Surprises emerge in stances on Sunday liquor sales bill

Hartford - Like many pieces of controversial legislation, the Sunday sales alcohol bill before the state legislature has champions and critics on either side of the party divide.

But the talking points dominating the debate so far are a curious break from the political narrative as it's commonly perceived.

The bill's proponent, Gov. Dannel P. Malloy, the first Democratic governor to win office since the mid-1980s, is clamoring for deregulation and an unbridled consumer marketplace.

"This has been a 100 percent regulated and protected industry and, in so many ways, quite un-American," Malloy said recently of the state's liquor business. "I go into a pharmacy and there's no minimum price for aspirin."

Meanwhile, the bill's opponents - including many fiscally conservative Republicans - are arguing in favor of keeping price controls and protecting small businesses from deep pocketed competitors.

Such are the dynamics battle over what would be the biggest overhaul to the state's liquor laws since Prohibition.

Some may wonder whether the state's politicians suddenly have reversed themselves; here the GOP is seeking a government hand in a favored industry, while a union-backed Democrat is praising the free market's invisible hand.

There is much more to Malloy's bill than simply ending the 1933 ban on Sunday sales.

In regard to hours of operations, it would extend daily alcohol sales by one hour to 10 p.m, and permit restaurants and bars to stay open until 2 a.m. every night of the week - not just Fridays and Saturdays as they currently may. It also would end the required Monday-after-Sunday holiday closings.

On the business side, it would let some convenience stores sell beer and eliminate the minimum retail price provisions for package stores.

Stores also would be allowed to sell five alcoholic items a month at 10 percent below cost. (They are currently prohibited from selling below cost or below the state's "minimum bottle" price, which is set by suppliers and can add several dollars to the price consumers pay.)

The bill would increase from two to six the number of package stores that one person or corporation may operate.

And it would establish a statewide licensing system. Existing package stores would be given a medallion - a license - that could be sold on the open market to other stores or supermarkets. The supermarkets then could operate a separate but affiliated package store in a different space, with different entrances and cash registers.

What's more, a little-noticed provision in the bill would allow casino-goers to keep sipping their drinks in casino gambling areas after the bars close at 2 a.m. Under current law, drinking stops and all glasses must be gathered up by 2 a.m. That still would be the case in the casinos' bars.

Political insiders say the bevy of detail and provisions in the governor's bill has turned off lawmakers in both parties who otherwise might support Sunday sales.

Carroll Hughes of Old Saybrook, chief lobbyist for the influential Connecticut Package Stores Association, recently told the General Assembly's law committee that for the first time, his members this year will not fight the concept of Sunday sales. But they're opposed to almost everything else in the bill.

In an interview with The Day, Hughes said the business-side changes in the legislation would be more devastating to package stores than the landmark 1981 law that phased out the state's minimum-markup laws.

Under the old laws, wholesalers and retail stores had to mark up the price of wine by at least 33.3 percent and spirits by 21.5 percent. Critics said the system kept liquor prices artificially high while defenders argued it helped keep family-owned "mom and pop" stores in business.

There were more than 1,500 package stores in the state 1981. There are now about 1,200, despite a larger state population. If the governor's alcohol bill passes in its current form, "my guess is we'll lose 70 to 80 percent of the stores today," Hughes said.

For Hughes, a crucial difference between the proposed changes and those in the 1980s is that the governor's bill would allow big-name supermarkets to get in on the package-store business.

"In '81, the stores just had to compete with each other," said Hughes, who was lobbying for the package stores association at the time. "Now it's not just the stores clawing each other to pieces. It's an outside force that has all the foot traffic and unlimited financial resources."

When Republicans have stood with package-store owners to oppose Malloy's proposal, they sometimes couched their remarks with an underscoring of their personal beliefs in capitalism.

"As a fiscal conservative, I'm someone who will almost always defend the free market competition with minimal or no restrictions," state Sen. Len Suzio, R-Meriden, said at the Feb. 29 public hearing. "The free market has made the country the greatest economic engine in history.

"There are times, however, when regulations are appropriate."

Suzio said it is wrong to abruptly overhaul regulations that hundreds of family-owned businesses have existed under for decades.

"It is not fair to materially change the rules of the game in the middle of the game," he told the committee, which has yet to act on the bill.

Another outspoken GOP opponent of the bill, state Sen. Andrew Roraback, R-Goshen, who is running for U.S. Rep. Chris Murphy's 5th Congressional District seat, feels the same.

"I am a great believer in free markets and the free market system," Roraback said last week. "But I'm also a great believer in not changing the rules in the middle of the game."

In introducing his bill, Malloy said the goal is to lower prices and make the state's beer and liquor retailers more competitive with those in neighboring states, such as Rhode Island and Massachusetts.

The governor said that with the current price controls and regulations, too many residents are crossing state lines for cheaper alcohol and expanded hours.

The legislature's nonpartisan Office of Fiscal Analysis expects the state to gain $8.5 million in annual revenue with the changes in the bill. And the states' supermarkets are excited about what's in the bill.

"Minimum pricing is cost-fixing, plain and simple," Stan Sorkin, president of the Connecticut Food Association, told lawmakers at the bill's hearing. "Connecticut consumers deserve more competition and lower prices, not artificial price controls."

But in the opinion of the bill's fiscally conservative opponents, the state instead should cut excise taxes on alcoholic beverages. Customers pay those taxes in addition to the 6.35 percent state sales taxes.

State excise taxes increased by 20 percent last summer. On a per-gallon basis, the tax now adds 24 cents to the cost of beer, 72 cents to wine and $5.40 to liquor.

Excise taxes are lower in Rhode Island, New York and in Massachusetts, where there is no sales tax on alcohol.

"Forget about Sunday sales," Roraback said. "If you want to make Connecticut competitive with neighboring states, back off the tax increases."

Some Democrats also have come out against the legislation. State Sen. Edith Prague of Columbia fears the added hours for beer sales would lead to more drunken driving. She says the package-store owners in her district are all opposed to the business-side changes.

Democratic Sen. Andrew Maynard of Stonington said he could support the bill if it only authorized Sunday sales. He believes package stores can do good business if open for that seventh day. The problem is the other provisions.

"The governor's bill, in my view, does so many things to directly undercut the small operators that I would find it hard to support in its current form," Maynard said "From a pure price standpoint for consumers, all these changes would ultimately accrue to their benefit. But from a healthy local economy standpoint," the changes could hurt, he said.

Fergus Cullen, executive director of the Yankee Institute for Public Policy, a conservative state think tank that advocates for free market principles, said the state's alcohol laws are a good example of the impact special interest groups can have in the Capitol.

However, lobbyists' clout has diminished in recent years since the ban on lobbyist campaign contributions.

"The laws are such that you would never design them this way if you started with a blank page of paper," Cullen said. He said the Yankee Institute hasn't taken a position on the governor's bill, but believes that package stores should not receive special protection in the marketplace.

"If we were designing this system from scratch, I think we would have a very different system than we have now," Roraback, the Goshen Republican, said. "But we're not designing a system from scratch."

j.reindl@theday.com

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