Maine lawmakers eye more revenue from sale of liquor
state house

Maine lawmakers eye more revenue from sale of liquor


By Mal Leary
Capitol News Service

AUGUSTA, Maine — A midcontract study of Maine’s agreement with the Maine Beverage Co. to operate the wholesale liquor business in the state has triggered interest in getting more revenue from the sale of liquor to help fund the state two-year budget.

“There are some things we can do that would raise some additional revenue,” Liquor Commission Director Dan Gwadosky said. “I can’t tell you how much until we drill down on the numbers and look at all the options and how they interact.”

But in response to a question, he confirmed that it was in the millions of dollars a year. Finance Commissioner Ryan Low said he expects it is “a good chunk of change” but agreed with Gwadosky that it would take some analysis to get a good estimate.

Rep. John Martin, D-Eagle Lake, asked Gwadosky how much a 5 percent across-the-board increase in all liquor prices would generate for the state and whether it could be done. The state has not had an across-the-board increase since February 2005.

“Frankly, I think we are going to need some more money here pretty soon,” he said.

Sen. Bill Diamond, D-Windham, co-chairman of the Appropriations Committee, said he has no doubt the panel will need additional dollars to bring the two-year budget into balance. He said several committees have rejected portions of the governor’s proposed budget that add up to about $7 million a year. He is also concerned that revenues will not meet projections for the next two years and will add to the “hole” in the budget.

“I am glad Representative Martin asked that question, it has a lot of us thinking,” he said. “If there is more revenue to be realized here I think we should look at it.”

Gwadosky said the state could adjust the profit margins allowed on the wide variety of wine and liquor sold in the state by rule making and that would provide some additional revenue.

“The problem is we guarantee the company what they get and any additional revenue is through the profit-sharing arrangement in the contract,” he said.

Sen. Richard Rosen, R-Bucksport, said the panel should look at any “revenue enhancements” that could be realized from wholesale liquor sales. He agreed the committee would need to find additional revenues and cuts to bring the budget into balance.

“I don’t think this is an area the Legislature has taken a very close look at, “he said. “I think there is some surprise at the opportunities that exist here to find new revenues.”

The state paid $150,000 for the independent evaluation of the state’s contract with Maine Beverage, which is halfway through its 10-year term. Low said the governor believed it was important to get the study after Maine Beverage indicated last year it wanted to start negotiations to extend the existing agreement or craft a new one.

The state got $125 million upfront in 2004 to balance the state budget and has received an additional $19 million from the profit-sharing provision of the agreement. The 88-page study laid out several options for the state, from continuing the current agreement with some minor changes to the state once again operating its own wholesale liquor distribution system.

If the state took over the wholesale business in 2014, when the current agreement ends, the study estimates the state will get $40 million a year in revenue from wholesale liquor sales in addition to the taxes collected on retail sales.

“I don’t see how anyone can say this was a good deal for the state,” said Sen. Debra Plowman, R-Hampden. “And I do want to say I am upset we just got this report plopped down in front of us as this got under way with no time to read and analyze what is in here.”

Plowman serves on the Legislature’s Legal and Veterans Affairs Committee, which has policy jurisdiction over the liquor agreement. She said that panel should hold a separate, in-depth, hearing on the report and assess its implications for state policy.

“I am not smelling any stale cigarette here, I am smelling a lot of smoke and when I smell smoke, I expect there is fire,” Plowman said.

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Comments
30 comments on this item

Good ! give the cigarettes a break for once! Try taxing the crap out of booze, you'll make millions in this state!

They still haven't given any serious thought to spending less. We as a voting public need to throw the bums out!

Looks like more people will be spending more money in friendly NEW HAMPSHIRE. Way to go John Martin. Haven't you been in ugusta way too long!

When the state sold the liquor business for $125 million for 10 years it was taking in $37 million a year to the general fund, $37 million X 10 = $370 million. Even as a product of the Maine school systems I can figure that they gave up $245 million over 10 years, but the brainiacs in Augusta needed a study for $150,000 to tell them that, Ol'Baldy got away with that one 5 years ago and no one even noticed.

Tax, tax and more tax that's all the Democrats know..........'VOTE THE BUMS OUT OF OFFICE' !!!!!!!!!!!!!!!!

