Only one spoke in favor of privatization
By L.A. Williams, Correspondent
Christian Action League
To hear audio of Rev. Creech’s speech before the committee click here
RALEIGH — North Carolina’s ABC system may not be perfect, but it is certainly worth keeping, according to more than two dozen speakers who addressed the Legislature’s Joint Study Committee on Alcoholic Beverage Control on Wednesday, many of them praising the control system for keeping consumption low, revenue high and much of the decision-making at the local level.
“One of the most encouraging aspects of this meeting was that so many stakeholders — from healthcare, law enforcement, social services, local government, the faith community, virtually all aspects of our society — endorsed the idea that North Carolina must maintain control of spirits,” said the Rev. Mark Creech, executive director of the Christian Action League of North Carolina. “No one denied that improvements are needed, but the message was clear that privatization is not the answer.”
Convening for the second time on its quest to compile a report for lawmakers by early May, the study committee first heard Jon Williams, chairman of the state ABC Commission, give his synopsis of the system whose mission he defined as “public health, public safety and fair commercial regulation of the alcohol industry.”
Williams said North Carolina, whose model of liquor stores operated by local boards is unique, must choose “deeper local control or more state control” to combat problems of lack of oversight, cannibalization of sales and inefficiencies. He said mandated mergers to reduce the number of boards, now at 163 and growing, to one per county would lower total operating expenses and make it easier to keep tabs on the boards and that an integrated Information Technology system would improve financial transparency. Responding to recent media reports about outrageously high manager salaries, Williams said a salary scale could work if the state Commission is given more authority. Citing recommendations from a 2008 Program Evaluation Division (PED) study, he also suggested that agency stores could be used to sell liquor in rural areas where an ABC store might not be profitable.
But the Rev. Creech and many others were quick to point out the problems that would accompany such a set-up.
“An agency store is a privately owned and operated retail outlet that would contract with a government entity to sell liquor, ” explained Jon Carr, legislative counsel for the North Carolina Association of ABC Boards. “… Local voters did not vote to allow spirits to be sold in private retail establishments for off-premises sales, only through ABC boards.”
He said that although the PED recommendation is to use agency stores only in areas that could not support an ABC store, the practice would lead to efforts for spirits to be sold in all jurisdictions by private sellers and not just rural areas.
“Even if we only partially privatize, with the use of agency stores, we can expect other retailers to feel that they are at a competitive disadvantage because a retail establishment in their community can sell liquor and they can’t,” added Creech. “Business interests will constantly be pressuring lawmakers to privatize even more so they can get a slice of that pie.”
Andy Ellen, lobbyist for the North Carolina Retail Merchants Association and the lone speaker favoring privatization, challenged the committee to step back and consider that wholesale and retail spirits are the only part of the industry not privatized in North Carolina.
“There are already some 5,000 private entities that pour mixed beverages in the state and yet we are saying that a responsible entity like a grocery store is not responsible enough to provide that same service?” he asked, comparing liquor to commodities such as medication, tobacco, fire arms and lottery tickets, all sold by private retailers.
But Phil Mooring, chairman of the North Carolina Substance Abuse Prevention Providers Association, warned against the slippery slope of privatized sales.
“There is no chance that if we were to move from a control state to a license state that we would ever revert to a control state again,” he said. “As we say down East, you can turn a cucumber into a pickle but you can’t ever turn a pickle back into a cucumber.”
Mooring was one of a string of health and human service advocates, including a handful of high school students, who told the committee that the misuse of alcohol — underage drinking, driving while impaired, alcohol abuse — is doing enough harm in North Carolina without the increased availability that privatization would bring.
Representatives from a number of non-profit agencies as well as local government officials urged the committee not to overlook the importance of the revenues they are afforded through their area ABC Boards. Not only does the current system pour more than $167 million into the N.C. General Fund, but more than $50 million goes to cities and counties, local alcohol education, local law enforcement and rehabilitation, with another $1.3 million earmarked for the Department of Health and Human Resources.
Mount Airy City Commissioner Teresa Lewis told the committee that losing these community benefits would impact substance abuse organizations, the arts, parks and recreation, the public library and could lead to increases in the city’s tax rate.
In addition to concerns about potential loss of revenue and increases in crime, the Legislative Committee heard law enforcement officials call for more local involvement in ABC issues, not less.
Michael Yaniero, Chief of Police of Jacksonville and a member of the N.C. Metro Coalition of Chiefs of Police, said more emphasis should be put on local option forms completed by local police departments with regard to alcohol sales permit requests.
“Oftentimes, over our objections, permits are granted to establishments resulting in a number of quality of life issues that police officers on the street have to address,” he said.
Officials from Wilmington talked about problems there with late-night violence and the need for more enforcement of alcohol laws inside and outside of drinking establishments, including some 60 or so mixed drink outlets all in close proximity.
Karl Knapp, director of Research and Policy Analysis, for the N.C. League of Municipalities said some changes may be needed because of recent practices of a small number of ABC Boards, but that the system is fundamentally sound and that profitability is only one consideration that must be balanced with a number of concerns.
The Rev. Creech urged the Joint Legislative Study Committee chaired by Sen. Don Vaughan (D-Guilford) and Rep. Ray Warren (D-Alexander), to keep some very basic but important ideas before them as “sift through the mounds of information and make recommendations that will affect many lives.”
“The primary purpose of ABC in North Carolina has traditionally been about control and regulation — not profit,” he said. “Let these two principles be your compass through this maze of information: Control over profit; efficiency over revenue.”
The committee will meet next in Raleigh on April 8 at 2 p.m.