Tag Archives: Adam Pagnucco

turnout, voter registration

Does Making Registration Easier Cause More Voting?

Today, I am pleased to present a guest post from Adam Pagnucco:

In this year’s session of the General Assembly, Democrats will be introducing legislation providing for automatic registration of voters.  While the details vary between proposals, the concept is that state agencies would proactively “forward to election officials data about anyone who meets the age, residency and citizenship criteria to vote.”  Individuals would be allowed to opt out if they wish.  Democrats clearly believe this would increase the number of voters who support their party.  Republicans also believe that since they are openly opposing the idea.

Are they right?  Would more registration lead to more voting?

The State of Maryland has taken many steps to make registering and voting easier, including early voting (2010), online registration (2012) and expansion of early voting from six to eight days (2013).  Same day registration during early voting will be in effect for the first time in 2016.  The state has also offered applicants for driver’s licenses the opportunity to register as voters in conformance with federal law since 1995.

Maryland has seen steady increases in voter registration over the years.  The graph below shows statewide registered voters in both primary and general elections since 1990.  While there are slight variations in individual cycles, registration has gone up by about 4-5% every two years.

Voter Registrations graph

Has that resulted in more voting?  Much has been made of declining turnout in the past, and there is something to that: the turnout rate has fallen from 61% in the 1994 general election to 47% in 2014.  It has also declined from 81% in the 1992 general election to 74% in 2012.  But looking at the turnout rate alone can be misleading.  If the number of actual voters increases at a slower rate than the number of registered voters, the turnout rate can fall even if actual voting rises.  In fact, if more aggressive voter registration outreach brings in voters who are less likely to vote, that is exactly what could happen.  The test here is whether actual voting is going up along with registration.

First, let’s look at primaries.  The graph below shows the total number of primary election voters in Maryland since the 1990 elections.  These elections are very sensitive to the circumstances of offices on the ballot.  At the gubernatorial level, primary voting peaked in 1994, 2002 and 2006.  The former two years saw open Governor seats while the latter saw a rare competitive U.S. Senate race.  Primary voting tanked in 1990 and 1998, when incumbent Democrat Governors were running for second terms.  At the presidential level, primary voting surged in 2008 when Barack Obama was in a competitive race with Hillary Clinton.  Primary voting fell dramatically in years when an incumbent President was on the ballot (1996, 2004 and 2012).  These candidate dynamics overwhelmed any effects of increasing registrations.

Primary Voting graph

General elections see much steadier patterns of voting.  The graph below shows the total number of general election voters in Maryland since the 1990 elections.  The absolute number of voters in both gubernatorial generals and presidential generals has been rising steadily since the 1990s – with the notable exception of a divergence in the 2010-2014 period.  Presidential voting has gone up every year since 1996, but gubernatorial voting went down between 2010 and 2014.  This is the same period during which early voting (2010), online registration (2012) and an increase in early voting days (2013) were implemented.

General Voting graph

Let’s look at this presidential vs. gubernatorial split more closely.  The popularity of President Barack Obama may be a factor in increasing the number of voters in recent presidential elections.  Obama gained 62% of the vote in Maryland in both 2008 and 2012 and his approval rating in Maryland has been above 50% for most of his time in office.  The chart below shows changes in registrations and voting for each Maryland jurisdiction between the 2004 and 2012 general elections.  The two counties that gave Obama more than 80% of their vote in 2012 – Baltimore City and Prince George’s County – saw increases in both registrations and the number of actual voters greatly exceeding state averages.  Counties opposing Obama saw rises in registration and voting too, but not nearly as much.

Presidential Voting chart

The gubernatorial elections tell a very different story.  The chart below shows changes in registrations and voting for each Maryland jurisdiction between the 2010 and 2014 general elections.  Statewide, registrations were up by 7% while the number of voters fell by 7%.  But voting behavior differed between counties supporting Larry Hogan and those supporting Anthony Brown.  In the ten jurisdictions that gave Hogan 70% or more of their vote, the actual number of voters fell by 3%.  In the four jurisdictions that supported Brown, the actual number of voters fell by 8%.  Registrations rose by 7% for both groups.

Gubernatorial Voting chart

Increased registration has coincided with more voting in presidential elections and less voting in the 2014 gubernatorial election.  Why is that happening?  Here’s a theory: voters have access to much more information about presidential candidates than state or local candidates and are therefore more likely to vote for the former.  In fact, state and local candidates target voters with long histories of regular voting with their mail and field programs while they ignore voters with sparse histories – including new voters.  Declining local media coverage of state and local races reinforces this information gap.  So the registration efforts of Democrats through legislation and party activities may help fortify the margins of presidential candidates and federal candidates running in presidential years, but they did not help the party in 2014.  Not only did the Democratic nominee for Governor lose, but the Republicans picked up a record number of seats in the House of Delegates, captured the Howard County Executive seat and almost knocked off Congressman John Delaney – all while voter registration was rising.

There’s nothing wrong with making voter registration more convenient.  But given the above, there is little evidence to suggest that Democrats at the state and local level will significantly benefit from it.  There is also little evidence that Republicans should fear it.

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Department of Liquor Control

The Liquor Monopoly’s Preposterous Claims of Improvement

Today, I’m pleased to present a guest post by Adam Pagnucco:

On February 4, representatives of Montgomery County’s Department of Liquor Control (DLC) headed to Annapolis to brief the county’s state legislators on their operations. The stakes were high. DLC’s Executive Director had abruptly left his position six days before and legislation was pending on whether to allow voters to decide on opening up the monopoly to private sector competition. As of this writing, 2000 people have signed a petition in support of that legislation.

DLC’s message to the legislators is that improvements were underway, but they would take two months to take effect. As Delegate Charles Barkley (D-39) noted, that coincides with the end of the General Assembly’s session. Barkley said, “If we’re going to do anything, we have to do it before we get out of here—and of course, after a two-month period, it’s too late.”

DLC also claimed to have a 98.5% delivery accuracy rate. Delegate Kirill Reznik (D-39) replied, “If all of what the DLC does is comparable to or better than private industry . . . why does every restaurant manager I talk with beg me to get rid of this system?”

