{"id":7663,"date":"2017-02-28T07:00:15","date_gmt":"2017-02-28T12:00:15","guid":{"rendered":"https:\/\/www.theseventhstate.com\/?p=7663"},"modified":"2017-02-27T17:52:30","modified_gmt":"2017-02-27T22:52:30","slug":"a-reply-to-the-county-executive-on-the-liquor-monopoly","status":"publish","type":"post","link":"https:\/\/www.theseventhstate.com\/?p=7663","title":{"rendered":"A Reply to the County Executive on the Liquor Monopoly"},"content":{"rendered":"

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

Thanks to County Executive Ike Leggett for responding<\/a> to my post<\/a> on how his administration ignored my proposal to make up revenue for the Department of Liquor Control (DLC).\u00a0 I stand by my piece and reply to several of his points as follows.<\/p>\n

1. \u00a0Contrary to the Executive\u2019s contention, my proposal was in fact never analyzed during the time of the DLC task force.\u00a0 His consultant\u2019s report<\/a> never mentions it despite the agreement of his staff to include it<\/a>.\u00a0 Try finding my proposal, my name, a reference to Seventh State or an analysis of my idea for using cable funds to finance DLC\u2019s debt in the report.\u00a0 They are simply not there.<\/p>\n

2. \u00a0The Executive alleges that I made a \u201cbasic math mistake\u201d by omitting DLC\u2019s debt service from the revenue needing to be replaced.\u00a0 Not at all.\u00a0 Anyone reading my proposal<\/a> can see that I did not omit it.\u00a0 I simply dealt with it separately from the return DLC sends to the operating fund since the two revenue streams require different fixes.<\/p>\n

3. \u00a0The Executive is correct that the state has imposed numerous unfunded mandates and fees on the counties in recent years.\u00a0 I should know.\u00a0 I helped organize a campaign against the teacher pension shift<\/a> in 2012 that included county governments, school boards, community groups and elected officials in both parties.\u00a0 But rather than merely complain about the state, let\u2019s recognize that it has a role to play in dealing with the liquor monopoly and the revenue question since DLC was created in state law.\u00a0 A visionary Executive with a plan to transition away from the liquor monopoly would be invaluable in securing the state\u2019s cooperation.<\/p>\n

4. \u00a0The Executive is wrong about my proposal to use cable funds to service DLC\u2019s debt in two ways.\u00a0 First, he claims that I proposed raising the 5% fee the county currently levies on cable bills.\u00a0 That\u2019s not what I said, and in any case, the fee is already at the maximum level allowed by federal law<\/a>.\u00a0 Second, he claims that \u201cCable fund money cannot legally be used for purposes other than cable-related needs: technology and communication purposes. We cannot take Cable Funds to build roads and schools.\u201d\u00a0 That is absolutely wrong.\u00a0 The county\u2019s own cable lawyer advised the County Council in 2012<\/a> that the county has discretion over how the 5% fees can be spent, but not on amounts collected over that level or on behalf of municipalities.\u00a0 Those amounts not subject to county discretion were excluded from my analysis.\u00a0 In fact, the Executive transfers some money from the cable fund to the general fund right now.\u00a0 The approved FY17 budget<\/a> states, \u201cFunds are transferred from the Cable Fund to the General Fund to cover the cost of certain administrative services provided by the County to the Cable Fund ($654,353) and other contributions ($5,163,433).\u201d\u00a0 That\u2019s right, folks, the Executive\u2019s statement in his reply to us is contradicted by his own budget.<\/strong><\/p>\n

Why is the Executive so resistant to the idea of using cable funds for DLC\u2019s debt service?\u00a0 Perhaps one reason is because cable fees are the source of millions of dollars for County Cable Montgomery and Montgomery Community Media, two public \u201cnews\u201d outlets that provide \u201ccoverage\u201d for county elected officials.\u00a0 Try to locate an unflattering \u201cnews\u201d article about county elected officials in any of the \u201ccoverage\u201d provided by these outlets.\u00a0 Good luck finding any because one of them is part of county government and the other is a non-profit that gets more than 80% of its budget from the county.\u00a0 What\u2019s the better use for this money?\u00a0 Financing Pravda<\/a>-style public relations or helping to fix the liquor monopoly?<\/p>\n

5. \u00a0The Executive notes that Worcester County\u2019s former monopoly on spirits may be coming to an end.\u00a0 He is probably right about that.\u00a0 Worcester\u2019s monopoly, while not including wine and beer as Montgomery\u2019s does, did an even poorer job of customer service than MoCo and was busted by the Comptroller for breaking numerous laws in 2010<\/a>.\u00a0 After Worcester\u2019s monopoly was opened to competition in 2014, the county lost 42% of its wholesale business after a year (while keeping 96% of its retail volume)<\/a> and its leaders may decide to exit alcohol sales altogether.\u00a0 But if they do so, it will be because they have decided they can\u2019t compete with private distributors.<\/p>\n

That seems to be the rationale the Executive has for shielding DLC from competition: since (in his view) it can\u2019t compete, competition shouldn\u2019t be allowed.\u00a0 How is that a good thing for licensees and consumers?\u00a0 Isn\u2019t there a chance that open competition could cause DLC to improve while making private wholesalers pick up their game?<\/p>\n

Also, the Executive says, \u201cIn the liquor business it is the suppliers\/manufacturers who decide which ONE distributor\/wholesaler will sell their products.\u201d\u00a0 That may be true under most circumstances in Maryland, but COMAR 03.02.01.12<\/a> exempts county liquor dispensaries from this arrangement.\u00a0 In other words, state law allows manufacturers to sell to both county liquor sellers and private distributors.\u00a0 That is what happens now.\u00a0 In fact, DLC couldn\u2019t exist without this exemption.\u00a0 Competition between DLC and the private sector can<\/em> occur if the state allows it.\u00a0 The Executive simply opposes it.<\/p>\n

The County Executive\u2019s response shows that he is sensitive to criticism on this subject.\u00a0 If only that were enough to make real progress on the county\u2019s shameful liquor monopoly.<\/p>\n","protected":false},"excerpt":{"rendered":"

By Adam Pagnucco. Thanks to County Executive Ike Leggett for responding to my post on how his administration ignored my proposal to make up revenue for the Department of Liquor Control (DLC).\u00a0 I stand by my piece and reply to several of his points as follows. 1. \u00a0Contrary to the Executive\u2019s contention, my proposal was … Continue reading A Reply to the County Executive on the Liquor Monopoly<\/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_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[151,1449,167],"tags":[1545,1439,1549],"class_list":["post-7663","post","type-post","status-publish","format-standard","hentry","category-adam-pagnucco","category-department-of-liquor-control","category-ike-leggett","tag-adam-pagnucco","tag-department-of-liquor-control","tag-ike-leggett"],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p4mKJE-1ZB","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/7663","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=7663"}],"version-history":[{"count":1,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/7663\/revisions"}],"predecessor-version":[{"id":7664,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=\/wp\/v2\/posts\/7663\/revisions\/7664"}],"wp:attachment":[{"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7663"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7663"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.theseventhstate.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7663"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}