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Liquor dept. not leaving in tight ‘16 budget for county

(March 13, 2015) A majority of county commissioners have confirmed that, while appearances aside, the Department of Liquor Control is safe for the time being and will continue to operate through the next fiscal year.

Its saving grace? Solvency. The department turns a profit, and with the county struggling to maintain current-year funding totals in the face of what sources are estimating to be at least $5 to $6 million in increased expenditure requests, that counts for a lot.

It’s also not as easy as flipping a switch to shutter the department. There are county employees to consider as well as property, both leased and owned, plus stockpiled inventory.

“It could cost us money to get rid of it, “ Commissioner Ted Elder said, noting that if the county were to dismantle the department over time it would be more likely to afford the expense.

“The commission voted 4-3 to let it operate for another year. We kicked the can down the road and cost the taxpayers more money,” said Commissioner Joe Mitrecic, the most vocal opponent of the department in public settings.

For many years, county employees had been working under the assumption that 2015 was going to be the “bottom of the trough,” as County Treasurer Phil Thompson said during his recent revenue report to the commissioners.

The assessments have not borne out that contention.

“Ocean City in many ways sets the trend because it’s upwards of 60 percent of our total assessable base. Certainly in 2010 we knew what was happening with the national recession and the whole housing bubble burst. Again that occurred in 2013 as well, and now we’re rolling into the third cycle where Ocean City has been reassessed with declining assessments,” Thompson said in a previous interview.

Ocean City’s next assessment won’t hit the books until 2019, where all eyes will be upon it.

“In the broadest of strokes, we have some heavy lifting to do,” Commissioner A. Chip Bertino said, adding he thinks the department should be phased out when it can be done responsibly.

“There are no easy decisions or choices. The commissioners and the county need to be prepared for that,” Bertino said.

“This department has been around a long time. There is no question a lot of issues and a lot of things going on with the old Liquor Control Board that, no question, shouldn’t have been going on,” Liquor Control Board Director and former County Commissioner Bobby Cowger said.

“If I had been a licensee at the time, I would have been on board with them screaming and hollering.”

But Cowger said all of that has changed under his leadership.

“One thing about this department is it’s 100 percent self-sufficient. There’s not one penny of the tax base that’s put into this department. This is the only department in the county that is that way,” Cowger said.

Which is its own kind of trouble.

“This department is different. We have to make a profit. If we don’t make a profit, then the taxpayers eventually will have to put money into it and I said from day one, and I’ve always said it: When this department gets to the point where it has to take taxpayers’ money then it’s time to go. No question,” Cowger said.

Due to the law change last year, liquor license holders were given the opportunity to buy spirits from wholesale distributors, rather than having to deal exclusively with the county dispensary.

As a result, the Liquor Control department budgeted a 25 percent drop in business. In September 2014, at the end of the first quarter after the law change, Cowger said, the department was down 38 percent.

“Thirteen percent over what we predicted was almost $2 million,” Cowger said, “We started reacting then.”

Cowger estimated the total loss of business at 37.6 percent for the department at the end of 2014, stopping the bleeding perhaps, but enough to raise some eyebrows.

In order to avail themselves of the two wholesalers in the region, licensees needed to tender a letter to the county stating their intention.

“Out of the 208 licensees, 160 sent letters. None of them wanted to leave us completely,” Cowger said. The licensees wanted the option to use the wholesalers, but didn’t want to leave the county system entirely, Cowger said.

“If we go away, there’s still a monopoly. A lot of the bars thought they could go anywhere to purchase their liquor and sell it in their bars, well, that’s not so,” Cowger explained, “and they’re finding this out.

“If you want Crown Royal to sell without us, you have one option, Reliable Churchill. You can’t buy Crown Royal from anywhere else. Whatever their price is, that’s what they’ve got to pay.”

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