DLC has had problems and has been promising to make improvements for a long, LONG time. Consider the following.

  1. In 2005, then-DLC Executive Director George Griffin (who just recently left) outlined his improvement efforts to the National Alcohol Beverage Control Association:

In a department-wide project called Enterprise Resource Planning (ERP), the DLC is upgrading its systems in all areas, with an emphasis on integration. “POS (point of sale), inventory control, accounting, the warehouse, licensee ordering, buyers: they’ll all be tied together,” said Griffin, “from the retail stores, which will have running inventories, to our drivers, who will be equipped with handhelds.”

Ten years later, the county’s Inspector General found that DLC’s warehouse was being run with sticky notes. The Inspector General found that the warehouse was missing as many as 154 cases a day without anyone investigating why.

  1. A 2007 article in the Washington City Paper noted extensive problems with DLC’s special order system. The article contains this quote:

When Griffin took over the DLC, he inherited a department with low morale and little motivation. “The department had not been operating well and was sort of seen as an outcast from the rest of the county government in a way,” the director says. “I used to joke around and say, ‘This department was like, in a family, the crazy aunt who lives upstairs. None of us talk about her. You’re kind of embarrassed to admit that she exists, but everyone wants her money.”

The same problems persist a decade later. Many licensees would not refer to the DLC as “a crazy aunt” because that characterization is far too kind.

  1. A year ago, DLC launched a new inventory system to catalog, order and deliver its products. Griffin said, “It was a little rough getting started, but it’s gradually getting better.” But NBC4 found that the new system made ordering and delivery worse. American Tap Room owner Mike Jones said, “It’s getting increasingly worse. . . . This has been one of the most frustrating processes I’ve ever been involved in, where you’re almost pleading and begging with officials to get something done.”
  1. In late November, the County Executive said that complaints about DLC were “overblown.” One month later, DLC suffered a historic delivery meltdown in the week between Christmas and New Year’s Eve.
  1. Last June, DLC developed an “Improvement Action Plan” to improve its operations. The Restaurant Association of Maryland surveyed its members about how DLC was doing eight months after this plan was adopted. Here are a few survey responses from restaurant owners and managers on a number of issues.

On Special Orders

What frustrates me the most is the lack of care/regard for special order items. After waiting 15 days for certain cases of wine, I get a camera shot from my vendor who is at the warehouse staring at all the missing cases just sitting in my designated space. Infuriating!

Not been able to speak to someone who knows what is going on with my order 2) If you run out of product, good luck getting it back in stock at a reasonable time with a once a week delivery and order system is impossible to keep availability. 3) For weeks I was out of several wines and after waiting and talking to the sales rep. I was informed that the wines were delivered to the county. Called them and talked to several people without a clear answer so I decided to go to DLC and find out what they had there for me. They were surprised that the wines were there because they could not find them on the computer as being delivered and in my cubicle waiting for weeks to be delivered.

On Regular Stock

The DLC constantly runs out of inventory, delivers late and never apologizes. Also, anytime you go to the DLC to pick stuff up, all you see are guys standing around by the ‘no smoking’ sign, and smoking. They are lazy and many of them do nothing.

Products that should be widely available are out of stock – Blue Moon six pack bottles, Corona 24 oz. cans, Sierra Nevada six pack bottles.

On Billing

I was charged for 6 cases of stock wine that NEVER CAME! I spent hours on the phone trying to resolve the issue. They sent the 6 cases . . . of the WRONG wine 2 weeks after the fact. Never refunded the money and wouldn’t take the order back.

It is impossible to know track on the DLC website how much will be pulled out of your bank account and when. The amounts directly debited from our bank account never match the invoices.

On Delivery

The DLC doesn’t care for or understand the products they are delivering. It’s why we receive wrong boxes, out of date items, improperly handled merchandise and a general sense lacking of any genuine appreciation for their jobs.

Over all there is no sense of urgency or organization with the DLC. Paying 20%+ for product over what we pay in DC is just insane. Recently we did not get product in for a wine dinner we were having and we placed the order 3 weeks prior and they even showed it as an in stock!

The above history makes it obvious that DLC’s promises to improve cannot be believed. Delegate Barkley is right; they are trying to run out the clock and prevent anything positive from getting done. And what should get done?

Thousands of people know the answer: End the Monopoly.

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Eighth Congressional District

Three Strategies for Winning CD8

Today, I am pleased to present a guest post from Adam Pagnucco:

With roughly ten weeks until early voting begins in the 2016 primary, candidates for Congress in District 8 are entering the home stretch. Three candidates are leading the field, and each of them has a different strategy for winning. Whichever one of these strategies is best suited for the race will play a major role in determining the winner.

And these strategies are:

Spend

Roll Call recently reported that Total Wine co-owner David Trone made a $900,000 ten-day TV and radio ad buy in early February. Bethesda Magazine’s Lou Peck wrote, “The Trone campaign is making what is known in TV ad lingo as a 600-point buy: The aim is to ensure that 80 percent of adult viewers see an ad seven times or more.” And since Trone has nearly limitless resources and has vowed to spend “whatever it takes” to win, we should expect to see more of this.

Let’s put Trone’s opening bid in context. First, in ten days, he spent more than Senator Jamie Raskin’s entire cash on hand ($869,000) and almost as much as Kathleen Matthews’ entire cash on hand ($1.1 million). Second, this one expenditure is almost equal to Chris Van Hollen’s total spending in the 2002 primary ($1.1 million). Third, it’s more than half of what Congressional District 6 candidate John Delaney paid SKD Knickerbocker for media production and ad buys ($1.7 million) in the entire 2012 primary. And there’s still three months to go.

Trone must find Delaney’s success encouraging. And he certainly has a success story to share. But this year’s CD8 race is different in many respects from the CD6 race in 2012.

