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Eye on Annapolis

The Daily Record's Maryland state government blog

Busch raises possibility of cutting comptroller out of alcohol oversight

House Speaker Michael E. Busch. (The Daily Record / Maximilian Franz)

House Speaker Michael E. Busch. (The Daily Record / Maximilian Franz)

The top Democrat in the state House of Delegates is raising questions that could affect the role of the state comptroller when it comes to the oversight, regulation and taxation of alcoholic beverages.

The comments made by House Speaker Michael E. Busch could be a prelude to what is expected to be a heated debate over Comptroller Peter Franchot’s enthusiastic advocacy of the state’s burgeoning craft brewing industry.

As with other issues, the comptroller’s personality conflicts with members of his own party, who are making comments that appear to paint a laser target on Franchot’s back.

“Is there any state that is not regulated by the comptroller’s office?” Busch asked a panel of industry experts during a Tuesday afternoon briefing on state alcohol laws.”Is there any state that is regulated by a health department or an independent agency out there in the country right now?”

Busch made no mention of Franchot directly but his comments come at a time when the comptroller has vowed to introduce a so-called reform bill. The 12-points in the 50-plus pages of legislation being circulated are aimed at eliminating many limits the comptroller says stunt the growth of what he calls a growing and sustainable manufacturing industry in the Maryland.

“I’m just trying to understand what may be the better place to deal with regulating as the market expands in Maryland and in the country,” Busch said.

A spokesman for Busch did not respond to a request for an interview with the speaker.

During a brief exchange at the Tuesday briefing, Busch cited the need for strong regulation of the industry, which dates back to the post-Prohibition era, calling alcoholic beverages “a controlled dangerous substance” — a phrase typically associated with powerful prescription painkillers and illicit substances such as heroin, cocaine, and marijuana.

He suggested that local liquor boards “working hand-in-hand with local health departments” might be better suited to the task.

“They’re the ones who go out and check on who’s serving children and who’s being diligent in dealing with drunk driving laws and making sure people don’t leave their establishments intoxicated,” Busch said.

Len Foxwell, Franchot’s chief of staff and the head of the comptroller’s Reform on Tap task force, said Busch’s comments are a direct response to the comptroller’s call to change laws affecting smaller brewers.

“It’s a direct cause and effect — nothing else, said Foxwell. “Change often takes time but it is inevitable and we’re seeing it happen before our very eyes.”

5.23.17 BALTIMORE, MD- From Left, Comptroller Peter Franchot; Secretary of Agriculture, Joseph Bartenfelder; Benjamin H. Wu, Deputy Secretary of Commerce; and Kevin Atticks, Executive Director of the Maryland Winery Association and the Brewery Association of Maryland, seen here drinking some Old Oriole Park Bohemian Beer at Peabody Heights Brewery after unveiling The Official Maryland Baseball & Brew Scorecard. (Maximilian Franz/The Daily Record)

5.23.17 BALTIMORE, MD- From left, Comptroller Peter Franchot; Secretary of Agriculture Joseph Bartenfelder; Benjamin H. Wu, deputy secretary of commerce; and Kevin Atticks, executive director of the Maryland Winery Association and the Brewery Association of Maryland, drink some Old Oriole Park Bohemian Beer at Peabody Heights Brewery. (Maximilian Franz/The Daily Record)

Foxwell downplayed concerns that the call to strongly regulate the industry was in some way focused on preventing an increase in underage drinking should the state change the laws pertaining to how much craft brewers can produce and sell on site. Instead, he suggested the resistance had more to do with protecting members of licensed beverage industry, including tavern owners and wholesale distributors.

“One thing we’ve found through the years is that any time someone says it’s all about the children it’s usually about the money,” Foxwell said.

So far it appears the interest, at least publicly, in changing the comptroller’s powers are limited to the House of Delegates.

A spokesman for Senate President Thomas V. Mike Miller Jr. declined to comment on the possibility of legislation.

The kerfuffle would pit two powerful Democrats with deep ties to the liquor industry against each other.

Busch formerly chaired the House Economic Matters Committee, which is charged with overseeing all liquor-related legislation that passes through the House. Additionally, his campaign treasurer is Neal Katcef, president of Katcef Brothers Inc., an Annapolis-based alcohol wholesaler.

Franchot, through the office he has held since 2007, oversees an agency that is responsible for collecting taxes from the industry and enforcing state liquor laws. Over the years he has also received numerous campaign contributions from members of the industry he regulates.

Foxwell said that despite those contributions Franchot has “demonstrated a willingness to break with friends and supporters when the public interest hangs in the balance.”

The attempt to limit Franchot’s power, should it materialize, is not without precedent. Members of his own party have sought not only to punish him for his stances on issues but have characterized him as a self-promoter who sometimes uses his office as a bully pulpit on issues that have no relationship to the duties of the agency.

In 2013, lawmakers in the House and Senate sponsored bills aimed at eliminating the Field Enforcement Division. The agency within the comptroller’s office is responsible for enforcing the state’s liquor, motor vehicle fuel, and tobacco laws. The failed effort was seen by many as retribution for Franchot’s vocal opposition to expanded gaming and his 2012 call for Miller to step down as Senate president after the session ended without a completed budget after Miller tied such a deal to failed effort to authorize a casino in Prince George’s County.

Similarly, lawmakers have ignored Franchot or engaged in back-and-forth letters chiding him for his calls for post Labor Day School starts or for a faster pace to projects for installing air conditioning in Baltimore County classrooms. The legislature has tried to strip authority away from the Board of Public Works, of which Franchot is a member, over some school construction issues.

In 2008, the Senate briefly stripped the comptroller’s office budget of two key positions, including the chief of staff and Foxwell, who was then the deputy comptroller. The move came as Franchot vocally opposed attempts to legalize slot machines in the state.

“Peter Franchot can take it,” Foxwell said. “In the end, the hits he’s taking from the Annapolis political establishment is nothing compared to the hits the craft beer industry would have taken from House Bill 1283 as originally written. That bill, as prepared, would have ended the craft beer industry in Maryland.”

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