HMM I SEEM TO REMEMBER THIS NOT WORKING LAST YEAR

just a reminder :)

Dan Gwadosky, Sen. Bill Diamond, and Rep. John Martin = Moe, Larry, and Curly, Maine's own 3 stooges.

Aren't we blessed to have a Bald Nazzi?

It seems that every week or so, I read something on how the buffoons in Augusta plan on raising more money, either through tax increases or selling bonds, etc.

Am I the only resident of this state who recognizes that the welfare FRAUD that permeates this state is absolutely off the scale.

Here in northern Aroostook County, I see case after case, of people collecting state welfare, claiming some disability or other, who are not, and fully capeable of working. A case in point is a family, a FAMILY, mind you, that moved to Maine from New Jersey, after being "told by a friend in Maine" that if they move here, the state will take care of them, give them housing, food, pay their utilities, etc and it wiil cost them nothing. When these individuals were interviewed by an education professional, both mother and father claimed that they each suffered from "chronic bowel disorder" and were unable to work, and the state of Maine actually bought that. I surmise that these two or the state never heard of Imodium, etc. They now live happily in Maine, and WE pay their way. Or the man and woman I actually watched check out of a Shop N Save in Newport, pay for their groceries with food stamps, load their groceries in a brand new van, return to the store and purchase four half gallons of coffee brandy and four cartons of cigarettes and pay cash. You're welcome.

My point here is that 30% of us pay to support and subsidise the other 70% of people living in Maine.

If this state were serious about saving money, start with eliminating the FRAUD which exists in the Maine welfare system.

Just recently, there are several states which are in the process of enacting legislation to make mandatory, random unannounced drug testing of welfare recipients.

I suggest a Welfare Fraud Division, to investigate every case of welfare in this state. The cost would be negligable compared to the amount saved by elimination of welfare waste. Not to mention the added benefit of having the "welfare slugs" depart our state for "greener $$$ pastures".

So, in conclusion, let's raise the tax on liquor, let's cut the excise tax by half, but raise property taxes to care for our roads, let's cut this program or that program to save money.

Has anyone heard of the legislators of the state of Maine saying that they will cut THEIR pay in half to save money???

David... an even balder Nazi :)

Hmm, the state taxes beer at what, 25 cents a gallon? and they want to raise it 5%? There you go, fix the budget. Why not tax beer at $1.00 a gallon. Then beer drinkers can be non humans like the smokers are.

scrap the dirago health plan save millions

Limestone65, Senator Rosen is a Republican. I don't know the numbers but didn't cigarette sales go down significanly after the most recent tax hike? Ostensibly the cigarette tax was to decrease smoking in Maine but when revenues dropped there was an outcry about the lost revenue! I wonder what N.H. has taken in by folks making their liquor and cigarette purchases across the border?

I do not drink save for a glass of wine once in a great while with dinner. My wife enjoys the spirits and I will say this:

I will now purchase all my booze, soda, bottled water and liquid consummables at home before I head for Maine this summer. I make about 4 or 5 trips back and forth to camp a season so it is easy to do.

What a deal! The prices are cheaper and I get a refund on the bottles I paid no return fee on!!

Example: I buy a 30 pack of Poland spring water (bottled in Maine) in Costco for about $4.50. I bring it to Maine and drink it and get 6 cents a bottle back at the redemption center. That 30 pack really cost me $2.70. Thats 9 cents a bottle!! Good idea Augusta! The tourists and summer residents will all be bringing in their liquid consummables. Not only will it be much cheaper for them, it will cost the state's food chains and mom and pop stores business. This is the type of backwards thinking that is causing so much of the budget problems in Maine. The answer to every problem in Augusta is "LET'S RAISE TAXES"!!

The legislature is taxing the working citizens of Maine at the expense of the welfare state which is growing exponentially. Watch, they will have to raise the food stamp give out so many of those on the dole can continue to buy the more heavily taxed booze with their "under the counter" money or food stamp money. If you think that food stamps are not used to buy cigarettes or booze you should stand next to me at the Shop and Save in Machias and see what goes in the grocery cart, is paid for with food stamps and goes out of the store and into the back of a brand new pick-up or SUV.