  1. CD8 is jam-packed with liberal Democrats in Takoma Park, Silver Spring, Bethesda, Chevy Chase, Kensington and Wheaton, while half of CD6 is located in considerably less liberal Western Maryland. The latter district is indisputably more hospitable to self-made businessmen like Trone and Delaney.
  1. Delaney’s principal rival, then-State Senator Rob Garagiola, did not have an aggressive grassroots operation as does Senator Jamie Raskin.
  1. The 2012 campaign did not feature a prominent female candidate like Kathleen Matthews.
  1. Delaney was endorsed by Bill Clinton and the Washington Post. Trone has no obvious connection to the Clintons and we will see what the Post chooses to do.

Trone definitely has the attention of the other candidates, with Delegate Kumar Barve sending out an email titled “Fighting Big Bullies” and Raskin stating, “Public office is something you earn, not something you buy.” Trone seems likely to break local race spending records. The big question is how CD8 Democratic primary voters will respond.

Organize

Jamie Raskin has built what is probably the biggest grassroots organizing operation in the county since Van Hollen’s 2002 race. Unlike most candidates who hide their internal campaign measures, Raskin puts them out for all to see. He has adeptly grown from his Takoma Park/Silver Spring base and tapped into activist networks all over the district, aided by his legions of local elected endorsers. He has responded to Kathleen Matthews by assembling a voluminous “Women for Jamie” group. And there is little question that a huge majority of the precinct-level liberal activists are with him.

The big question about Raskin is whether the time he is spending in Annapolis will impede his campaign’s ability to grow. Raskin is a superb one-on-one and small group campaigner. No one is better in a backyard full of progressives. Unlike many people with his level of intellect, Raskin comes across as both smart AND likable – a great talent for a politician. But with Raskin tied up in the Mike Miller Senate Office Building through early April, those assets are not as deployable and they don’t transfer quite as well to television or mail.

Another question about Raskin’s network is how far it penetrates into the community. He definitely has the activist liberals who are critical for winning State Senate and Delegate races. But what about PTA officers and volunteers, civic association leaders, faith leaders and small business people? Raskin is going to be outspent by both Trone and Matthews and his network must be big enough to offset that. If it is, Raskin can corral the progressive vote and win.

Stand Out

Three, maybe four, candidates will have the resources to compete. All of them will have a progressive message. All of them will talk about standard Democratic issues that are also being raised in the presidential campaign. But only one of them is a woman and only one of them has 25 years of experience on television. That’s Kathleen Matthews.

Let’s understand that nearly 60% of Montgomery County’s electorate is female no matter how you cut the data. The Matthews campaign certainly gets that. Below is the cover of the eight-page foldout lit piece that is currently being distributed by their field operation. You don’t need to see the rest of it; the cover says it all.

Matthews Door Cover

Here’s the reaction of the regular female voter who received that piece. “It’s a nice brochure. I haven’t thought about the race. But she is certainly hitting all the right marks for me as a female Dem. I have to admit that the thought of getting another woman in Congress, particularly someone with her knowledge and high profile, is tempting.”

That’s music to the ears of the Matthews campaign.

Matthews has a quiet, but growing field operation that is now roaming the district. Unlike Raskin, the campaign does not advertise its statistics. Her real strength is going to be on television. Trone can run all the ads he wants, but none of these candidates can match Matthews’ abilities on camera. Her campaign’s weakness is that it has not had much of a local dimension to this point. But one TV ad on a hot local issue like Metro could go a long way towards remedying that. No one is better equipped than Matthews to do a film shot at a Metro station with frustrated riders, and then pivot to the camera declaring, “Metro riders deserve better. When I am elected to Congress, I’ll fight to fix Metro!” Then the riders will shout, “We’re Metro riders and we approve this message!

Folks, these are all competent campaigns and this race is turning into one for the ages. It’s going to be a great three months until the end. Enjoy the ride!

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Peter Franchot

Adam Pagnucco: Outside the Statehouse, Franchot is King

The following is a guest post by Adam Pagnucco:

Senate President Mike Miller and Comptroller Peter Franchot have renewed their decade-long feud, to the delight of journalists, bloggers and pundits alike. Whether it’s about slots, tax collection issues, Baltimore County public school air conditioners or just the joy of a good barroom brawl, the Miller-Franchot war sometimes abates but never ends. Speculation pops up every couple of years that the Senate President will find a challenger to take the Comptroller out. After all, Miller is arguably the most powerful non-Governor in Maryland history and the statehouse is his domain. But outside the statehouse, Franchot is King.

Why do I say that? Consider the following.

1. Statewide Results

Below are the vote totals and percentages of major party candidates for Governor, Comptroller and Attorney General for the last two general elections. (Attorney General Doug Gansler, who had no opponent in 2010, is omitted.) Franchot’s results are the best in the field. In fact, to find statewide politicians who regularly matched or exceeded his margins, you would have to go back more than a decade to the days of William Donald Schaefer, Louie Goldstein and Joe Curran.

Franchot Top Statewide Vote Getters

2. County Results

Lieutenant Governor Anthony Brown was the ultimate creation of the state Democratic establishment. And Franchot? Well… let’s just say he’s not. Below is a comparison of the votes obtained by the two in every county in the 2014 general election. Franchot received more votes than Brown in every local jurisdiction, including Brown’s home base of Prince George’s. In the big three liberal jurisdictions (Montgomery, Baltimore City and Prince George’s), the vote totals for Brown and Franchot were similar, suggesting that loyal Democrats supported both of them. Franchot’s edge came from the rest of the state. He received at least 50% more votes than Brown in 15 of 24 counties, including the critical swing jurisdictions of Baltimore County and Anne Arundel. Brown carried just four jurisdictions against Larry Hogan – Prince George’s, Baltimore City, Montgomery and Charles. Franchot carried all of them in the general election, plus Anne Arundel, Baltimore County, Dorchester, Howard, Kent and Talbot. Tell me again why Franchot should fear the establishment?

Franchot County Results

3. Legislative Districts and Sub-District Results

The State Board of Elections has data on the performance of Franchot, Brown and Hogan for every one of Maryland’s 67 legislative districts and sub-districts. (The state has 47 Senate districts but many of them are carved up into smaller sub-districts for Delegates.) This further illuminates the electoral dominance of Franchot over Brown.

