This saloon looks almost as antiquated as Montana’s liquor licensing quota system.
If you haven’t read it yet, don’t miss Paul Cartwright’s guest editorial in the Friday edition of the Billings Gazette.
The former Helena city commissioner deftly explains what’s wrong with Montana’s liquor licensing quota system, and he lays out several options for finally doing something to seriously reform it.
Ed Kemmick
The quota system, as Cartwright says, was adopted in 1947 to “promote temperance” and “create orderly markets.” It has done neither.
It probably helped Montana achieve its notoriety as one of the worst states for drunken-driving fatalities. As for an “orderly market,” ha! What we have is a disorderly, convoluted, unfair, corrupt and corrupting system that makes a mockery of free markets.
Perhaps the most discouraging thing about the system is that it shows how extraordinarily difficult it is to change bad government policies once they have been allowed to become entrenched and crusted over with a thousand refinements, sub-clauses and administrative rules.
To make matters worse, this isn’t something we can blame on the leviathan of federal government. This mess is homegrown, made right here in Montana, meaning the solution would have to come from here, too.
Instead of proposing a real solution, our lawmakers, during every legislative session, simply fiddle with the system, making it more complicated, more entrenched, more impervious to comprehensive reform.
The worst change ever was when the Legislature decided to tie liquor licenses to the privilege of offering casino gambling. A system of artificial quotas, paired with gambling privileges—which was like having a license to print money during the glory days—made such licenses ridiculously expensive, in some cases worth more than $1 million.
That didn’t seem so bad for bar owners who planned to put in the maximum of 20 gaming machines, but if you were an entrepreneur who just wanted to open a fine restaurant and serve beer, wine and liquor to your fellow adult citizens, it was a nearly impossible hurdle.
Then, every so often, the state would conduct a lottery in a growing city like Billings, with relatively few licenses per capita, awarding a license from a place like Butte, which had too many licenses per capita because of declining population. These would be sold for as little as $20,000, and if you managed to use the license for at least five years, you could sell it on the open market for maybe $1 million or more.
If the council could have been persuaded to deny that review, the owner might have given the license up, making it available to the next person in the lottery line.
Slander, skullduggery and rabble-rousing were brought into play, all anonymously. It was so bad that I wondered for the first time in covering the City Council whether there hadn’t been outright bribery. The applicant eventually won, but it was one of the ugliest, most underhanded campaigns I’d ever seen.
This legislative session, we’re seeing an offshoot of the quota system playing out in two competing bills, both of which would change the rules governing craft beer brewers. As far as I can tell, one bill would benefit tavern owners and big brewers and the other would benefit big brewers and, to judge from their support for the bill, alcohol distributors.
Neither bill seems to hold out any hope of benefiting the small entrepreneurs who’ve put Montana on the beer-brewing map, or the people who like to consume their wares. But why should we expect anything else? The small brewers and their customers hardly have a voice in Helena, while the competing interests surely do.
I am most suspicious of the bill backed by the Montana Tavern Association, which would allow tavern owners to buy brewing licenses. The MTA lobbyist said it isn’t fair that tavern owners are virtually the only people in Montana unable to open a brewery.
Boo damned hoo. For many years, the MTA did everything in its power to restrict breweries, no matter how small, from cutting into their business. The small brewers, unprotected by the antiquated quota system, were forced to do what creative, passionate people do: they worked within the confines of a lousy law to create a large and growing market for their high-quality products.
They were so successful that, finally, even the MTA decided it wanted a piece of the action. And thanks to that quota system, tavern owners have got the wherewithal to start breweries that young, independent entrepreneurs could never muster.
Every time the Legislature meets, another patch is welded on to the enormous, creaking, smoking contraption known as the quota system. It’s past time, as Paul Cartwright said in his fine op-ed piece, to scrape the contraption entirely and start from scratch.
Cartwright acknowledges how difficult that would be, but it only gets more difficult every time the Legislature meets and makes the system even worse.
