Commonwealth Journal

July 10, 2013

Spirited Debate

Girdler & Turner’s disagreement over liquor stores creates brew-haha among alcohol control officials

by Chris Harris
Commonwealth Journal

Somerset —

Rarely have potables been so political as they are in Pulaski County, where a veritable war of words has erupted between mayor and state legislator over an effort to bring more liquor stores to Pulaski County.
On Tuesday, a Kentucky legisla-tive subcommittee acted to deny Somerset’s effort to obtain additio-nal liquor licenses over the five the state had tentatively approved back in January. Sitting on that panel was Pulaski’s state representative Tommy Turner.
The decision of the Administrative Regulations Review Subcommittee could have ripples across the state, noted Somerset Mayor Eddie Girdler, who was not at all happy — if not surprised — with what took place in Frankfort this week.
“It’s not unexpected,” said Girdler. “We knew based on the information that we had that the committee would not be for us at this stage.
“There are 23 other cities involved, and only one person who sits on that board who represents Somerset,” added Girdler, referring to Turner. 
The City of Somerset had successfully lobbied the Kentucky Department of Alcoholic Beverage this past spring to grant the city five additional Retail Liquor Package licenses for liquor stores (those selling distilled spirits and wine; beer licenses are unlimited) after the agency had originally granted the city only five such quota licenses back in January — and selected to receive them were stores that Girdler felt were too small to provide the sort of economic he was hoping for (such as from Liquor World and its planned $5 million investment in a local shopping center).
Girdler’s case was that the city represented a bigger market than the population of just under 12,000 would suggest, due to county size and tourism, and that the town could support more than five liquor stores — and if it couldn’t, that the free market should be allowed to sort that out. The ABC consented and brought Somerset’s issue to the table along for review of regulations of almost two dozen other Kentucky communities relating to liquor licensing.
Girdler noted that the five license figure had never been set in stone yet — all this was merely part of a process. 
When things got to the subcommittee, however, Turner disagreed.
“What is important is what the people voted for,” he said. “The people voted for five and so that’s what I support.”
At the time of the June 26, 2012 election, no quotas for liquor licenses had even been considered by state ABC — that didn’t happen until months later, after potential store owners had filed applications following the election — and there was nothing about five licenses on the ballot.
Turner, however, told the Commonwealth Journal that “a lot of people believed that based on population, there would be five licenses.” 
CNHI News Service Frankfort correspondent Ronnie Ellis reported in an article on Tuesday’s meeting that the ABC Board pointed out that since 1983 when the state began using the one license per
2,300 residents formula — which would equal approximately five based on Somerset’s city population — only two cities voted to go “wet” in the next 25 or so years. But in the last five, 22 cities have approved such referenda and often those cities can support more than the number of licenses produced by the formula, especially wet cities in otherwise dry counties.
ABC legal counsel Steve Humphress said the board has in the past awarded all of a county’s potential licenses to wet cities in dry counties, citing Bowling Green as an example. He and ABC Commissioner Freddie Higdon said there were no objections to the change at a public comment hearing and economic studies indicate the city can support more than five licenses.
Additionally, Higdon said, if the board allotted licenses based on Pulaski County’s population of 64,000 as it did in Bowling Green there could be as many as 23 licenses in Somerset.
According to Ellis, lawmakers who disagreed included Turner, a Republican, and Rep. Jimmie Lee, an Elizabethtown Democrat who felt it was unfair to the five existing businesses that they would face competition from other stores.
Girdler feels this represents using the political process to establish a monopoly.
“I think monopolies are bad and un-American,” he said. “Alcohol sales should be competitive and open to the competitive environment. ... Certain people on the general assembly believe that there should be monopolies.”
Things intensified when Girdler made the comment in the meeting that “everyone knows a representative who lives in the county,” referring to Turner, and was told by the committee chairperson not to personalize his comments.
It’s something that Turner took personally, as he told the Commonwealth Journal. 
“It’s unfortunate that the mayor wants to make it about personal issues,” he said. “It’s about my beliefs. The first comment he made when he got up there was about me being from the county. The chairman asked him to quit making inflammatory accusations about who lives in the county or city. We’re all created equal and trying to do what is the best for us. The mayor seems to think that everyone it the county is different from everyone in the city, and that troubles me.”