Franchot received more votes than Brown in 63 of the 67 districts. All four in which Brown did better were in Prince George’s. Franchot received more votes than either Brown OR Hogan in 32 districts – nearly half of them. Franchot’s occasional deviations from progressive orthodoxy didn’t hurt him in liberal Montgomery or Baltimore City, as he out-polled Brown in every district either entirely or partially within their boundaries.

In the following nine districts, Franchot received more than twice as many votes as Brown.

Franchot Brown DistrictsThese districts go from moderately red to deep red. They are represented by a combined 8 Republican Senators, 21 Republican Delegates and 1 Democratic Senator – Baltimore County’s renegade blue dog, Jim Brochin. In many of these places, liberal Democrats are considered alien life forms. But Franchot has a following here.

Perhaps the most interesting of these districts is Dundalk-based District 6. Dundalk is a fabled ancestral home of white, blue-collar, unionized Democrats, but it has been trending to the GOP. In 2014, Hogan defeated Brown here with 76% of the vote. Democratic Delegate John Olszewski Jr. lost the Senate race to unknown Republican Johnny Ray Salling, who raised just $15,429. The district’s three Delegate seats flipped from all Democratic to all Republican – and it wasn’t close. A Republican succeeded Olszewski’s father in Dundalk’s County Council seat with 62% of the vote. Baltimore County Executive Kevin Kamenetz lost the fifteen Dundalk precincts to an obscure, underfinanced Republican by a 59-41% margin. Attorney General Brian Frosh lost to a no-name Republican here by 53-41%. But Franchot won the district 52-48.

I know what you’re thinking: Franchot had a weak opponent. Sure. But 2014 was a year in which seemingly weak Republicans had great success. They knocked out numerous Democratic incumbents, including prominent ones like Olszewski, Senator Roy Dyson, Delegates John Bohanan, David Rudolph and Norm Conway, and Wicomico County Executive Rick Pollitt. They came close to defeating Brochin and Senator Ron Young. The ultimate no-name Republican was Larry Hogan, a man who had never served in public office, had no starting name recognition and had to draw on public financing to compete with the MUCH better funded Anthony Brown. Remember when Brown referred to the general election as “a little bit of a mole hill?” But Hogan won in the best year in recent memory for “weak” Republicans. Amid all this tumult, Franchot increased his win margin in the general election by two points over 2010.

Here is the key question: could it be that Franchot’s socially liberal, fiscally moderate stance combines the best of Hogan and Brown and has made him Maryland’s most popular state-level Democrat? Maryland voters approved gay marriage and the Dream Act in 2012, and according to a recent Washington Post poll, support many liberal priorities. But they elected an openly anti-tax Governor and, according to the above poll, rank the economy and taxes as their second and third issue priorities. (Education is number one.) This mix of liberalism and moderation fits Franchot’s issue profile better than any other prominent Maryland politician.

Democrats should ponder all of this as they prepare to campaign against Hogan in 2018.

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Eighth Congressional District, Kathleen Matthews

All Politics is Local . . . Right?

Today, I’m pleased to present a guest post by Adam Pagnucco.

“All politics is local” according to the famous quote by former U.S. House Speaker Tip O’Neill. Moreover, any occasional viewer of Hardball, the MSNBC politics show featuring his former Chief of Staff Chris Matthews, can probably hear the host’s voice repeating it over and over. In fact, he actually titled an entire chapter of one of his books with that phrase and explored its meaning in detail.

So who would disagree with this hallowed political wisdom? Apparently, none other than Chris Matthews’ wife and current candidate for Congress in District 8, Kathleen Matthews.

Kathleen Matthews is a formidable candidate with many strengths. She has name recognition from her long-time career as a local news anchor that would make most candidates green with envy. She’s great on TV and radio. She’s smart, well-spoken and attractive. She raises all the resources she needs to win. And she is a female candidate running against a group of mostly men, which is a plus in a Democratic primary tilted heavily to female voters.

But her campaign is so generic that it would be equally applicable to someone running in California, Massachusetts or New York.

Check out her issues page and her Facebook page. Almost everything her campaign discusses is a national issue. There’s nothing inherently wrong with talking about national issues.  Congress is a federal institution and deals with national and international matters. Gun control, the environment, education, the Middle East, women’s health and more are all important and she’s right to discuss them

The problem is that there’s almost no locally relevant content to go along with it. It feeds the vibe that her campaign is planned and executed by national-level, D.C.-connected operatives with no understanding of Montgomery, Carroll and Frederick Counties. And this is particularly surprising given the fact that Kathleen Matthews covered local issues as a journalist for twenty-five years.

Want to go local? Here’s how.

1. Metro

It’s impossible to understate the frustration that Metro riders have with WMATA. And how can one miss the drumbeat of local press coverage–assuming that one actually READS local press coverage? Riders want a fix and Members of Congress can play a big role. But Metro is buried in the Environment section of Matthews’ issues page.

Delegate Kumar Barve, one of Matthews’ opponents, gets it. Here is one of his many statements on Facebook about it. “METRO NEEDS TO BE FIXED!” blares Barve, echoing a sentiment with which few CD8 voters would disagree. Freshman Delegate Marc Korman made WMATA arguably his number one issue in 2014 and defeated a better-funded opponent with the Apple Ballot in Bethesda, an area where Matthews needs to do well. (Does any member of Matthews’ campaign staff know what an Apple Ballot is?)

Barve WMATA

2. Other Transportation Issues

Transportation and education have been the two most important issues in Montgomery County since, well . . .  no one here remembers when they weren’t the Big Two. But Matthews’ issues page has no transportation section. All of the key transportation solutions on the table required big federal bucks: the Purple Line, getting money for the Corridor Cities Transitway, remedying congestion on I-270, dealing with the American Legion Bridge and getting financing for Montgomery County’s proposed bus rapid transit system are all appropriate issues for federal involvement.

3. Immigration

This issue is both national and local and it is another no-show on the Matthews issues page. Many CD8 communities, including Takoma Park, Silver Spring and Wheaton, are filled with first- and second-generation immigrants of many nationalities. Barve and Delegate Ana Sol Gutiérrez are talking about this a lot and most CD8 candidates are addressing it. Is Matthews?

