Should Idaho alcohol licenses be liquid assets? 

Governor Butch Otter has called together a double top secret panel to discuss changes in the way liquor licenses are sold, distributed and monitored in Idaho. It’s double top secret because the panelists are given notebooks with top secret information that they can’t share with anyone outside the task force, and the press and the public are barred from their meetings.

The meetings are to consider making drastic changes in the Alcohol Beverage Control, run by the Idaho State Police.

The biggest and most controversial change would be how beer and wine, and liquor licenses are doled out. There is currently a 20-year waiting list with more than 300 people/vendors wanting to purchase a license. The ABC has been granted unprecedented power in determining how to enforce policies, based more on the enforcer’s suspicion of applicants than consistent policy.

In a meeting at the Boise Metro Chamber’s State & Federal Committee on Friday, a panel of guests discussed the issues with the committee. Currently, there are about 800 licenses in the state. Unless you want to wait the 20 years, you have to pay an unrealistically high price to get one from a license owner, not the state. Kevin Settles, owner of Bardenay, said he paid more than $300,000 for three licenses. And if you want one in Ketchum, you can pay more than $400,000 for one license. The state charges less than $1,000 for a license, but gets 10 percent of the sale of the license from one owner to the next.

Governor Otter wants to put some common sense into the process and make more licenses available. The problem is, many of the license owners are treating the licenses as assets. And there are stories floating around of people getting loans based on those assets, something Brian Ballard, of Hawley Troxell Ennis and Hawley, told the Chamber committee is illegal.

The task force has made no recommendations (although they were meeting secretly on Friday), but the governor is right: there needs to be major changes in how the ABC operates.

The current policy, established in the 1950s, was geared to sell a license for every 1,500 people in an area. It eliminates the free-enterprise system by not allowing companies who do the market research and want to open a restaurant and serve alcohol, the ability to do so.

This is where Governor Otter’s Libertarian leanings should apply practical reasoning to a web that continually spins around a liquor license policy that snares growth in the state. And the current policy becomes self-perpetuating, becoming a commodity in a closed market.

If the state passes legislation that would open the floodgates of alcohol licensing, the toughest nut to crack will be how to fairly compensate (if at all) those license owners who have leveraged their livelihood – some say retirement – on liquor license monopoly money.

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