The Harford County Liquor Control Board is proposing again this year to increase the cost of liquor licenses.
It’s also proposing, in light of a recent Supreme Court decision, to abolish residency requirements for liquor license holders and instead introduce the “operator licensee.”
Bills to be proposed during the 2020 session of the General Assembly on license fees and resident licensees were discussed last Wednesday at a meeting of members of the Harford County Liquor Control Board and the Harford delegation to the Maryland General Assembly.
Final drafts of any bills are expected to be sent by the liquor board to the delegation by early to mid-November for review before they are introduced in the early part of the session, which begins Jan. 8.
It has been 15 years since fees for liquor licenses have been increased in Harford County, board administrator Scott Baker said Monday.
The board is proposing a 20 percent across-the-board increase, which is then rounded up to the nearest $50, Baker said.
In some cases, such as a one-day beer and wine license, or a growler or non-refillable container permit, that translates to a 100 percent or more increase.
The liquor board sent a letter to all liquor licensees explaining the proposed fees and the reasoning.
The liquor board is one of the few in Maryland that does not receive financial support from its county government and instead is funded solely through annual license fees, per diem license fees, fines, interest, miscellaneous income, license change fees and advertising fees, Baker wrote to the licensees.
Since the last fee increase in 2005, there have only been two years in which the board was able to cover the expenses solely through license fees.
“In fact, a recent audit of the license year 2018-2019 reported a deficit of over $65,000 along with a pension liability of over $100,000 that is to be spread over several years,” Baker wrote. “The Board cannot continue to operate on a 15-year-old fee schedule. Our expenses, like yours, have increased during that period.”
In an attempt to cut board costs, Baker has looked at “all aspects of our operation” and the staff evaluates if a less expensive alternative is available.
“We no longer use the same vendors ‘just because we always have,’” he wrote. “I monitor our spending and review our budget monthly in an effort to stay within our means.”
Baker asked the licensees for their thoughts on the proposed increases and as they accumulate he would send them to delegation chair Del. Theresa Reilly, he said.
“Surprisingly, there are people who understand it’s been 15 years,” Baker said of the responses he’s received so far. “Some agree with 20 percent, some agree with a fee increase because it’s the cost of doing business but would like less than 20 percent.”
The board sought fee increases last year but the delegation did not pursue it, Reilly said.
“When we do that, we like to see their budget and what is going on," she said. “What we received [last year] wasn’t detailed enough, not adequate enough to see what they had coming in, their expenses.”
The delegation knew the board was making some changes, including as far as providing healthcare for its staff, “but we were not comfortable going forward until they did a full audit and had a full budget.”
That information has been provided this year, she said.
However, Reilly said the bill submitted during the session could look drastically different than what the liquor board has proposed.
“There was a lot of discussion, a lot of ways to do it,” Reilly said. It may not be that fees are raised across the board, but rather factors such as occupancy or sales, or something else altogether, are taken into consideration.
The board is also drafting a bill to eliminate the resident licensee requirement and create an “operator licensee.”
“It would have the same requirements for day-to-day operations, like substantial time on the premises, but there would be no requirement that they live in Harford County,” Baker said.
The change stems from the June 26 Supreme Court ruling in Tennessee Wine and Spirits Retailers Association v. Thomas, which said the state’s residency requirement “violates the commerce clause and is not saved by the 21st Amendment,” according to scotusblog.com.