich has announced that he is \u201cfocused on building a 21st century economy that will help the County maintain its leadership position in the State, while being more competitive in the Washington D.C. metropolitan region.\u201d \u00a0And how will that be done? By marketing the county\u2019s 1930s-era soviet liquor … Continue reading Is This Moving Into the 21st Century?<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[151,1449,90],"tags":[1545,806,1439,469,1513,1724],"class_list":["post-12295","post","type-post","status-publish","format-standard","hentry","category-adam-pagnucco","category-department-of-liquor-control","category-hans-riemer","tag-adam-pagnucco","tag-andrew-friedson","tag-department-of-liquor-control","tag-evan-glass","tag-hans-riemer","tag-liquor-monopoly"],"jetpack_shortlink":"https:\/\/wp.me\/p4mKJE-3cj","jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/12295","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12295"}],"version-history":[{"count":1,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/12295\/revisions"}],"predecessor-version":[{"id":12297,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/12295\/revisions\/12297"}],"wp:attachment":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12295"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12295"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12295"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}