Program Evaluation Division report to be basis for ABC change debate (Wilmington Star News)
State leaders plan to use a year-old evaluation report as the starting point for discussions on reforming the N.C. Alcoholic Beverage Control system.
The December 2008 report from the legislature’s Program Evaluation Division recommends a number of reforms for the alcohol system – which the report called “outdated” – and suggests the state explore other options for handling liquor, including privatization.
But officials say that would be a complex undertaking that shouldn’t be rushed. So while some ABC reform will likely happen after legislators head back to Raleigh in May, privatization probably won’t.
“I would be surprised if we could have an intelligent, instructive debate on it in 45 days,” said Rep. Pryor Gibson, a Democrat who has worked extensively on the state liquor laws, and despite recent problems, believes the ABC system works well for the state.
“Privatization is a big word,” he added.
Two groups – Gov. Beverly Perdue’s Budget Reform and Accountability Commission and a soon-to-be-formed legislative study committee – are looking into reforming the current system, with an eye to correcting some of the pay and ethics scandals that erupted in Wilmington and Charlotte in recent months.
Norris Tolson, co-chairman of the governor’s budget committee, said the 2008 report will likely be a centerpiece of the committee’s recommendations, which are expected in March.
That report said the ABC system needs to be modernized, specifically by better defining the missions of local boards (are profits or “controlling” sales more important?) and giving the state commission authority to set performance standards and work with local boards to increase profits.
Tolson said the governor’s committee is studying privatization, but it “has no legs under it at this point.”
Schorr Johnson, a spokesman for Senate leader Marc Basnight, said the 2008 report will also be the “starting point” for legislative efforts to reform the ABC system.
Johnson said Basnight has been working closely with House Speaker Joe Hackney to put together a study committee, and that appointments will likely be announced in a few weeks.
“Reforming the ABC system is a priority for Sen. Basnight in the short session,” he said. “He wants to look at having more oversight at the very least.”
But is privatization even politically feasible?
North Carolinians are divided whether they want privately-owned liquor stores on their street corners, according to a recent poll by the Civitas Institute.
The poll surveyed 600 likely voters, and 47 percent said keep the ABC system and 44 percent said liquor sales should be privatized, according to the results. Of those surveyed, 9 percent said they were not sure. The margin of error was 4 percent.
While many residents in Wilmington – where people are outraged by high salaries and bonuses for local ABC leaders – may clamor for privatization, there are many parts of the state that support the “control” aspect of the system, believing it helps prevent underage drinking, drunk driving and other social ills caused by alcohol.
“You cannot paint all of North Carolina with the same ABC brush,” Gibson said. “There’s not going to be any way at all to get a one-size-fits-all solution to this.”
Others support control for religious reasons.
Rev. Mark Creech, director of the Christian Action League of North Carolina, said he will fight to protect the ABC system from privatization.
North Carolina ranks 45th out of 50 states in per capita alcohol consumption, but ranks 7th in revenue generated by liquor sales, according to the ABC system’s annual report for 2008. That’s worth saving, Creech said.
“I don’t think we could have a better system than what we’ve got that strikes that balance between providing revenue for the state and also protecting the public health,” he said.
He doesn’t think privatization will be seriously considered in 2010, but it could become a major issue in the future.
Some say the largest barrier to change is plain and simple politics.
“The major obstacle to privatization is local political pull,” said John Hood, president of the John Locke Foundation, which supports privatization.
State government gives the more than 160 local ABC boards wide latitude to operate as they see fit. In many ways, local governments have much more sway over their liquor stores because they appoint the local boards.
In addition, local governments get a cut of ABC profits, which helps elected leaders at budget time when they are forced to consider unpopular tax increases.
While local governments in other states get alcohol money too, and Hood and other privatization supporters say North Carolina could devise a system to keep money flowing to local governments, any changes that create the perception that locals could lose money would make it difficult, if not impossible, for local politicians to stomach.
“Many local governments believe they get more revenue because of the control system,” Hood said. “I think its more perception than reality.”
What’s clear is that both supporters and opponents of the control system will be paying close attention. While proponents don’t believe there’s enough support to tear it down, privatization supporters say refusal to take up the issue would be a missed opportunity.
“Fundamentally, North Carolina government should not be in the liquor business,” said Hood. “What you get right now is poor service, high prices and political corruption.”
Staff writer Shannan Bowen contributed to this report.
Chris Mazzolini: 343-2223
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By Chris Mazzolini
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Published: Saturday, February 6, 2010 at 3:30 a.m.
