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Baltimore Business Journal: Moving alcohol enforcement could cost $50M

A new analysis from Comptroller Peter Franchot’s office predicts transferring regulation and enforcement of alcohol, tobacco and motor fuel laws from his purview to a new commission could cost the state about $50 million.

The expense would be spread out over a period of five years as the proposed new body builds an infrastructure for oversight, according to a report written by a policy analyst working in the comptroller’s office and released this week.

Meanwhile, the state lawmaker who proposed the change disputes the estimate and urged the public to take it "with a real grain of salt."

The $50 million estimate comes in response to an effort to strip away some of Franchot’s oversight powers. The General Assembly is considering a bill that would create a five-member Alcohol, Tobacco and Motor Fuel Commission to oversee the Field Enforcement Division, a body traditionally housed within the comptroller’s office that investigates illegal manufacturing and sales of alcohol, tobacco and fuel.

The measure incorporates suggestions from a task force formed last legislative session by lawmakers concerned that Franchot faces a conflict of interest as an outspoken advocate for loosening restrictions on craft brewing in the state as well as the elected official charged with ensuring breweries follow the law.

In a statement, the comptroller reiterated what he has said before when facing such accusations, calling the proposal a “reckless political power grab.”

The analysis outlines projected expenses associated with the transfer of regulatory and enforcement duties, including buying or renting a new, secure office space for the Field Enforcement Division, developing new document management systems and hiring new employees. The report also predicts there will be a loss of institutional knowledge as existing agents decide to retire rather than leave the comptroller’s office, as well as a decrease in tax money collected as a result of field enforcement agents communicating with the comptroller’s compliance division.

The proposal “would cost Marylanders tens of millions of dollars, weaken our regulatory enforcement laws, jeopardize tobacco settlement funds that the state relies on, endanger taxpayers’ security and potentially impact the job security of dozens of hardworking enforcement agents who protect consumers at the pump, crack down on cigarette smuggling, regulate alcohol and go after tax cheats,” Franchot said in a statement.

State Sen. Ben Kramer, a Montgomery County Democrat who proposed the transfer of power, said the comptroller’s analysis is exaggerated and predicted the actual financial impact will be “considerably less.” A fiscal and policy note from the independent analysts at the Department of Legislative Services has not yet been released.

“This is all part of the comptroller’s propaganda machine cranking out misinformation,” Kramer said. “It should be viewed with a real grain of salt.”

Kramer said his bill would not require Field Enforcement Division employees to leave their existing office.

“At the end of the day, everyone who is in any position within the Field Enforcement Division will be sitting within the exact same chairs, at the exact same desk, answering the exact same phones,” he said. “None of that is going to change — it is just when they have questions or need guidance, instead of knocking on the comptroller’s door, they will be knocking on the commission’s door.”

A hearing on the proposal is scheduled for Friday at 1 p.m.

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