By L.A. Williams, Correspondent
Christian Action League
RALEIGH — The state ABC Commission would have more authority, local ABC boards more accountability and the ALE more funding under a bill being drafted by the Joint Study Committee on Alcoholic Beverage Control which expects to present it to lawmakers next month.
The 28-member committee on Thursday heard a detailed explanation of the State Government Ethics Act (SGEA) and of ethics laws that already apply to local ABC Boards. The draft legislation would make members of the local boards subject to the SGEA, would limit their compensation to $150 per board meeting and their travel rates to those consistent with the State Budget Office. They would be prohibited from hiring or supervising close relatives and would have to meet specified training standards. They could also face having their board merged with another and its assets seized by the state ABC Commission if they failed to meet performance standards — including profitability targets.
“There are many good requirements in this proposal, many safeguards that will help to standardize how boards function across the state. However, we must keep control — and not profit — the top ABC priority,” said the Rev. Mark Creech. “The word ‘profitability’ simply needs to be struck from the draft legislation. It would not be weakened the slightest bit by doing so.”
Rep. Edgar Starnes (R- Caldwell) suggested that problem boards — those that are losing money — should be the target of performance improvement plans without setting target profits across the system.
“I don’t want our focus in the ABC System to be on profitability. I think we still have to make sure that there is control,” he said. “If boards have to meet a profitability threshold their goal is going to be to sell more alcohol.”
Mikael Gross, committee co-counsel who explained the proposed bill section by section, said that requiring stores to be more profitable wouldn’t necessarily mean that they would be forced to increase sales, since decreasing costs and operating expenses could also lead to a larger profit margin.
The most recent version of the bill does not include a required 5 percent profit margin before board members are paid as had an earlier draft but would leave it to the three-member ABC Commission to establish performance standards for profit, store appearance, operating efficiency and customer service as well as enforcement of ABC laws.
To help with the latter, the draft calls for all local ABC boards to transfer monthly 2 percent of gross receipts to the Alcohol Law Enforcement Division.
“My initial feelings about this are that ALE is already stretched to the limit and need additional funding, resources and personnel to effectively do their job,” Rev. Creech said. “Plus a more uniform approach to enforcement will provide less potential for corruption on the local levels.”
In addition to alcohol laws, ALE agents enforce rules regarding boxing, bingo and lottery.
The proposed bill draft would set annual salary limits on ABC general managers ranging from $82,401 for counties with populations of less than 100,000 to $112,607 for those with 250,000 people or more.
Additionally, the proposed bill would raise the threshold for ABC store elections from 500 registered voters to 5,000.
“Without this voter threshold change, new ABC stores will continue to spring up that don’t have communities large enough to support them,” said the Rev. Creech. “Moreover, new stores will be approved that create the necessity for more ABC boards, producing unnecessary competition between them and their stores.”
Rep. Pryor Gibson (D-Anson) spoke against the change saying that it was unfair to the majority of towns in his district, which would fall below the voter population requirement.
“It’s just not fair to penalize a county because, for whatever reason, they happen to be smaller in population,” he said, adding that “big doesn’t always mean best” and asking how legislators would explain the provision to towns that have 4,999 voters and still want a store.
“We draw lines in the sand every day,” Starnes countered. “If you look at the fiscal report, the systems that are losing money are usually the very small towns with very small stores. Just because a community of 500 can’t vote in an ABC store doesn’t mean that they are not going to have access to alcohol…. We have to look at what is reasonable and profitable.”
Already the state has some 165 boards. The General Assembly’s Program Evaluation Division, which deemed the ABC system “outdated” in 2008 had recommended these changes to help prevent new stores from cannibalizing profits of existing ones.
“This is not an issue of fairness. It is about protecting the ABC system by making it more efficient,” the Rev. Creech said. “If this doesn’t happen, the same problems will continue to undermine the ABC system producing a more credible argument for privatization.”
Another change recommended in the bill draft would allow the state ABC Commission to consider the proximity of a new ABC store location to that of existing ABC stores, another way to help prevent too much competition.
Current laws already prevent the location of a store within 50 feet, door to door, of a school, church or daycare. However, many churches and concerned citizens have sought more input into the location approval process. Thanks to House Bill 186, supported by the Christian Action League last session, locations cannot be approved by the local ABC board if they are opposed by the municipality based on information given during a public hearing on the matter.
Karen Gottovi, a former House member and one of a dozen public members on the committee, said local city and county officials ought to have input into location of mixed beverage permittees as well, an issue not addressed in the draft.
The Joint Study Committee on Alcoholic Beverage Control, co-chaired by Sen. Don Vaughan (D-Guilford) and Rep. Ray Warren (D-Alexander), will meet again May 5 when it plans to finalize the bill draft and vote on it. The committee is one of a number of bodies looking into ways to improve how alcohol sales are handled in North Carolina, especially after liquor-company dinners in Mecklenburg County and high ABC salaries in New Hanover County came to light last year. The governor has hired a Chicago-based firm to determine the value of the ABC system in case the state decides to sell it. Its report is also due early next month.