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Posts published in “Day: February 21, 2019”

Booze, bucks and buyouts

schmidt

Idaho territory was a rugged place. While LDS settlers were diverting streams and cultivating fields in the southeast, the mining camps in central and North Idaho were raucous, unruly and not ashamed of it. But the drafters of the Idaho Constitution in 1889 were feeling the wave of temperance rising: Article 3, Section 24 reads:

PROMOTION OF TEMPERANCE AND MORALITY. The first concern of all good government is the virtue and sobriety of the people, and the purity of the home. The legislature should further all wise and well directed efforts for the promotion of temperance and morality.

Idaho went on to establish a Prohibition amendment to our state Constitution in 1917, two years before ratifying the 18th Amendment to the US Constitution which established nation-wide prohibition.

But then came repeal in 1933 and Idaho, somewhat reluctantly followed suit. The Idaho Liquor Act was passed the legislature in 1939 and its framework exists today with some modifications. It’s an old, complicated system of regulating liquor licenses controlling the manufacture, sale, distribution and serving of alcoholic beverages. It has created an artificial market for liquor licenses that means for some regions they are dear, expensive or unattainable. Other markets they go unclaimed. Make no mistake, this law has created winners and losers. And the winners aren’t about to embrace the losers.

You see, the State Alcohol Control Board (ABC) limits licenses in cities based on their population. But if there are no licenses available from the state, you can buy someone else’s license or lease it. Here’s a broker where you can shop.

A license that cost you $200 from the state, if you put your name on the waiting list and bided time, is now worth $200,000 on the “liquor license market”. You can’t just sit on a license, you have to operate a real functioning bar for at least 6 months or you lose your $200 fee and the license. But if you “season” your license, it becomes very valuable. Last year a license in Coeur d'Alene was worth $300,000. Add to this, the state collects a 10% fee on any liquor license transaction. Throw in the changing populations of towns and this amplifies the obscurity of this system. The people who paid a lot don’t want to see their investment devalued should some crazy legislator want to shake up the 80-year-old system. I don’t see how this promotes temperance and morality.

I respect any legislator willing to address this mess. Many have. Governor Otter tried in 2009. But he gave up after his bill died in the Senate that year. Issues as tough as this require perseverance. A couple years ago Representative Luke Malek (R, Couer D Alene) brought a bill but again it died; then he decided to run for Congress. This year Senator Jim Rice (R Nampa) has brought a bill very similar to Malek’s. It got killed in a Senate committee last week.

I applaud Senator Rice. I hope he’s willing to stick around and see it through. He might have to hand this one off to someone younger; I suspect it will take a few years. And he’ll have to have tough skin because lots of liquor license owners think their ox is going to get gored.

Probably the only solution will be for the taxpayers to buy out all those over-priced liquor licenses so we can start over. I doubt Senator Rice can promise us that Mexico will pay for the buyout. That one’s getting sour.