By L.A. Williams
Christian Action League
July 26, 2019
On the heels of an omnibus bill (SB 290 – ABC Regulatory Reform) that the Christian Action League considered the worst alcohol proposal in state history, lawmakers are now looking to do away with the entire control system and put liquor sales totally in the hands of profiteers.
The 44-page HB 971- Modern Licensure Model for Alcohol Control was the topic of discussion for the House ABC Committee on Tuesday, with sponsors touting privatization as the way to increase alcohol revenue and eliminate perceived inefficiencies in the current system.
But the Rev. Mark Creech, executive director of the Christian Action League, said even the bill’s name is misleading, since controlling alcohol sales is not its objective.
“The private profit motive by which sales are artificially stimulated has been shown to be the greatest single contributing cause for overconsumption,” Creech said. “Why would we take control of liquor sales from the locals who would be more sensitive to the needs of their communities and put it in the hands of retailers who care largely about only one thing – how much liquor they can sell? That’s exactly what HB 971 would do and that wouldn’t be good for the people of North Carolina.”
Rep. Pat Hurley (R-Randolph) called the measure — which would allow for the permitting of an unlimited number of new liquor “package stores” and let existing retailers of all kinds add alcohol to their shelves — both unnecessary and bad policy. She reminded fellow lawmakers that alcohol is the third-leading preventable cause of death in the United States, that 31 percent of traffic fatalities involve impaired drivers and that privatization would eliminate hundreds of jobs.
Rep. Shelly Willingham (D-Edgecombe) echoed Hurley’s public health concerns and challenged the bill’s sponsors to take a lesson from other states that have given up their control systems with disastrous results.
“If we look at the states that over the years have gone into privatization, they have problems, big problems,” Willingham said. “There’s not one that I am aware of that privatized and ended up better off than they were before.”
Creech said Willingham hit the nail on the head.
“Any proposed licensure plan put forward should guarantee us that it can preserve social welfare better than the current program — not just as good but better. Otherwise, why fix what works?” he said.
Sponsor Chuck McGrady (R-Henderson) said the complex bill was in its earliest stages and not headed to the House floor this session. He claimed that North Carolina is losing alcohol sales to neighboring states and that the state could increase annual revenue by $221 million by 2023 by eliminating local ABC boards and charging higher excise taxes. The fiscal predictions were based on a 20-percent wholesaler markup, a 20-percent retailer markup and, perhaps most disturbing, a 20-percent increase in alcohol sales. General Assembly staff tasked with figuring out the bill’s potential effects admitted that many of their projections were imprecise as they had no way of predicting consumer behavior or sales. Implemented over a two-year period, the measure would require local boards to auction their property and settle debts without any help from the state, a situation that could leave ABC boards in a financial fix, forced to sell property at below what they owe.
The timetable was of great concern to Rep. Allison Dahle (D-Wake), who also worries about the number of liquor stores that the bill would allow.
“Are they going to be on every corner? I am really concerned about marginalized communities that can’t even get a grocery store but I am sure they can slap up a liquor store, because a liquor store only takes a small amount of space,” Dahle said.
Willingham reminded fellow legislators that North Carolina has been a leader in dealing with alcohol issues and that any move to replace the ABC System is a move in the wrong direction.
In fact, North Carolina ranks 44th-lowest in consumption and seventh-highest in revenue of any state in the nation.
“Our current system appropriately balances access and convenience with control,” says Jon Carr, a lobbyist with the NC Association of ABC Boards. “The Program Evaluation Division’s 2019 Report did not recommend privatization. The PED found that among the southeastern states, NC collects the most revenue per gallon, has the lowest outlet density and has the second lowest per capita consumption.”
Carr attended the hearing Tuesday as did many proponents of keeping the ABC control system, but no one outside the committee was allowed to speak. McGrady made it clear that there would be time for public debate as the issue moves forward.
Some of the many statewide organizations that oppose privatization of liquor sales in the state include: Christian Action League; N.C. Family Policy Council; N.C. Association of Chiefs of Police; N.C. Police Benevolent Association; North Carolina State Lodge – Fraternal Order of Police; Mothers Against Drunk Driving; N.C. Association of Local Health Directors; N.C. Public Health Association; National Association of Social Workers – North Carolina Chapter; N.C. Society for Clinical Social Work; North Carolina Association of Campus Law Enforcement Administrators; N.C. Substance Abuse Prevention Providers Association; N.C. Substance Use Disorder Federation; Addiction Professionals of North Carolina; N.C. Alcohol Policy Alliance; Alcohol/Drug Council of North Carolina; Recovery Communities of North Carolina; N.C. Association of ABC Boards and N.C. ABC Law Enforcement Officers Association.
“Social workers, substance abuse providers and so many others see the wisdom of keeping our current control system,” said the Rev. Creech. “Our prayer is that lawmakers blinded by promises of profits that will never materialize will open their eyes. While at times the current system has had its problems, experience demonstrates that it’s flexible enough to ensure its correction when needed. Moreover, it’s zeroed-in on fostering control, moderation and self-restraint, which a privatized or licensure system cannot do to the same degree, no matter how rigid or well-enforced. To throw all of that away would bring grave consequences to the people of this state.”