By Liz Holland

The future of Wicomico County’s liquor dispensary system will be debated again this week as County Council members must decide whether to proceed with introducing legislation during the current session of the Maryland General Assembly, or wait until 2024.

A decision was expected to be made during Tuesday night’s council meeting, where members will be able to view a draft bill.

At issue is whether they want local lawmakers to introduce enabling legislation that gives power to the county to craft its own rules over liquor stores.

County Executive Julie Giordano has proposed a hybrid system for the county that would leave the dispensary stores in place, but put it under local control and allow for the addition of private liquor stores.

Currently, the county system is operated by the Liquor Control Board with members appointed by the governor and overseen by the State Ethics Commission. The board controls three stores and hires its own employees. Although the board doesn’t answer to the county, it turns over financial reports and profits to the local government.

At a Jan. 17 work session, council members appeared to be split on which route to take, with some urging a cautious approach that includes further study and public input.

Council President John Cannon – a longtime proponent of privatizing liquor sales -- said he wanted to see a draft bill before the council votes to send a letter of support.

Others, including Councilman Josh Hastings said the county should wait a year until there is a solid plan in place, otherwise the bill will likely fail.

“I think we need to tread lightly,” he said.

 Further study

 Putting the issue on hold for a year also has the backing of Bill Chambers, President and CEO of the Salisbury Area Chamber of Commerce.

Introducing a bill this year is premature, especially since there are too many unanswered questions and some hesitation among council members, he said,

“This is not rocket science,” said Chambers, who is promoting a plan to put together a panel of stakeholders to iron out how a hybrid system of private and county-owned stores would work.

Liquor bills are viewed differently than other local legislation in Annapolis, and they frequently fail when there is not 100 percent support.

“It needs to be clean, tight and have everybody on board,” Chambers said.

State Sen. Mary Beth Carozza, a Republican who represents Wicomico, agrees that liquor bills face steep hurdles in Annapolis.

“I have experience on committees that consider these types of legislation,” she said. “I have learned there are no simple alcohol bills.”

Putting together a panel to study the issue is not a new idea in Wicomico County. In 2008 a review committee appointed by the County Council recommended numerous changes, although none were acted upon.

One issue the 2008 panel looked at was how to replace the lost revenue from the dispensaries, which averaged more than $1 million a year that was turned over to the county over the past two years. The committee at that time thought some of the money could be recouped by a license fee restructuring.

The committee recommended the county introduce legislation to allow or a binding referendum, saying the system is “an autonomous monopoly … not in the best interests of the public.”

However, County Council members voted 6-1 the following month against a referendum, saying the issue needed more discussion.

 Dispensaries

 Liquor dispensary systems were put in place after the end of Prohibition and they once operated across the state of Maryland. Wicomico is now the lone county on the Eastern Shore that has not replaced its system with privatized stores.

Last year, Somerset was the most recent county to make the switch. Worcester County also changed over to private liquor stores in recent years. Dispensary systems in both of those counties were phased out following incidents of mismanagement and theft.

But corruption and scandal are not the case in Wicomico County where members of the Liquor Control Board point to a well-run system that makes a handsome profit for the county.

“Each and every year, we’ve increased the amount of money to the county,” said Board Chairman Don Ewalt.

If the county decides to operate a hybrid system with both county and private stores, the dispensary will be forced to go back to selling beer and more wine to make up the money, he said.

Currently, private stores in the county can get licenses to sell beer and wine. There are also three private stores that are allowed to sell hard liquor because they are attached to restaurants with liquor licenses.

Justin Collis, General Manager of the dispensaries, said some restaurant and bar owners are under the impression they can get a better price by buying alcohol through distributors rather than the dispensary.

That is especially true for a small bar or restaurant that may only purchase a few bottles at a time. As an example, Collis said a 1.75-liter bottle of Crown Royal costs them $48.44 if purchased through the dispensary. If they buy it from a distributor, it will cost $49.49 per bottle, plus a $1.55 bottle charge if they don’t buy a whole case. They can save $2.60 per bottle by purchasing through the dispensary, he said.

