Sometimes a “system” will evolve in a way that would never be consciously deigned if one were starting from scratch. I believe that New Jerey’s liquor license regime is a prime example. Aside from special cases (hotels of at least 100 rooms, airports, bowling alleys, and other politically favored locations), plenary retail consumption (bars and restaurants) and distribution licenses are issued by the local municipality and limited based upon population. The time has come to end this artificial scarcity and stop treating the licenses themselves as an article of commerce.<\/p>\n\n\n\n
In his State of the State speech last month (video<\/a> | text<\/a>), Governor Murphy had this to say about New Jersey’s liquor licensing scheme:<\/p>\n\n\n\n And I am greatly aware that some of, if not the, hardest hit businesses from the pandemic were our restaurants. And few were harder hit than the small neighborhood establishments \u2013 many, if not most, family-owned \u2013 that couldn\u2019t get a liquor license that is so critical to maintaining a healthy profit margin. While I am not convinced that current license holders are entitled to any compensation if their monopoly is ended, I do have a suggestion how the first part of the gradual expansion is could be effected in a way that would provide a financial benefit to them without a tax expenditure.<\/p>\n\n\n\n Suppose that we agreed to a four-year phase-in of unlimited liquor licenses. At the beginning of year 1 give every current license holder (the “mother” license) one additional license that can be used, sold, or pocketed. (For at least this phase the license could not be used in a different municipality unless both towns consented.) Then, in year 3 each holder of a mother license, whose year 1 “daughter” license is actually in use, would get another additional license. In this way current license holders will have had the benefit of six (4+2) years of an additional premises or the equivalent market value. True, the value will drop, but this will allow “mom and pop” restaurants to afford licenses, and at the end of the four-year period the numerical limitation will end. <\/p>\n\n\n\n Jay Bohn<\/p>\n\n\n\n February 20, 2023<\/p>\n","protected":false},"excerpt":{"rendered":" Sometimes a “system” will evolve in a way that would never be consciously deigned if one were starting from scratch. I believe that New Jerey’s liquor license regime is a prime example. Aside from special cases (hotels of at least 100 rooms, airports, bowling alleys, and other politically favored locations), plenary retail consumption (bars and … Continue reading “End Limit on Number of Liquor Licenses”<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,4],"tags":[],"class_list":["post-910","post","type-post","status-publish","format-standard","hentry","category-economics","category-government"],"_links":{"self":[{"href":"https:\/\/bohn.org\/wpmocha\/peanutgallery\/wp-json\/wp\/v2\/posts\/910","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bohn.org\/wpmocha\/peanutgallery\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bohn.org\/wpmocha\/peanutgallery\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bohn.org\/wpmocha\/peanutgallery\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/bohn.org\/wpmocha\/peanutgallery\/wp-json\/wp\/v2\/comments?post=910"}],"version-history":[{"count":7,"href":"https:\/\/bohn.org\/wpmocha\/peanutgallery\/wp-json\/wp\/v2\/posts\/910\/revisions"}],"predecessor-version":[{"id":922,"href":"https:\/\/bohn.org\/wpmocha\/peanutgallery\/wp-json\/wp\/v2\/posts\/910\/revisions\/922"}],"wp:attachment":[{"href":"https:\/\/bohn.org\/wpmocha\/peanutgallery\/wp-json\/wp\/v2\/media?parent=910"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bohn.org\/wpmocha\/peanutgallery\/wp-json\/wp\/v2\/categories?post=910"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bohn.org\/wpmocha\/peanutgallery\/wp-json\/wp\/v2\/tags?post=910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n
There\u2019s no other way to put it \u2013 our liquor licensing regime is antiquated and confusing. We rely on a foundation of rules written in the days immediately after Prohibition to govern a 21st century economy. That makes no sense.
It makes no sense to restaurateurs like Ehren Ryan, the chef\/owner \u2013 along with his wife, Nadine \u2013 of Millburn\u2019s Common Lot, where a liquor license can ensure the stability of his establishment. Ehren is with us today.
And so, I ask for your partnership in rewriting our liquor license laws to make them not just modern, but fair. The old rules have purposely created market scarcity and driven up costs to the point where a liquor license can draw seven figures.
For many small, independent restaurateurs \u2013 folks like Ehren, and many others like him in other communities, and especially those in Black and Brown communities where access to capital has historically been limited \u2013 that\u2019s just too high a price to pay.
Expanding the number of available liquor licenses will not only help keep our favorite local restaurants healthy, it will also help keep our economy healthy.
This won\u2019t be easy, but it will be worth it. We project that overhauling our liquor license regime will create upwards of 10,000 jobs annually and, over the next 10 years, generate up to $10 billion in new economic activity and $1 billion in new state and local revenues.
And here is how we can do it.
Right now, the number of liquor licenses allowed to be issued by any local government is one for every 3,000 residents. I propose that over the next few years, we gradually relax this requirement and expand the number of available licenses until the restriction is eliminated in its entirety and the market can work freely.
Meanwhile, we can maintain the local control that is so critical in making sure our downtowns retain the character that makes them so special.
Now, I fully recognize that some restaurants have made significant up-front investments to obtain their current licenses. We must be fair to them and I propose a targeted tax credit to support them as the supply of licenses grows.<\/p>\n<\/blockquote>\n\n\n\n