Candidates for state, county posts discuss abolishing Worcester LCB

(July 23, 2010) With the debate over the future of the Worcester County Liquor Control Board edging closer to the election season, Ocean City Today asked candidates for Worcester County commissioners, state delegate and state senator to outline their positions on the issue.

They were asked if they supported abolishing the LCB if the current audit and investigations turn up wrongdoing and if licensees produce a plan to make up lost revenue. They were also asked for their position if these actions by the state comptroller’s office found no wrongdoing.

Worcester County Commissioner candidates

z John Bodnar (D), District 5: If the allegations of price discrimination are determined to be true, then it only confirms that the organization (LCB) has outlived its usefulness and needs to be abolished. Just as important, the Worcester County Beverage Association (licensees) would need to come up with an equitable system to make up for lost revenues to the county without creating another bureaucracy.

My response to your second question is yes. The Liquor Control Board is a quasi-governmental monopoly. Abolishment of the LCB would help the hotel and restaurant industry with their profit margin as well as lower prices for retailers and consumers overall. When an industry lowers prices on their products it tends to stimulate consumer demand, and consumer demand creates new business and more jobs!

z Judy Boggs (R), District 5: I believe it is premature and presumptuous for any elected official to even discuss abolishing the Liquor Control Board prior to obtaining and examining all the pertinent information, including the results of a current audit. But even the results of an audit are only one part — although a major one — of the information needed to resolve this controversy.

At issue, too, is not only the perceived “unfairness” of the system, but also the considerable funding the LCB contributes annually to the operating budgets of Ocean City, Snow Hill, Pocomoke City, Berlin and Worcester County. First, we must wait, and not “rush to judgment” until all of the information has been received, including whether or not there has been wrongdoing; whether management mistakes (if any) can be corrected satisfactorily; and, if abolished, how the LCB revenue for the towns and the county could be made up.

When all this information has been received, I think it should be disseminated to the citizens of Worcester County. Then, as has been done twice in past years, I believe the citizens of Worcester County should be given a “say” on this issue via referendum before anyone asks the state legislature to disband our Worcester County Liquor Control Board.

Requesting a state audit is appropriate since this is a state agency, and a thorough audit will probably will take some time to complete. A state audit is certainly critical in making an informed decision, as are the other issues I mentioned. For elected officials to be taking a stand for or against abolishing the LCB is inappropriate at this early date; and, further, I believe that politicizing this issue is not conducive to a fair evaluation and decision.

z Madison “Jim” Bunting (R), District 6: I would support abolishing the LCB either way, but it should be decided by a referendum of the voters.

z Linda Busick (R), District 6: I believe a review of all available facts and results of an internal audit are needed prior to making a determination to abolish the Liquor Control Board.

Perhaps the Liquor Control Board could be restructured, rather than abolished. Their mission statement should be revised to focus on education and enforcement to protect the health, welfare and safety of our citizens. They should discontinue selling liquor, putting an end to the post- prohibition era sales practice which is now antiquated. Their warehouse could be sold to generate additional funding for the county.

z Bud Church (R), District 3: We need to see where the investigation is going at this time. There are a lot of unsubstantiated allegations. I would encourage everyone to let the smoke clear, let the dust settle. Based on findings, I would make a decision at that time, after the finding of facts.

z Ellie Diegelmann (D), District 7: In either case, it necessarily depends mostly on authenticated documents like their charter or establishing ordinance and any operational guidelines. This is an excellent opportunity for government transparency and disclosure. Comparison to possibly other county’s LCBs will be infinitely more enlightening that we know.

z Ted Elder (R), District 4: As a candidate for county commissioner, I have been looking at this subject with more than a passing interest.

[It is correct to ask] for an audit to identify any problems with the administration of the LCB or any wrongdoing on the part of any employees. Delegate [Jim] Mathias wants to abolish the LCB. He is wrong to try to throw out the baby with the bath water.

The article in OC Today stated that the lost income to the county could be made up by fees based on volume of liquor sales. I wouldn’t be surprised to see a drastic drop in the total sales reported by these businesses when there could be no accurate way of checking on total sales.