4. Localize National Issues

There are ways to talk about national issues while rooting them firmly in local affairs. Take a look at Senator Jamie Raskin’s issues page. He touches on many of the same matters as Matthews, but he discusses them in Maryland-specific terms while touting his specific accomplishments. Here are two more examples of Raskin discussing education and the environment employing a local frame. Whatever one may think of Raskin, he is definitely running in Maryland!

Raskin schools

Raskin environment

5. Meet the Neighbors

This is Raskin’s great strength. His campaign has deployed one of the best local field operations in recent memory and openly brags about its success. Raskin’s supporters extend beyond the establishment types (who can sometimes be a mixed blessing) and go down into the ranks of grass-roots activists–the kind of people who provide ground energy for campaigns. Some of his solicitations have so many names on them that even the most diligent reader can’t make it to the end. Does the Matthews campaign have lists of precinct officials, PTA officers, civic association board members and religious leaders to contact? How many of these local leaders have been asked to meet the candidate? Matthews is by many accounts an impressive person capable of making a good impression. How much is that strength being utilized?

6. Know Our History

The Annapolis establishment is mostly with Raskin, and the rest of it is with Barve. That’s not necessarily a problem for Matthews, as there is a certain segment of the electorate that dislikes political “bosses” and they respond well to perhaps her most important supporter, Comptroller Peter Franchot. So what does her campaign do? It lumps in news of Franchot’s endorsement with endorsements by two U.S. Senators with no connection to Maryland as well as former Lieutenant Governor Kathleen Kennedy Townsend.

Anyone with any knowledge of Maryland politics would know that Townsend was responsible for one of the most humiliating defeats in state Democratic Party history, the loss of the Governor’s seat to Republican Bob Ehrlich, and it all began when unknown retired retail clerk Bob Fustero got more than 20% of the vote in the Democratic primary. The Franchot endorsement is a big deal.  It can be used to good effect with fiscally moderate Democrats, especially in Carroll and Frederick Counties, and it can be used to fuel a similar anti-establishment narrative to the one used by now-Congressman John Delaney in 2012. But announcing the Townsend endorsement at the same time sent a signal to anyone acquainted with state politics that Matthews’ campaign has little understanding of our history or current political scene.

One more thing. Where  is former County Executive Doug Duncan?  He may be Matthews’ most prominent local supporter other than Franchot and he has a sizeable following in Montgomery County. He was a key early backer of John Delaney. But he is not mentioned at all on Matthews’ website.

7. Come Out Strong on a Hot Local Issue

Speaking of the Comptroller, he has a knack for latching onto hot local issues that help him build his base. For example, what do air conditioners in Baltimore County Public Schools have to do with the Comptroller’s core duties of tax collection and regulation of alcohol and tobacco? Absolutely nothing. But Franchot and Governor Larry Hogan are using the issue to bedevil a common adversary, Baltimore County Executive Kevin Kamenetz, and are fortifying their support in one of the state’s key jurisdictions.

The counterpart issue in Montgomery County is the county’s notorious liquor monopoly, on which the Comptroller has been a resolute opponent. David Lublin has written of the substantial opportunities available to any politician who dares to challenge the county employee union and call for open competition. Even if you disagree with me on the issue (and I am its organizer), consider three facts:

First, a substantial number of Democrats want the alcohol laws to be reformed. Second, if just one candidate in a multi-candidate race agrees with that position, those voters will flow towards that one candidate and away from the others, creating an advantage. And third, the monopoly’s principal defender, the county employee union, would never endorse Matthews no matter what since there are several other candidates in the field with long pro-labor voting records. So Matthews has nothing to lose and everything to gain. Why not call for Ending the Monopoly and pick up some votes?

Look, folks.  Kathleen Matthews is a top-tier candidate and she could definitely win. But if she doesn’t, this is why: so far, her campaign does not believe that All Politics is Local. Or really, that Any Politics is Local at All.

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alcohol, Department of Liquor Control, Montgomery County

MoCo’s Stunted Restaurant Industry

The following is a guest post by Adam Pagnucco:

One of the dimensions to the current debate about Montgomery County’s Department of Liquor Control (DLC) that has not been empirically explored is its impact on the county’s restaurant industry.  Restaurant owners have many complaints about DLC and some have said that entrepreneurs will not open new establishments here because of it.  However, several urban districts in the county have lots of restaurants that seem to be doing just fine.  So what’s going on?

Let’s investigate.

One of the many programs run by the U.S. Census Bureau is the Economic Census, a very detailed look at industries by geography that is updated every five years.  Among the statistics collected by the Economic Census are the number of establishments, the sales of those establishments, and the number of employees.  Below are the combined totals of two industry segments – drinking places (industry code 7224) and full-service restaurants (industry code 722511) – for 22 jurisdictions in the Washington-Baltimore region in 2012.  This data does not include limited service restaurants (like fast food places) that often do not sell alcohol.  Data on drinking places for Fauquier and Stafford Counties and the Cities of Fairfax, Falls Church and Fredericksburg is not available because it does not meet the reporting thresholds established by Census.

Restaurant Stats
MoCo is a significant player in the region’s restaurant industry.  It has 11% of the region’s bars and restaurants, 10% of sales and 10% of employees.  But it also has 13% of the region’s population.  MoCo matters because of its sheer size.  What happens when the restaurant industry’s statistics are presented on a per capita basis?  Using Census population data for the five-year period of 2009-2013, here’s what that looks like.

Restaurant Stats per Capita
In terms of establishments per thousand residents, MoCo (at 0.65) is not terribly different from the regional average (0.73).  MoCo’s figure is also close to the two jurisdictions which most resemble it in education and income levels, Fairfax (0.66) and Howard (0.61).  But on the next two measures, MoCo falls short.  MoCo’s restaurant sales per resident ($789) are 20% below the regional average ($989).  They are also below Fairfax ($900), Howard ($930) and Loudoun ($826).  MoCo’s restaurant employment is just as bad.  MoCo’s figure (14.2 restaurant employees per thousand residents) is 23% below the regional average (18.4) and lags most other places in the region, large and small.

