February 5, 2013

LePage's liquor bill aims to repay hospital debt

The emergency legislation says that the state will control liquor revenue, with a private contractor handling other tasks.

By Jessica Hall jhall@pressherald.com
Staff Writer

Gov. Paul LePage has proposed emergency legislation to increase the portion of liquor revenues the state collects as part of his plan to pay off Medicaid debt to the state's hospitals.

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Staff Photo by Shawn Patrick Ouellette: Liquor on display at Downeast Beverage on Commercial St. in Portland Thursday, September 6, 2012.

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Gabe Souza/Staff Photographer: Gov. Paul LePage held a press conference at the University of New England's College of Dental Medicine Patient Care Center Building, Tuesday, January 15, 2013, to announce his proposal to use future liquor sale revenues as security against a bond that would pay the state's share of the hospital debt.

2013 Press Herald file/Gabe Souza

Additional Photos Below

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The bill calls for a contractor to handle monitoring inventory, managing accounts, advertising, and coordinating with suppliers.

The governor said last month that, after its current liquor contract expires in 2014, the state would take back management of liquor sales and seek a contractor to handle only distribution.

But the proposed legislation, submitted Monday, says the state would control the proceeds from liquor sales, with "a private sector person to provide administration, trade marketing and distribution and warehousing activities."

As emergency legislation, the proposal needs approval from two-thirds of the House and two-thirds of the Senate. It would become law immediately.

Under the proposal, the state would pay off its debt to the hospitals by issuing bonds for as much as $187 million, to be repaid from liquor sales.

In years when more money comes from liquor sales than is needed for repayment of the bonds, the state could use as much as $7 million for the Department of Health and Human Services and the Department of Environmental Protection for drinking water systems and wastewater treatment. The rest, if any, would be used for construction on highways and bridges.

Once the bonds have been paid off, the state would transfer any money in the fund to the Maine Budget Stabilization Fund, often called the rainy day fund.

Last week, Maine's current wholesale liquor distributor, Maine Beverage Co., offered the state a guaranteed $320 million to extend its contract without a bid process. LePage quickly rejected the offer, saying the contract is worth more.

From mid-2004 through 2011, liquor sales totaled $864.7 million under the 10-year contract awarded to Maine Beverage Co., according to financial documents filed with the state.

Maine officials hope to collect more money from liquor sales and lower retail prices by $2 to $7 per bottle to make the state more competitive with New Hampshire. The state also has said it wants to pay higher commissions to agency liquor stores.

 

Jessica Hall can be contacted at 791-6316 or at:

jhall@pressherald.com

 

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Additional Photos

click image to enlarge

A Crown Royal display at the Bow Street Market in Freeport. Maine's top liquor official said Wednesday, Jan. 16, 2013 that the state will seek a contractor for wholesale liquor operations that will handle administration, distribution and marketing. That contradicts a plan outlined Tuesday by Gov. Paul Le- Page

Gordon Chibroski / Staff Photographer

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Gabe Souza/Staff Photographer: This graphs shows the debt owed by the State of Maine to hospitals throughout the state, seen at a press conference held by Gov. Paul LePage at the University of New England's College of Dental Medicine Patient Care Center Building, Tuesday, January 15, 2013. LePage's proposal is to use future liquor sale revenues as security against a bond that would pay the state's share of the hospital debt.

click image to enlarge

Speaking from a podium with a slogan of "Paying Our Bills, Creating Maine Jobs," Gov. Paul LePage held a press conference at the University of New England's College of Dental Medicine Patient Care Center Building, Tuesday, January 15, 2013, to announce his plan to pay hospitals back the $484 million they are owed by using future liquor-sale revenues as security against a bond that would pay the state's share of the hospital debt.

Gabe Souza / Staff Photographer

click image to enlarge

Staff Photo by Shawn Patrick Ouellette: Liquor on display at Downeast Beverage on Commercial St. in Portland Thursday, September 6, 2012.

click image to enlarge

Liquor is on display at Downeast Beverage on Commercial Street in Portland on Thursday, Sept. 6, 2012.

Shawn Patrick Ouellette / Staff Photographer

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Eighteen states have an agency charged with overseeing the wholesale or retail sale of liquor or wine, but only Pennsylvania and Utah exert complete control over all such sales.

fotolia.com photo



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