Business & Economy

Legislature approves own Liquor-Lottery merger plan

[T]he Legislature is poised to combine the Department of Liquor Control with the Vermont Lottery Commission, despite the House’s decision in April to scuttle an executive order from the governor calling for a merger.

Language to combine the two entities is now attached to H.238, a bill that would reorganize and modernize the state’s liquor laws. The Senate added the language earlier in the session, after the bill passed the House.

When the changes came back over, the House requested a conference committee to negotiate a final version, rather than adopting the Senate’s proposal. The committee, which had three representatives and three senators, finalized the merger plan Wednesday.

Both bodies approved the bill Thursday. It now heads to Gov. Phil Scott’s desk.

Baruth Ashe

Sen. Philip Baruth, D/P-Chittenden, left. File photo by Elizabeth Hewitt/VTDigger

H.238 sets up a task force to design the new department and merge the two existing entities on an aggressive timeline. The task force would present a plan to the Legislature in 2018.

“This is the most logical of the three mergers that were proposed in the executive orders” in January, said Sen. Philip Baruth, D/P-Chittenden.

Scott had also proposed merging the Department of Labor into the Agency of Commerce and Community Development, as well as creating a new Agency of Digital Services.

The Senate rejected the Labor-Commerce merger in February. Both chambers supported the Agency of Digital Services. The Senate supported the Liquor-Lottery merger, but the House objected.

“Liquor and Lottery are both businesses,” Baruth said. “There are millions of dollars in sales. They both warehouse their products. And so you have an actual sales arm in each case, and you have a board in each case that’s propagating rules and adjudicating disputes and regulating.”

“And they’re both heavily controlled, so it makes perfect sense that you would have one warehouse housing both and you would have one commissioner in charge of that joint operation,” Baruth said.

Rep. Tom Stevens, D-Waterbury, said he has proposed for five years to merge Liquor and the Lottery Commission. But he said the challenge of the executive order was allowing the governor to merge the two entities without input from the Legislature.

In 2015, Stevens supported a bill that set up a working group for the modernization of the Department of Liquor Control. He said, much like modernization, there needs to be more work to merge Liquor and the Lottery Commission.

“The most important part of this is the control of the products,” Stevens said. “I do not want to see us privatize the sale and then grow our sales through more liquor stores, which is what happens when you privatize.”

Scott had proposed to privatize both the warehouse and the sales, according to Stevens. He said privatizing the sale is what concerns him.

“In reality, the liquor and the lottery aren’t all the same,” he said. “They are controlled products and they provide money for the state, so they’re two businesses — not departments, they’re businesses. … None of us have business merger experience in a way that would happen in the private industry.”

He said the Department of Liquor Control’s annual sales are around $85 million, and the Lottery Commission’s annual sales are about $120 million. The profits go back to the state.

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Erin Mansfield

About Erin

Erin Mansfield covers health care and business for VTDigger. From 2013 to 2015, she wrote for the Rutland Herald and Times Argus. Erin holds a B.A. in Economics and Spanish from the State University of New York at Stony Brook, where she also attended journalism school. Erin has worked in public and private schools across Vermont and interned in the U.S. Senate. She has been published by the Columbia Journalism Review and the Society of Professional Journalists. She grew up in Killington.

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