Why could this be happening?  It’s not because of low income levels – MoCo does just fine on that measure as do many jurisdictions in the region.  It’s not because of comparative tax burden.  The District of Columbia’s Chief Financial Officer finds that MoCo’s tax burden is not out of line with its neighbors.  Do MoCo residents simply not like going out to eat?  Are we a county of shut-ins?

Frank Shull, the Chief Operating Officer of RW Restaurant Group, which owns several county restaurants, explained why the industry is lagging when he appeared before the County Council last spring.  According to Bethesda Magazine:

A partner in the Robert Wiedmaier Restaurant Group testified Friday that Montgomery County’s Department of Liquor Control (DLC) is “an evil empire to most people in the business.”

In testimony before the County Council’s Ad Hoc Committee on Liquor Control, Frank Shull said poor selection, bad service and high prices keep Washington, D.C., restaurateurs from opening restaurants in the county.

“A majority of good operators in D.C. will not come into the county,” Shull said. “We have this discussion all the time. Restaurants don’t want to because they don’t want to deal with the DLC.”

Jackie Greenbaum, owner of Jackie’s Restaurant and the Quarry House Tavern in Silver Spring, detailed the challenges of dealing with DLC when she signed our petition to End the Monopoly:

I own 2 restaurants in Montgomery County, both well known for the breadth of their beer, wine and liquor lists. The difficulty in creating and maintaining these lists because of the county controlled system is extraordinary. It adds hours of unnecessary labor to my payroll costs, diminishes the quality of my beverage programs through the inconsistency of stock, unavailability of products and errors in delivery, and drives up the cost of the products we sell–which must either be absorbed by us (therefore diminishing our profits) or passed on to the consumer resulting in higher menu prices. This system causes all but the most intrepid restaurant owners to dumb down their offerings because it’s far far easier and ensures Montgomery County will never compete with DC in terms of the quality and creativity of its restaurants.

What would happen if MoCo’s restaurant industry were average in size relative to its population?  In other words, how big would the industry be if it had 0.73 establishments per thousand residents, $989 in sales per resident and 18.4 employees per thousand residents, which are the averages for the Washington-Baltimore region?  Extrapolating from the data above, the county would have 82 more restaurants, $198 million more in sales and 4,184 more employees.  All of this would create more tax revenue for both the county and the state.

How do we get there?  Let’s be honest and acknowledge that there could be many factors governing the size of the county’s restaurant industry and DLC is just one of them.  But in the opinion of the folks who actually run restaurants, DLC is an important impediment to their doing business.  The County Council has proposed reform, but in the opinion of the two largest alcohol distributors in the state, it won’t work and they won’t participate.

Restaurants are not just businesses.  They are critical cultural assets.  People decide where to live in part because of the abundance and quality of food options.  This industry is a large part of our quality of life.  By unleashing its spirit of entrepreneurship, we enrich all of society.  So how do we do that?

Here’s one way.  End the Monopoly.

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alcohol

Why the Council’s Liquor Reform Won’t Work

Today, I am pleased to present a guest post from Adam Pagnucco:

Rising to the defense of the county’s liquor monopoly, the County Council has put forward a proposal for reform.  They claim it will cure most of the problems at the Department of Liquor Control (DLC) while causing none of the budgetary consequences of allowing full private sector competition with the department.  Are they right?

Let’s examine their recommendation in detail.

The council’s proposal focuses on “special orders,” which are requests by customers for products not in DLC’s regular stock.  The DLC’s performance in delivering these products is a huge source of complaints for restaurants and retailers, who claim that DLC regularly shorts orders, misses orders, delivers the wrong products and charges mark-ups that are significantly higher than in the District of Columbia.  The following story is a typical description of DLC’s operations in this area.

Mike Hill, general manager of Adega Wine Cellars & Café in Silver Spring, said they have problems getting specialty wines and craft beer.

“If we like a beer or wine and we want to bring that into our store, the turnaround time can be eight days if we’re lucky or two to three months to not at all in some cases,” Hill said.

He said delivery times vary from 11 a.m. to 7:30 p.m. He explained that sometimes he receives orders that should have gone to other restaurants or stores. Other times his business receives sealed boxes that are labeled as one type of wine, but turn out to be another type when they open it.

“About 75 percent of my wall is bare because of items we’re unable to get,” Hill said.

The council is right to be concerned about this.  Their proposal would allow retailers and restaurants to purchase specialty wines and beer directly from private distributors.  That sounds great on the surface, but the devil is in the details.  Let’s have a look at the major features of what the council has in mind.

  1. DLC remains in control.

DLC has sole authority to determine what beverages are regular stock or special order, and the council’s proposed legislation does nothing to change that.  DLC would also have sole authority to levy and administer a fee on any transactions between private customers and private distributors, an issue explored further below.  Because DLC continues to preside over, control and impose charges on any purchases under the council’s proposal, that guarantees that its many inefficiencies will continue to plague the entire system.

  1. The economics don’t work.

The council would have private distributors make small deliveries of specialty products while retaining most of the volume for direct delivery by DLC.  That’s a problem.  Distribution is a capital-intensive industry.  Assets like warehouses and trucks are expensive to maintain.  To make money, distributors need to move lots of volume through their warehouses and send out lots of full trucks.  If they can’t do that, many won’t be able to profit under the council’s proposal and they could simply stay out.  Since distributors strike exclusive arrangements with manufacturers, this factor alone could exclude many beverages from the council’s proposed new system, thereby limiting its scope and defeating its purpose.

The two largest distributors in Maryland, Reliable Churchill and Republic National, made this argument in a July 2015 letter to the county council.  They wrote:

We suggest that some wholesalers, including us, will not be able to deliver special orders for economic reasons.  At present, private wholesalers deliver only to the Department of Liquor Control (the “Department”) warehouse so they have no regular delivery routes in the County.  To fulfill a special order, the private wholesaler would have to make a special trip to the licensee.  By their nature, special orders are for small quantities.  The profit on such a small transaction would not cover our delivery costs incurred by sending a truck for a special delivery.  In other words, there is no financial incentive to make the special delivery and, in fact, a disincentive.