Some local restaurant and bar owners who attended the Jan. 17 council meeting dispute Collis’ claim. Tom Knorr, who with his brother owns Evolution Craft Brewing and several other local restaurants, said he pays 15 percent more on every bottle than businesses in Somerset and Worcester counties who are able to buy alcohol directly from distributors.

“We’ve got a competition problem here,” he said.

The Liquor Control Board has been absent from discussions about changes to the system, and they plan to oppose any legislation introduced this year. Ewalt said board members will go to Annapolis along with their attorney, auditor and business supporters if necessary.

The board’s accountant sends monthly financial statements to Giordano’s office, but Collis said the executive’s office keeps asking for customized reports that his accounting software is unable to produce.

“My system is designed to run a business, not help fishing expeditions,” he said. “They’re saying, ‘give me your bullets so I can shoot you’.”

According to numbers provided by the dispensary, the alcohol revenue contribution to county coffers has been $3.65 million over the last four years, ranging from an annual low of $666,400 in 2018, to an annual high of $1.094 million in 2020.

Carozza/Mautz bill

Alcohol legislation in Annapolis falls under the purview of the Senate Finance Committee, on which District 37 Sen. Johnny Mautz serves. Carozza and Mautz co-sponsored a bill that would change Wicomico’s system, but the measure was pulled because it didn’t reflect the direction the County Executive and County Council want to go on the matter – which is still in discussion.

“The current Executive and Council President have a shared interest in moving toward privatization,” said Carozza, who said a December meeting between county officials and the Eastern Shore Delegation made it “clear a lot of details had to be worked out” and it “was unclear if those details could be worked out in time for session,” Carozza said.

But, the senator said, she introduced the measure to allow support to be tested in Annapolis.

“There was a bit of a miscommunication,” she said last week. “I elected to drop the bill and use it for groundwork if we wanted to move toward privatization this session.

“The consensus came back that this (bill) was not the best vehicle,” she said.

In the last General Assembly session, Carozza was the sponsor of a bill that eliminated the dispensary system in Somerset County.

“The interest had been there for a while in Wicomico, but picked up when I introduced the Somerset bill,” she said. “Businesses who purchase alcohol know it’s unfair for them when they see their neighbors across the state have the opportunities they don’t have. I would encourage all parties to operate in good faith while working on this.”

She added: “Some of these issues take more than one session to work through. I truly believe these issues – whether it involves stores, employees, revenues – can be worked through. It’s been done in other counties with success.”

Questions remain

Throughout the discussions, numerous questions have been raised, including whether the privatization of liquor sales – and the potential loss of annual revenue to the county – would affect the state’s disparity grant to Wicomico.

The county and other less affluent jurisdictions in Maryland are awarded the grants annually. Wicomico usually receives around $12 million. Some have suggested that if Wicomico gives up its dispensary proceeds, it could signal to the state that the county can get along with less money.

However, Bunky Luffman, the county’s Director of Administration, said nothing is likely to change. Somerset County closed its dispensaries last year and it didn’t affect the disparity grant there, he said.

Some County Council members also questioned how licenses would be granted and where stores would be located.

The original proposal from Giordano was to allow 10 private stores – two per council district – but Chambers said a better way might be to take population and distance between stores into consideration instead.

There also is the question of how proposed changes would affect the three existing private stores that are attached to restaurants.

Bruce Abresch, owner of Buster’s Wine & Spirits on Nanticoke Road, raised the question during the Jan. 17 County Council meeting, and wondered if his store would be counted among the 10 that will be allowed countywide.

In addition to Buster’s, there is a private store attached to Hopper’s Tap House at Route 13 and Dogwood Drive in Salisbury and another at Boonies Restaurant in Tyaskin.

Carozza said these and other issues might take more than one session in Annapolis to work through.

“My hope – because there are a lot of details to work out – is that all parties can work through it,” she said. “It can be frustrating because you think you have it all teed up, but then new details arise.”

The dispensary board and their attorney were scheduled to appear at the County Council’s Tuesday night meeting to argue their stance that the system should be preserved as is.