Girdler has a starkly different view of the exchange. “I said I live in the city; I know how the vote went. (Turner) did not live in the city, and did not vote in the election. What the chairman said was that we weren’t here to discuss those kinds of issues. They were making the point of how the city voted. My only point was that I live in the city and voted, and those who did not participate could not know what the city wanted.”
Turner also told the Commonwealth Journal that citizens have raised concerns that Somerset is using taxpayer money to hire an attorney (representing the city in the effort to get more liquor licenses) “to represent big liquor.”
Turner, who said he is opposed to liquor sales in the first place, added, “I don’t think taxpayer money should be used like that.”
Girdler again responded sharply to the Commonwealth Journal.
“That’s nonsense,” he said. “This is a voter-approved situation. I respect the voters’ wishes. Once the voters decide something, implementation of it is up to the city council and the mayor.
“The idea that we’re using taxpayer money to support the liquor industry? It’s actually the reverse,” he continued. “They’re using the political process to create monopolies. To me, you’re helping taxpayers and citizens who buy the products by having free competition. The other way is the socialist, communist way.”
Turner said he was opposed to the extra licenses for multiple reasons, including those mentioned and the perception that because Girdler has mentioned Liquor World specifically, that the licenses would be pre-selected before the ABC’s review process — “which is illegal,” noted the state representative.
“Was there an attempt or something here to help pre-select who it was going to be (getting the licenses)?” asked Turner rhetorically. “Some people said that it could be interpreted as pre-selection.”
The subcommittee voted unanimously with one member passing to find the ABC’s regulation deficient. That sends the question to the governor who can still implement the regulation, which could then only be overturned by a vote of the full General Assembly when it convenes, reported Ellis.
According to Girdler, it gets hairier than that, however. 
“The way the process works, (the subcommittee) asked if the ABC board concurred with Mr. Turner’s motion to stop Somerset, and the ABC said no, they stood by their recommendation,” said Girdler. “The only recourse the committee had was to make the entire rule-making deficient for the entire state. In order to attack Somerset, they stopped regulations for the entire state. Unfortunately for the other 23 cities — in order to punish Somerset through the political process, they actually had to punish the entire state of Kentucky.”
So does that mean that with no regulations, communities could open an unlimited amount of liquor stores? Girdler wouldn’t go that far, but he did suggest that a case could be made for basing Somerset’s quota on regulations that go by county population.
“To me, it defaults back to the only regulation in place (and) because of our population (of about 64,000), the county is theoretically eligible for 26 licenses,” said Girdler. “Richmond, Bowling Green, other cities do it by the previous regulation, that let competition and market forces decide who will survive.
“Ten (licenses), in my view, is a whole lot better (for the existing stores) than 26,” he added. “We think though that the ABC and governor’s office will reach some type of reasonable assurance. The ABC has the power. The committee cannot tell the ABC what to do. (Governor Steve Beshear) has always been gracious to Somerset. We have had a strong working relationship with his office, and we think he’ll look at what benefits the entire state and not single out Somerset.”
The three liquor stores pursuing legal action with attorneys present for the meeting — Wildcat Beer, Wine and Spirits, First Stop Party Supply, and Apple’s Wine and Spirits (two liquor retailers not involved are pharmacy chains Rite-Aid and Walgreens) — issued a statement to the Commonwealth Journal on Wednesday claiming victory following this week’s subcommittee ruling.
“Today the legislative committee overseeing regulations setting the number of liquor licenses in Somerset voted to disapprove an additional five licenses,” read the statement. “We commend the legislative committee for finding that Somerset should have five licenses, as already provided in the law, and for voting against changing the rules after they had been relied on by the people and businesses in Somerset. 
“We thank the senators and representatives on the committee, with a special thanks to Representative Turner, who stood up for what is right and to require that the law be followed.”
 First Stop owner Charlotte Perdicaris was quoted by Ellis in his article for CNHI as singling out the Richmond-Manchester retailer Liquor World as being the source of the disagreement.
“This is all about Liquor World,” she said after Tuesday’s hearing. “They did not get a license and we did. That’s what this is about.”