We do not want the [council’s] resolution to raise expectations unnecessarily, so we are writing again.  As you know, private wholesalers are not required to fill all orders.  Also a winery and distillery can use only one private distributor in Maryland.  A distributor can refuse to fill an order if it is not economically feasible.  Common sense dictates that a private wholesaler would not fill orders costing them money because they are not in business to lose money.  It is almost certain that Republic National and Reliable cannot afford to make a special delivery to a licensee.

Wholesalers Letter to Council 1 Wholesalers Letter to Council 2

  1. The do-nothing fee.

The most controversial aspect of the council’s proposal is that DLC would be able to charge a fee on any special order transactions between private customers and private distributors even though it does nothing to facilitate them.  According to the council’s legislation, the fee would be “set at a level sufficient to replace the Department of Liquor Control for Montgomery County’s estimated revenue lost by allowing private licensed Maryland wholesalers to sell and distribute beer and light wine products…”  So DLC would be made whole.  It would be the sole determiner of exactly how high of a fee would be required to make it whole.  And since DLC is hugely inefficient in the special order segment – something even the council admits – the fee would reflect DLC’s bloated service costs rather than any cost savings obtained by going private.  And who would ultimately wind up paying this fee?  That’s right, the consumer.

Here’s what the state’s two largest distributors wrote about the do-nothing fee (which they characterize as a tax) in the letter shown above.

We also suggest that the local tax you intend to impose on special orders is counter-productive.  It makes a bad economic situation worse.  First, increasing the cost of products will encourage people to shop outside the County, thereby creating a hit for County business.  The County should lower prices to keep business in the county.  Already, tens of millions of dollars are spent outside the county on alcoholic beverages due to the comparatively higher costs.  Second, the tax makes delivery of a special order even more costly, discouraging wholesalers from delivering special orders.  Wholesalers cannot charge more in Montgomery County to recoup a local charge.  Third, state law precludes local taxation of alcoholic beverages, thereby suggesting that the local charge is illegal and cannot be implemented.  Fourth, we expect significant opposition to this proposal of a local charge based on its statewide implications.  Last, in some ways, the County should pay wholesalers to deliver special orders because they are solving a County problem at their expense.  We know that will never happen.

What if the do-nothing fee is removed?  Well, there’s a catch: the county issues bonds backed by liquor profits.  The council and the County Executive use this as a basis for opposing full private competition but it’s also relevant to the council’s proposal.  The County Executive believes that the do-nothing fee is required to protect those bonds in the case that any liquor distribution is done privately.  In the memo below, the Executive writes to the Council President:

I have been advised by the County’s Bond Counsel that edits were required to earlier drafts of the [liquor control] legislation to avoid a downgrade to the over $100 million in outstanding Department of Liquor Control (DLC) Revenue bonds as well as prevent litigation from existing bondholders due to a material deterioration in the security of the bonds.  According to Bond Counsel, at the time the bonds were sold bondholders had the security of a near monopoly created by State law.  If this legislation is approved that near monopoly will no longer exist under State law; so the security of the bonds will have changed.  Prior drafts of the legislation did not limit the reduction in DLC revenues pledged for the payment of the bonds and did not mandate the imposition of the surcharge [on private transactions].

The best option for reducing the possibility of a downgrade or a bondholder action is to require that the surcharge collected from the wholesalers is equal to lost revenues.  Therefore we have inserted provisions making the surcharge mandatory and “set at a level sufficient to replace… the estimated revenue lost.”  This provision should remain even after the bonds have been paid to protect County services supported by the DLC earnings transfer.

Leggett DLC 1 Leggett DLC 2

And so if the council’s recommendation is adopted with a do-nothing fee, it will – surprise! – do nothing because distributors won’t participate.  And if it is adopted without one, it would cause many of the same budgetary issues as an End the Monopoly approach with few of the offsetting benefits.

  1. A Get Out of Jail Free Card for DLC.

Remember the board game Monopoly?  One of its most famous playing cards allows a player to Get Out of Jail Free.  That’s exactly what the council’s proposal does for DLC.

Get out of jail free-1

The proposals by Comptroller Peter Franchot and Delegate Bill Frick would expose DLC to full private sector competition – the only force that will compel DLC to improve.  But the council’s system would keep DLC in the driver’s seat.  DLC would decide which beverages to sell, which ones to delegate to the private sector and exactly how much money it will charge to be “compensated.”  It will remain free to run its warehouse with sticky notes and to suffer shortages of as many as 154 cases a day.  Its broken ordering system will now include extra accounting and paperwork to administer the do-nothing fee.  And if anyone speaks up in the future in favor of real change, the DLC’s bureaucracy will say, “Wait a minute.  A new procedure has just been put in place.  We need time to implement it.  And once we do, we promise things will improve.”  And a year will pass.  And five years.  And then a decade.  And businesses will continue to struggle while consumers simply flee to the District of Columbia, which they do now.

The council’s proposal is designed to force citizens – consumers and businesses alike – to subjugate their interests to the liquor monopoly.  Good government demands the opposite: the county should serve the interests of the citizens.  And there’s only one way to do that.

End the Monopoly.

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alcohol, Montgomery County

Residents Speak Out Against the Liquor Monopoly

Del. Bill Frick Proposes to Allow Voters to Decide

The movement to end the Montgomery County liquor monopoly is gaining momentum. Six legislators plan to introduce legislation to allow voters to decide the question. Comptroller Franchot penned an opinion piece last week arguing for its end. But I suspect that it’s the political potency of the issue with voters that will give it continued forward momentum.

The following is by Adam Pagnucco:

As of this writing, over 900 people have signed the petition asking Montgomery County’s State Senators and Delegates to end the county’s archaic liquor monopoly. Here are a few comments from petition signers that truly say it all.

