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A Miner Detail: The 2019 Annapolis Session Winners and Losers [EXCERPT]
April 12, 2019
WAMU: Booze! Causing Political Fights In Maryland For 100 Years
March 4, 2019
There’s a war raging between Maryland Comptroller Peter Franchot and State Sen. Ben Kramer (D-District 19). It’s over a bill currently under consideration in the General Assembly that would move regulation of alcohol, tobacco and gasoline from the comptroller’s office to a new state agency.
To understand why Maryland’s tax collector is the person responsible for alcohol regulation in the state, you have to go back 100 years to that period in American history known as Prohibition. The 18th Amendment to the U.S. Constitution went into effect in January 1920. It prohibited the production, importation, transportation and sale of intoxicating liquors.
“It doesn’t outlaw consumption privately,” says Michael T. Walsh, a professor of history at the Community College of Baltimore County. “And I think that’s a misnomer that’s often, that prohibition means that you can’t consume alcohol. No – people stocked up on their liquor and alcohol prior to the 18th Amendment going into effect.”
“The Free State” In his book Baltimore Prohibition: Wet and Dry in the Free State, Walsh highlights Maryland’s defiant stance against Prohibition. He says most of Maryland’s 25 local jurisdictions began adopting “dry” laws before 1920, but the more populated areas – which had more representation in the General Assembly – remained “wet.”
Baltimore was one of those jurisdictions. It was one of largest cities in America during the 1920s, Walsh writes. More than half of the state’s 1.4 million residents lived in the city. The city’s anti-Prohibition lawmakers, coupled with the 1920 election of “wet” Gov. Albert Ritchie, made Maryland a defining force in the nation’s pushback against Prohibition.
To bolster the 18th Amendment, Congress passed a law called the Volstead Act. The law gave the federal government the right to enforce Prohibition in the states. But, Walsh says, some lawmakers felt that wasn’t enough.
“Each state would pass what they called a baby Volstead Act. Well every state – and there’s 47 at the time – every state would pass a baby Volstead Act except for Maryland,” he says.
The moniker, “The Free State” was born out of this insubordination.
Alcohol And The Tax Collector After the 18th Amendment was repealed in 1933, Maryland’s local jurisdictions were once again responsible for implementing their own alcohol regulations. (Side note: The City of Damascus remained “dry” until 2012.) Allowing 25 jurisdictions to create individual alcohol regulations was problematic, says Len Foxwell, Chief of Staff for Maryland Comptroller Peter Franchot.
“And so what you have is a patchwork quilt of different regulatory bodies each with different standards and different procedures for enforcement,” Foxwell says.
Alcohol regulation was placed with the comptroller in 1951 to standardize state oversight, tax collection and licensing of the liquor industry. Two years later, the General Assembly created the Field Enforcement Division of the comptroller’s office. Staffed by law enforcement officials, the agency helps with regulation, licensing and combating the illegal transportation and manufacturing of alcohol.
Maryland is one of 20 states that regulates alcohol through the state tax collector’s office, according to Foxwell. An informal search by the National Alcohol Beverage Control Association found 25 states in which regulatory responsibilities fall under different departments. These departments include Finance, Commerce and Revenue.
A New Debate The Field Enforcement Division of the comptroller’s office is at the heart of a debate over a bill in the 2019 session that would create a new state agency to oversee alcohol, tobacco and motor fuel. State Senator Ben Kramer — the bill’s main sponsor — says the agency will consist of five people, all of whom are appointed by the governor. The comptroller is currently an elected position. The new agency board will include one person from the public health sector and one person from the public safety sector.
“And that’s where this whole bill begins in pulling together the public health, welfare and safety when we’re discussing alcohol in the state,” Kramer says.
Alcohol regulation is a public health and public safety issue that needs to be addressed, Kramer says. The new state agency would largely focus on responding to the health and safety effects of alcohol use and abuse.
But Foxwell says the Field Enforcement Division is so intertwined in the normal functions of the comptroller’s office that removing it would dismantle this system. He says there’s a “synergistic” relationship between tax compliance, revenue collection and alcohol enforcement. And, he adds, the division is instrumental in other government actions like helping the attorney general to combat tax fraud and identity theft.
“That function goes away the minute the Field Enforcement Division is removed from the comptroller’s office because they no longer have access to sensitive tax information, they need to do their job,” Foxwell says.
Federal tax privacy laws forbid sensitive tax information from being viewed by unauthorized parties or agencies.
This Time, It’s Personal There’s also a personal fight taking place. Kramer has accused Franchot of extorting money from Maryland craft brewers and compared him to Bernie Madoff, the former investment advisor convicted of stealing billions of dollars from his clients. Kramer made this point to highlight his argument for the need for a new, independent alcohol regulatory body.
“It becomes clear that this change must be made to make sure that we have good government and transparency, honesty and that public interests are brought to the front,” Kramer says.
Franchot calls the claims false, unfounded and irresponsible.
“It’s one thing to have political disagreements. It’s one thing to have a personality conflict with the comptroller. It is not ok to sit in front of your fellow senators and accuse the comptroller of Maryland of committing a felony crime with no basis in fact and without a single shred of evidence,” Foxwell says.
Franchot has filed a complaint against Kramer with the Joint Committee on Legislative Ethics. Committee officials declined to comment on the matter. The battle rages on. There are still several weeks left in the 2019 session. https://wamu.org/story/19/03/04/booze-causing-political-fights-in-maryland-for-100-years/