We all have seen it. How the hacks in Augusta can continue to be charitable to those who cheat the system...and there are probably more who cheat the system getting benefits than those who truly deserve them.... is beyond comprehension.

Those people who are truly in need should be amply provided for. If the cheats were eliminated they could get more and have more. Most taxpayers have no issue with charity to those in need. The issue here is those who cheat the system.

Pee in a cup. Look up car, boat, ATV and snowsled registrations and see how many "poor" people are driving brand new conveyances and ask why they are applying for food stamps or welfare. There has to be a better way to administrate these programs and get the cheaters off.

captain_obvious: Baldacci is not a cancer patient. He is the cancer!!!!

Oh joy... Another tax... soo now we will have... hmm... how to word it.... Pissed off people everywhere... and they will be the ones that smoke and drink... and probably will be pissed off they can't afford beer and cigs.... not the kind of pissed off person i want to be around!!!!

Yet ill be one of them... yes yes...quitting is an option... but damnit it's almost summer!!!

ABOUT TIME lets raise the price. Lets make it as equal as the taxes that have been and are going to be added to cigs!!

as long as it raises taxes on alcohol, not beer

i will be a happy man

4evramazed---You are correct. I worked in the state liquor stores for 22 years. The state did get $5.5 in "commossion/kickback" to the general fund last year.

And it is still cheaper in New Hampshire. Always has---Always will.

Doesn't matter, if I want it I will buy it. Just like the deposit. I still throw cans away. They melt down real easy in the stove or the burn pile. Glass also melts in a burn pile.

I don't drink but I do smoke , so all I gotta say is , hahahaha....Don't expect one once of sympathy from me...I also hope they include beer...We get the government we deserve and continue to elect...Their intellect accurately reflects the people who elect them...IMO...

...and when they came for me , there was nobody left to speak up.....

I remember when the state was in the liquor business and the state was averaging $28 million a year in net revenue to the general fund. Then the state leased out the liquor business for 10 years for $125 million plus a small commission which was $5.5 million for 2008. Lets do the math: $125 million over 10 years is $12.5 million a year which is less than $28 million a year. But wait. The state got the $125 million 5 years ago so only $5.5 million went into the general fund for 2008 which is much less than the $28 million a year the state was getting. At the legislative hearings the "big wigs" said the state would save millions a year.After 5 years, I am till waiting for the first penny savings.

Philster, BDN reporter A.J. Higgins was the only one I know of to point this out when it went down, and nobody caught it 99% of the people in Maine don't even know what happened and Rebecca Wyke was the chief sales schill on this whole scam to balance the budget for one cycle with $125 million, and then what?

The BDN or Press Herald should really look into this, as well as Gwadowsky's latest scam to put a liquor store on every corner, I have not even seen one mention of that anywhere, you think they got underage drinking problems now, just wait until every convenience store in the state can sell hard liquor. They are trying to increase revenue, but the only way to do it is to increase consumption, where are the substance abuse folks on this one?

4everamazed if there is a liquor store on every corner, and the prices are halfway fair

i'd be a happy man

LOOKS LIKE I'LL BE GOING TO NEW HAMPSHIRE MORE OFTEN,WHILE I'M THERE I'LL BE SHOPPING,EATING,MIGHT EVEN GET A HOTEL ROOM,MORE MONEY SPENT OUT OF STATE,KEEP IT UP AUGUSTA YOUR DRIVING MORE+MORE PEOPLE OUT OF STATE WITH ALL THESE TAXES,WHEN YOU CAN DRIVE TO N.H. SPEND MONEY AND WHAT YOU SAVE PAYS FOR YOUR GAS TO DRIVE DOWN PLUS

if the state is making money from the sale of alcohol,should they also be held responsible for crimes commited by those while under the influence. like killing someone while driving drunk? i think they should be.

also for those of you that go to n.h. to buy booze, and transport it over the state line, do you know that in doing so you have commited a federal offence? thats interstate transporatation without having the proper permits and icc authority,does smuggling sound familier? running booze?ect ect.

Maine so called lawmakers should be put in the center of town and hung out to dry.They are all bloodsucking Fools.

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