The county is short on revenues al-ready. I only see abolishing the LCB as exacerbating this already serious problem.

z Louise Gulyas (R), District 7: It should be abolished whether they did right or wrong because I don’t think the county should be in the liquor business. It’s private industry and the LCB has overstepped their boundaries. It’s outlived its usefulness.

z Edward Lee (D), District 2: It is obvious that modifications to the mission of the Worcester County Liquor Control Board [LCB] are long overdue. As your county commissioner, I will introduce a resolution to be adopted by the Worcester County commissioners requesting the Worcester County delegation to the House of Delegates and the Senate of the state of Maryland to introduce legislation that would fundamentally change the mission of the LCB as follows:

1. The LCB’s exclusive right to sell alcoholic beverages to all bars and restaurants will be eliminated. Instead, the LCB will be just one of the options that will be available to private enterprise. The impact of this change will be to increase the efficiency of the LCB by forcing it to compete for business against privately owned distributors and will concurrently allow the owners of bars and restaurants throughout the county to continue to purchase their needs from the LCB should they so desire.

2. In the event of a drop off in the historical LCB revenue returned to Worcester County’s general operating fund and so that the budgets of Worcester County and its four incorporated towns [Ocean City, Berlin, Snow Hill and Pocomoke] are not negatively impacted, the license fees of private enterprise will be adjusted from time to time.

This important change will thus guarantee a steady revenue stream for both the county and the incorporated towns within the county and eliminate the “roller coaster” effect the wide swings in yearly revenue received from the LCB the towns and the county government have had to endure.

3. No change will be made to the LCB’s mission of owning and managing the countywide retail store system thus providing continued employment opportunities for all existing LCB personnel.

4. The above will be introduced to the newly constituted county commissioners immediately after the election in November and assuming ratification by a majority of the county commissioners, and the cooperation of the delegation to the General Assembly, a bill could be enacted into law during the second quarter of 2011.

z James Purnell (D), District 2: No. If there are any problems, let’s see if they can be resolved. If you dissolve it, you’d put people out of work. We need to do what we can to keep people working. I believe it can work out.

z Bob Thompson (R), District 5: I have been gathering information about the LCB and its role within Worcester County. I have also spoken to several business owners and public officials to gather their input as well. I do believe it is best to limit government intrusion into business. With that being said, I am sure those that created the LCB had sound reasoning.

The question for me is whether the LCB meets the needs of Worcester County today? I am not sure that it does. I will continue to do some more research before firmly stepping down on one side or the other.

z Tommy Tucker (D), District 4: It may very well be that the WCLCB has outlived its usefulness, particularly in view of recent revenue shortfalls. I was very disappointed at the unrealistic salary increases and bonuses that were given to a select few, especially when county employees have not had a raise in over two years.

I feel very strongly that accountability should be demanded regarding pricing inconsistencies and if the audit reveals wrongdoing then massive overhaul is needed. I do feel that before discontinuing the LCB that a sit-down involving license holders, commissioners and the appropriate state legislators be scheduled for the purpose of creating a plan that will restore monies that the county previously received. I also feel that if wrongdoing is determined, appropriate legal action should be considered and restitution be made.

z Virgil Shockley (D), District 4: If the audit shows improper use of funding, then those responsible should be held accountable by law.

z Larry Ward (R), District 1: I do not support abolishing the LCB at all.

Delegate candidates

z Kaye Kenney (R): I support legislation to abolish the liquor dispensary system but not on the backs of the business community. The dispensary system is an archaic system that has long outlived its usefulness. It should not be the responsibility of the business community to find the replacement revenue.

If I am elected and the Worcester County Commissioners requested legislation to abolish the dispensary system, I would support abolishing the present system with or without financial wrongdoing. All license holders are re-sponsible to live within the Alcohol and Tobacco Law Article 2B, however, no one has the authority to issue a show cause hearing if the government-run stores sell to a minor or violate the law in another fashion. As the system exists at this time, there is not any authority for checks and balances. This type of situation has the potential to breed corruption.

z Mike McDermott (R): It is prudent to wait on the outcome of any investigation before determining a course of action. It is premature to pronounce a sentence before hearing all of the facts.

The voters wanted the LCB to continue operating in 1998. If elected, I will offer legislation in the House of Delegates to place the matter back before the voters in Worcester County, no matter the outcome of the investgation.

z Marty Pusey (R): It’s my understanding that audits are routinely conducted by the Comptroller’s Office. Obviously, even in this economy, information needs to be gathered to determine why the revenues from the LCB have so significantly diminished over time. As a quasi-public/private entity, it benefits from both worlds. The citizens of Worcester should be the ones to decide which it should be.

