Update – 12:05 p.m. Friday – It appears the problems surrounding the Montgomery County Department of Liquor Control (DLC) will be subject to further study.
A state legislative economic committee on Thursday replaced a County Council-supported bill that would have allowed private distributors to sell certain special-order alcohol products directly to retailers and restaurants with an amended bill that would establish a task force to study problems at the DLC.
The economic committee, consisting of five members of the House of Delegates from Montgomery County, approved an amended version of the council-supported bill that would create an 18-member task force to examine whether the county’s monopoly on alcohol distribution and the retail sale of liquor should remain. The task force would be required to issue its findings in July 2017.
That means that if the amended bill passes, no legislative action to change the current structure of the DLC would likely take place until at least the 2018 General Assembly. A competing bill calling for a referendum to allow voters to decide whether to end the monopoly this year is still being pursued by Del. Bill Frick.
The legislative situation surrounding the task force bill was further complicated Friday, when a meeting of the Montgomery County House delegation decided to put off a decision on that proposal for a week. Frick’s referendum bill was not brought up for consideration during the Friday morning session.
This means that the task force measure will not be heard before the House Economic Matters Committee on Monday, on what is known as “Alcohol Day” — an annual legislative rite when alcohol-related bills of local interest to jurisdictions around the state are examined. In turn, this could significantly reduce the prospects for the task force bill clearing the House of Delegates this year, sources said.
The amended changes frustrated County Council member Hans Riemer, who chaired the ad hoc committee that examined issues at the DLC over the past year and put forth the special order bill pertaining to such products as craft beer and fine wine. The committee proposed the bill in response to complaints from restaurateurs and retail shop owners about inaccurate orders, high prices and poor customer service, particularly with special order products that aren’t ordered in bulk amounts by the DLC.
“There were very realistic achievable steps on the table that would have addressed one of the biggest problems with distribution and instead we’re getting a task force with no chance of legislative action for two years,” Riemer said Thursday in Annapolis.
Officials familiar with the legislation, who agreed to talk on background, citing the ongoing negotiations over how to proceed on the issue, said the amended bill represented a way forward when compared to competing legislation proposed by Frick. The officials said Frick’s bill doesn’t have enough votes to pass.
Frick declined to comment on the amended legislation Thursday.
The revised bill comes after County Executive Ike Leggett said he would be willing to develop options to privatize the DLC as long as the county can find a different source for the more than $30 million in profits the department generates annually.
Patrick Lacefield, a spokesman for Leggett, said the amended bill is consistent with what the county executive previously said and that Legget is not concerned with the way the bill would establish the task force.
The amended bill passed the committee by a vote of 5-0 Thursday with Dels. Ariana Kelly, Sheila Hixson, Marice Morales, Kirill Reznik and Anne Kaiser approving it. A sixth member of the committee, Jeff Waldstreicher, was not present.
Representatives of restaurants and business that attended the committee meeting said afterward they were frustrated that the bill essentially calls for more study of problems with the DLC that have already been well-documented. Over the past year, the County Council examined problems at the department in more than a dozen meetings and hearings. The county’s Office of Legislative Oversight issued two reports related to the department and the DLC itself put forth a 20-page improvement action plan.
“They’re going to have a study that doesn’t even assume there’s a problem,” Ginanne Italiano, president of the Greater Bethesda-Chevy Chase Chamber of Commerce, said. “Everyone knows there a problem. That’s the first concern. Second, there’s been a ton of studies that include validated information that say there is an issue here and these are the ways to fix it. Now we’re starting all over again to try to study something that we’ve already studied.”
“Now there’s a big question mark about what happens in the interim,” Melvin Thompson, government affairs representative for the Restaurant Association of Maryland, noted. “What will be the result of DLC’s action plan to improve customer service? Given what happened in December, they still haven’t gotten the message.”
Thompson was referring to missed alcohol deliveries by the DLC just before Christmas and New Year’s Eve that left many restaurants without certain alcohol products during one of the industry’s busiest times of the year. DLC Director George Griffin resigned in January following the delivery mishap.
On Thursday, the legislators also debated the proposed makeup of the committee. Morales said membership appeared to be stacked in favor of those who represent the alcohol industry and favor ending the county’s monopoly rather than those who favor maintaining the status quo.
Reznik disagreed, saying, “we’ve been repeatedly told” that many people in the industry want only partial privatization of the system and may not support ending the county’s alcohol monopoly. Reznik had previously signed on as a co-sponsor of Frick’s referendum bill.
The makeup of the task force under the amended bill calls for the following members:
Two members of the Maryland Senate, appointed by the chairman of Montgomery County Senate delegation
Two members of the House of Delegates, appointed by the chairman of the Montgomery County House delegation
Seven alcohol industry members jointly appointed by the Montgomery County Senate and House chairs
Five members appointed by Montgomery County Executive Ike Leggett, including three county government employees
Two members of UFCW Local 1994 MCGEO, AFL-CIO, the union that represents approximately 400 DLC workers
According to the bill, the task force would have the authority to hire a consultant who would be paid by the county. And it would be tasked with developing proposals to protect pay and benefits of county employees and how to replace any revenue that may be lost due to changes it makes.
The committee shot down an amendment proposed by Reznik that would have prevented the county from opening additional retail liquor stores. The county currently has 25 stores and plans are in the works to open five more.
Leggett said earlier this month the county continues to pursue opening the additional stores, despite the controversy and legislation surrounding the DLC.
Reznik attempted to make the case that continuing to open the stores could “artificially pump” up the department and lead to more revenue legislators would have to replace as well as more employees who could be put at risk should there be changes to the DLC. However, his colleagues disagreed, saying the county should be trying to improve the DLC’s overall performance by increasing revenue and improving retail operations. Reznik’s amendment was not seconded.
With reporting by Bethesda Magazine politics editor Louis Peck