*****

First of all, I appreciate Roger Berliner’s and the other County leaders’ embrace of this cause. Montgomery County, Maryland’s liquor laws are an embarrassing and harmful anachronism. County sales of alcohol do not serve any public purpose but they do perpetuate an expensive and useless bureaucracy. The County should not be a seller of alcohol but rather should serve as a responsible regulator of private restaurants and stores selling alcohol.

Retaining the current system discourages the entry of businesses into the County and results in a conflict of interest for the County as both a regulator and a vendor selling to and competing with private businesses. Getting the County out of the liquor business would allow private enterprise to offer consumers more choices and more reasonable prices. At the same time, it would allow the County to focus on its regulatory role, while gaining additional tax revenue from businesses to lower individual taxes.

I have lived in this County for more than sixty years. This useless charade cannot be ended too soon.
Kenneth Markison, Chevy Chase, MD

I own 2 restaurants in Montgomery County, both well known for the breadth of their beer, wine and liquor lists. The difficulty in creating and maintaining these lists because of the county controlled system is extraordinary. It adds hours of unnecessary labor to my payroll costs, diminishes the quality of my beverage programs through the inconsistency of stock, unavailability of products and errors in delivery, and drives up the cost of the products we sell – which must either be absorbed by us (therefore diminishing our profits) or passed on to the consumer resulting in higher menu prices. This system causes all but the most intrepid restaurant owners to dumb down their offerings because it’s far far easier and ensures Montgomery County will never compete with DC in terms of the quality and creativity of its restaurants.
Jackie Greenbaum, Washington, DC

[Editor’s note: Ms. Greenbaum is an owner of Jackie’s Restaurant and the legendary Quarry House Tavern in Silver Spring. She has written about the Monopoly before.]

I’m signing because this is 2015, not 1925.
Debra Van Alstyne, Potomac, MD

Ridiculous that this is still in place. Way past time to do away with it.
Deborah Grossman, Takoma Park, MD

I’m signing because I’m sick of being forced to drive out of MoCo to get the wines I want. It causes MoCo restaurants time, money, and frustration. It discourages new restaurants from considering moving to MoCo. The current system is cumbersome, useless, embarrassing, archaic, and typically paternalistic. I don’t need this County to make my buying decisions for me, thank you.
Lezlie Crosswhite, North Potomac, MD

I’m tired of having to go to DC or VA to have a wide choice of wines plus the prices are so much better.
Sandra Satterfield, Rockville, MD

I am an economist, retired from the FTC after over 30 years. I worked exclusively on anti-trust cases. Monopolies hurt consumers.
Russ Parker, Bethesda, MD

According to the Maryland Declaration of Rights “monopolies are odious”. If monopolies are so odious then why does Montgomery County have a monopoly on the sale of alcoholic beverages in Montgomery County?
Justin McInerny, Chevy Chase, MD

… because the monopoly is outdated, stifling, and ridiculous. And annoying.
Diana Conway, Potomac, MD

It has been proven to be a flawed system that restricts the store owner’s ability to maximize sales and be self-reliant on their success. The internal inventory controls have been called into question as of late as well. Time to open it up to the free market!
John Hodges, Rockville, MD

I am tired of County stores with poor quality and customer service. I have to shop with a cart that has a pole on it so I can be tracked through the store, then I have to stand behind a piece of blue tape on the floor to be helped by someone who doesn’t want to be there. The selection is poor and I find myself shopping elsewhere. It’s time to get rid of soviet era liquor stores.
Richard Neimand, Silver Spring, MD

We’re tired of driving to Total Wine in Laurel and Calvert-Woodley in D.C. to find good selections of beer and wine at reasonable prices. We want to spend our money here, but not at the premium we have to pay because of this ridiculous set up. Also, we want to see more restaurants locate here and they need access to good selections of fine wines, craft liquors, etc.
Mike Diegel, Silver Spring, MD

This system no longer (if it ever did) makes sense.
Michael Webb, Germantown, MD

It is time for the free market to work its magic and for the county to cure its addiction to alcohol (revenues). A remarkably inefficient, and at times corrupt, system should not be tolerated by consumers and businesses directly affected by its protection. Let voters decide what happens.
Allen Perper, Silver Spring, MD

I spend money out of county in an effort to avoid the ridiculous monopoly in Montgomery County. It is insulting to my intelligence.
Stephen Sugg, Rockville, MD

Business is for the private sector, governing is for the government.|
Yovav Sever, Rockville, MD

I buy much of my alcohol outside MoCo. I want a wider selection and to not have to drive!
Laurie Wilner, Potomac, MD

The county should NOT be selling alcohol at all! I always thought that was stupid. The county has anti-drink programs and yet sells the stuff…let’s teach our kids hypocrisy, shall we?
Pat Burton, Gaithersburg, MD

I’m signing because I do purchase all of my beer and wine in Washington, D.C.
Michael Reust, Takoma Park, MD

I live in MoCo and have to go to Frederick County (or Virginia) to get a couple of things that the county won’t allow to be sold. The current system is a total joke.
Victoria Cross, Gaithersburg, MD

I’m signing because I resent the county’s imposing a monopoly on its citizens. We’re grownups. Let us decide who to buy our alcohol from, and what to buy. I love Mo Co except this liquor business is an embarrassment.
David Austin, Bethesda, MD

I don’t believe the county should have a monopoly on the liquor we buy or the choices restaurants have in what they provide customers. Currently, and for MANY years, I’ve purchased all my liquor in DC. Too bad for Maryland and time to smarten up.
Anne Claysmith, Bethesda, MD

I hate having to drive to neighboring counties to find liquor stores with a decent variety to choose from.
Mark Eakin, Silver Spring, MD

I worked at a bar in Silver Spring for 4 years, and during that time we were frequently unable to keep regular beers, liquors, and supplies we relied on in stock due to the County’s apathy towards customer interests
Jennifer Burrell, Laurel, MD

The county should not be allowed to continue its monopoly on alcohol sales to our businesses. I fully support allowing private sellers to compete with DLC in Montgomery County and putting this issue to a referendum so that it is clear how many county citizens desire a private competition approach.
Michael Fetchko, Bethesda, MD

What he said.
Ralph Bennett, Silver Spring, MD

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alcohol, