County Executive Ike Leggett says he would be willing to develop options to privatize the Department of Liquor Control (DLC) so that a state bill to end Montgomery County’s alcohol monopoly could be considered in the 2017 General Assembly session.
Leggett wrote in a letter sent Friday to the presidents of four local Chambers of Commerce that he would not support any move to end the DLC’s current monopoly structure in this year’s General Assembly.
“When I met with you and the BCC Chamber members on January 20, 2016, I was quite clear that I have no philosophical objection to privatization,” Leggett wrote. “However, I was also clear that privatization could not be accomplished within the current legislative session, and that I would support an expedited Task Force to develop options for privatization and proposals for possible legislation prior to the 2017 General Assembly session.”
In an interview Monday with Bethesda Beat, Leggett added that county officials need to work with state legislators and the business community to come up with a unified proposal.
“This is too important, in my opinion, to leave to chance,” Leggett said. “I have no problem with privatization per se, but we need to make sure the county’s residents and taxpayers are protected on the financial issue.”
Leggett has fiercely defended the DLC’s existing structure, saying the more than $30 million in profit generated by the department is an integral part of the county’s operating budget. However, he has previously said he may be willing to work on a proposal that could end the county’s role in distributing and selling alcohol if the profit generated by the DLC was replaced by another source.
“I’m prepared to sit down and talk to find a way forward, but I’m not going to do it under the barrels of legislation that are out there now—in a 90-day session when legislators are considering 3,000 bills.”
Leggett said reforms would also consider ways to protect the department’s approximately 400 county employees.
The DLC controls the wholesale distribution of all alcohol in the county as well as the retail sale of all spirits. Over the past year, the department has been criticized for significant delivery issues and poor customer service by the restaurants and businesses that depend on its operations. On Friday, DLC Director George Griffin resigned, nearly a month after an error resulted in missed deliveries to customers by the department just before New Year’s Eve.
Leggett said Griffin had concluded that the attention focused on him in recent months had become a problem at the department and so he offered his resignation, which Leggett accepted.
Leggett’s letter came in response to a letter that the presidents of the chambers wrote asking the county executive to work with state Del. Bill Frick (D–Bethesda) and other state legislators to improve the bill sponsored by Frick that calls for a referendum so voters can decide if the DLC’s monopoly should remain.
The chamber officials wrote that they believe Frick’s bill could be amended in time so that it could pass in the 2016 session, which is scheduled to end in April.
“If we can figure out the revenue piece, maybe we can all get on the same page and end this monopoly,” Heather Dlhopolsky, chairwoman of the Bethesda-Chevy Chase Chamber of Commerce, said in an interview Monday.
She said if Frick’s bill were passed in this year’s session there would still be two years to figure out how to replace the DLC’s revenue and figure out how to implement privatization before the monopoly would end under the proposed legislation in 2018. She said if Frick’s bill doesn’t pass, then the chambers would continue to work with the county on the revenue question with the goal to get legislation passed in 2017.
Frick said in an interview Monday that he isn’t sure what kind of support there is for his legislation among local legislators, but said Leggett’s letter creates a big shift in the debate.
“I think the important message is the county executive is on board with transformational reform and that’s great,” Frick said. “I think what this ultimately means is transformational reform is coming, it’s not a matter of whether, it’s how and when.
“I want to get this done and I think delay isn’t in the interest of the business community and consumers,” Frick added. “Hopefully this kicks the conversation into high gear to get things done.”
Frick said he’s working on a companion bill that could potentially address the revenue question. He said having the county continue to operate the stores, selling off county assets and repatriating new sales tax revenue to the county may be ways to offset revenue losses that would result if the DLC's monopoly was eliminated.
County Council member Roger Berliner, the lone council member to support ending the monopoly, said Leggett's willingness to discuss more significant reforms is an opportunity to bring about change.
"The county executive has made it clear he's not willing to do it this year, although many of us thought it could be done this year," Berliner said. "But if he's willing to be a constructive partner and in return for that partnership we must wait a year to move forward, I think that's a proposition that warrants very serious consideration by our state legislators."