County Council Members, State Lawmakers at Odds Over How to Handle DLC Reform
Ongoing debate features competing proposals to fix slew of issues
In the ongoing debate about how to fix Montgomery County’s Department of Liquor Control, it seems no one is sure about the best way forward as competing visions clash at the county and state levels.
On Monday, members of the Montgomery County Council debated amendments they could support in a last-minute attempt to save a council-supported bill presented to the General Assembly that would allow private distributors to sell “special order” products in the county.
The changes put forth by council member Hans Riemer call for eliminating a proposal to charge distributors a fee, allowing the council to define what products are “special order” and allowing licensees to purchase special order spirits from private distributors as well as wine and beer.
Riemer said these changes would make the legislation more palatable to state legislators and possibly give the bill an opportunity to pass before the General Assembly wraps up its 90-day session in April.
“Without a successful bill, it’s untenable for our restaurants to have no solution for several years,” Riemer said during the meeting.
The proposed changes to the council-supported bill come after a House of Delegates committee chaired by Del. Ariana Kelly (D-Bethesda) and composed of Montgomery County delegates significantly changed the original bill Feb. 18 so that it now calls for an 18-member task force to study the county’s monopoly on the distribution and sale of alcohol; the findings wouldn’t be released until the summer of 2017. That means the General Assembly wouldn’t be likely to pass a bill related to the issue until the 2018 session.
The move left County Council members, who spent a significant amount of time over the past year and a half studying the problems at the DLC, with the possibility that nothing will be done about the controversial issue until just before a 2018 primary election in which they could be up for re-election. The council-supported bill, which would have enabled distributors to sell certain craft beer and fine wine products, was seen as a compromise that could be accepted by competing factions.
Those factions are county leaders, who want to protect the approximately $30 million in annual profits the DLC generates; the local union that represents approximately 400 DLC workers as well as thousands of other county employees; and local restaurant owners and beer and wine store owners who say problems with customer service, inaccurate deliveries and lack of selection have long hurt their ability to do business in the county.
The ongoing political maneuvering demonstrates how complicated it can be to alter a system that’s been in place for decades—especially when millions of dollars, hundreds of jobs and the future of the county’s nightlife scene are all considered to be on the line.
The council bill differed from competing legislation proposed by Del. Bill Frick (D-Bethesda), which would allow voters to decide in a referendum this year if the DLC’s monopoly on the wholesale distribution of all alcohol as well as the retail sale of all liquor should remain. It’s unclear what the prospects of that bill are as officials, who agreed to speak on background about it, have said it doesn’t have the votes to get the support of the county’s delegation.
Both Frick’s bill as well as the task force bill were introduced Monday in the Economic Matters Committee of the House, although neither had been voted on by the county’s legislative delegation. Gaining the support of the county’s delegation is typically needed for a bill to move out of committee and have a chance to pass the General Assembly.
On Monday, council members were displeased that members of the county’s state delegation had altered the proposed special order bill—which they saw as an option that could be passed now while operations at the DLC are improved—without consulting them about alternative solutions.
Council member George Leventhal expressed his frustration with County Executive Ike Leggett, who initially backed the special order proposal and then said he would support efforts to privatize the DLC—as long as there was a way to ensure the department’s annual profits were replaced.
“The county executive never wanted to take this on at all,” Leventhal said. “The County Council took it up because it was a major problem and it was being ignored and neglected. The County Council is again trying to solve a real problem and the county executive is sending legislators mixed signals.”
A county employee who represents both Leggett and the council in Annapolis, Melanie Wenger, said Leggett supports the idea of having a task force study the DLC issue as outlined in the proposed bill. Leggett is currently out of the country as part of a regional economic trip to Cuba.
Council member Marc Elrich said even the proposed task force would immediately be “in a box” because it would need to figure out how to replace the department’s revenue without implementing a tax of some form. Elrich also blamed restaurateurs for muddling the issue by supporting Frick’s legislation rather than supporting the special order bill.
“They’re the ones who were given a solution to their whining and decided they were going to go ahead and steal everything,” Elrich said. “I’m not terribly sympathetic.”
However, Elrich said he could live with Riemer’s proposed changes to the council-supported bill.
Council members Craig Rice and Tom Hucker, both former state delegates, said the council may be weakening its position by offering amendments when it still has an opportunity to get its original bill passed. The full Montgomery County house delegation declined to vote on the revised task force bill when it was presented at a delegation meeting Feb. 19 in Annapolis.
Hucker and Rice said there still may be an opportunity to bring back the original bill—with the proposed distributor fee and other facets—before proposing additional amendments in an attempt to appease state legislators.
However, Riemer said the distributor fee was creating problems at the state level. “I’ve heard a steady stream of comments saying the distributor fee wasn’t going to fly,” he said.
An executive employed by one large distributor, who asked to remain anonymous out of concern that speaking out could result in future problems dealing with the DLC, said his company wasn’t in favor of the special order proposal. The executive said it wouldn’t be profitable for the company’s trucks to only deliver certain products to a retailer or restaurant and not also drop off popular products like Bud Light or Miller.
Dwayne Kratt, a government affairs representative for Diageo, one of the world’s largest alcohol producers, said in a public hearing Monday at the House Economic Matters Committee that the company was opposed to the council-supported special order bill because it didn’t include spirits. He also said the bill fails to address the systemic problems of the DLC, would not be supported by the alcohol industry because of the proposed distributor fee, and that it offers no solution for the county’s lack of retail liquor stores. He said the county could support more than 200 retail stores that sell spirits, but currently only has 25.
“Any reform that involves the DLC or adult beverage services in Montgomery County needs to address the dearth of retail opportunities for retail sales,” Kratt said.
On Monday, council members ultimately voted to offer the proposed amendments, but only if the state delegation had no interest in approving their original bill.
On Friday the county’s House delegation is scheduled to once again take up the proposed task force legislation and county council members hope the lawmakers will return it to a form that’s more similar to the bill originally supported by the council. After that session, there may be a clearer picture about the future of the DLC.
“Friday will be fun,” council president Nancy Floreen said as the Monday meeting concluded.