I prefer private sector driven businesses/ services when it does not harm the public interest. This allows entrepreneurs to invest their money, which ensures that they will work hard to garner a return. Having served on the Worcester County Drug and Alcohol Abuse Council for 20 years, there must be vigilance to assure that alcohol does not get into the hands of minors. Also, with Worcester having a high unemployment rate, the impact on existing jobs would need to be addressed as well. This is an issue that requires additional exploration and citizen decision-making.

z Joe Schanno (R): Concerning the comments made by Delegate [Jim] Mathias, it appears that the delegate has made a decision - not to make a decision before the election on the future of the Liquor Control Board. The question has been passed on to the state comptroller for an audit. Why? As reported, the delegate stated that he would move to abolish the LCB if the complaints against it prove true in the audit. I disagree with the delegate. The decision does not have to await the results of an audit.

The real question is, should Worcester County be in the commercial business of wholesale and retail liquor distribution? I do not find a compelling reason for the continued existence of the LCB. I agree with the membership of the Worcester County Licensed Beverage Associa-tion and Mayor Rick Meehan, among others, that the LCB should be abolished.

In making my decision, I am not attempting to judge the conduct of the LCB. Delegate Mathias believes that wrongful conduct could render the LCB obsolete, outliving its usefulness. If this was the standard, the unlawful conduct of a few persons would have destroyed many valuable and necessary organizations. A majority of Maryland counties leave the wholesale and retail distribution of liquor to private businesses governed by regulations to protect the public from harm and nuisance that could be caused by the trade.

The operations of the businesses are left to individuals who assume the risks, losses and profit of their decisions. In the case of the LCB, the taxpayers of the county are on the hook. Right now, the county and local jurisdictions are receiving declining revenues while LCB expenses grow, even though the LCB complains sales are off. If it was a private business the LCB would be forced to restructure, or close, at no expense to the taxpayers. If LCB sales and performance continue to decline should the taxpayers have to pay for another bailout?

The members of the Worcester County Licensed Beverage Association should be allowed to make their own commercial decisions and deal as they wish with any licensed wholesale distributor. Bars and restaurants in 19 other counties and the city of Baltimore operate in this matter, without an apparent ill effect to the local jurisdictions.

The primary objective for regulation of the sale of liquor, beer and wine is to protect the public from harm and nuisance that could be caused by the misuse of alcohol. These responsibilities are not within the jurisdiction of the LCB but with business licensing and law enforcement. These functions would not be affected by the abolishment of the LCB.

z Gee Williams (D): Yes, I support Delegate Mathias’ plan to introduce legislation to abolish the Liquor Control Board, (LCB) but my support is absolutely dependant on the Worcester County Licensed Beverage Association (WCLBA) formulating a plan that guarantees Worcester County and the municipalities to permanently receive revenue that is equal to or greater than the current contribution under the LCB system.

As the mayor of Berlin, I am intimately aware of how important this revenue is to Worcester County and all four municipalities. There is no reason why the WCLBA should not be able develop an alternative that puts this important local industry in the hands of private enterprise, where it should be, while also helping to protect an essential source of public funding that is used exclusively to help meet local needs.”

I would be shocked and surprised if the audit turns up wrongdoing. From the information that has been published to date, it appears more likely the LCB’s troubles result from questionable management decisions. From my view, it seems like the LCB has gotten into this mess by trying to force an out-of-date system to work in the highly competitive business climate of the 21st century.

Yes, I would support state legislation to abolish the LCB, even without any finding of wrongdoing, so long as it includes an ironclad plan for replacing revenues that are equal to or greater than those that have historically been received by Worcester County and the municipalities.

Senate candidates

z Michael James (R): The financial statements, the county audit, the compliance audit from comptroller’s field enforcement division, and the investigation report from the comptroller’s office are all important. It is my understanding they all should be available in August. The LCB has been a hot and emotional topic recently, but we need to be fair and examine all the facts.

My point is that potential legislation may not be based just on the results of the compliance audit that was requested by the assigned investigator. There are other factors to consider, and in fairness to all parties, each should be reviewed. For example, if the compliance audit is deemed satisfactory but the final investigation report reveals gross negligence and illegal dealings on other issues, then I would introduce legislation based on those findings, even though the compliance audit was OK.

If, in fact, the comptroller’s compliance audit finds serious breaches, that would also be cause for legislation in my opinion. The financial statements are also very important and will determine the level of efficiency, which may be very good, but we need those numbers to determine that.

If I do introduce legislation, I will not leave it up to the business owners to develop a plan to address replacing revenues. That is not their job. Ideas and/or a proposal from the industry would be encouraged and welcome, but we elect our leaders to lead and make those decisions.

z Charles Lehrer (D): Why should they abolish the whole board when it might just be one or two rotten apples?

Responses were not received from Jimmy Schoolfield, a Democrat running for the commissioner’s seat representing District 1, nor three Republicans, Jerre Clauss, Merrill Lockfaw and Bill McDermott, running for that same seat.