Session preview 2016: Liquor control to get a makeover

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Lawmakers are looking to reform the Vermont Department of Liquor Control.

Revelations of significant lapses in oversight at the department last year have spurred a push to increase accountability and spur modernization.

Michael Hogan, the previous commissioner, retired after 30 years in government service last year following revelations by the Burlington Free Press that he approved more than $100,000 in overtime for the department's enforcement director without proper payroll documentation.

Sen. Dustin Degree, R-Franklin, who served on the Vermont Liquor Control System Modernization Study Committee last summer, said the department needs better oversight and operational improvements.

"I was really shocked to learn about some of the issues the Department of Liquor Control is having," Degree said. "They have a point-of-sale system that is not being manufactured anymore."

"For me, the most important thing we can do is get the commissioner looped in with the administration and have some accountability and oversight," he said.

The Vermont Liquor Control System Modernization Study Committee was formed under the 2015 economic development bill. The committee's main charge was to file a 25-page report in December and draft legislation to address some of the issues highlighted in the report.

The report found that the agency was stuck in the past, mostly due to a lack of funding. Orders are hard to place, the state's transactional system is antiquated, and some statutory language around liquor control has not been updated in 50 years.

"The State's agency liquor stores are unable to place orders online, and most agents still use a dial-up credit card connection to complete sales," according to the final report. "In addition, department staff must manually approve more than 10,000 license applications per year."

The agency is already in the process of developing a new point-of-sale system that is expected to be up and running sometime in 2016.

The report cites a number of outdated operating procedures at the department, but the focus of the legislation is the duties of the five-member Liquor Control Board and the department's commissioner.

The draft legislation limits Liquor Control Board members to a maximum of two five-year terms and confers the governor with appointment powers for the commissioner of Liquor Control. The legislation also limits a commissioner's term to four years.

The legislation also directs the commissioner to hold town votes on whether communities want to establish liquor outlets. The move would likely boost the number of state liquor outlets — currently 80 — and bring in more tax revenue.

The legislation will be reviewed by the Government Operations and the general committees.

The study committee was made up of two representatives — Tom Stevens, D-Washington/Chittenden, and Janet Ancel, D-Washington — and two senators — Degree and Philip Baruth, D-Chittenden. The committee also included the current chair of the Liquor Control Board, Stephanie O'Brien, representatives from the governor's office and the Tax Department.

Stevens said the legislation narrowly focuses on getting the Department of Liquor Control "straightened out."

"From there, it's hard to legislate how people do the business, that's up to the commissioner and the people who work in the division," he said. "The legislation itself was meant to be foundational and evolutional, and not anything more than that."

Ancel said the department is underfunded and needs to be professionalized. She hopes that the Legislature can consider an overhaul bill in the near future that can fix a number of issues that can't be remedied simply with the appointment of a new commissioner.

"The department is underfunded and has struggled to keep pace with rapidly advancing technology that could enhance its efficiency and profitability," Ancel said.

Ancel said the state should create more liquor outlets because "we lose a lot of liquor sales to New Hampshire."

"We should do what we can to reclaim those sales," she said.

After the revelations about Hogan came out, some argued that state control over liquor sales should be ceded to a private entity, but the committee report recommended no such actions.

"I don't think any privatization scheme would increase profit," Stevens said, adding that liquor sales in the state have increased in the past two years.

Degree said that while he agreed with current plans to keep state control over liquor sales, he thinks the state should explore the option of privatization.

"I'd love to be a part of that conversation," he said.

Legislators say their bill is straightforward, and has approval from both the Democrats and the Republicans who served on the study committee.

Ancel said she anticipated no major roadblocks, but that some questions would inevitably be raised.

"I've never seen a piece of legislation that had no sticking points," she said.

Photo by Anne Galloway/VTDigger


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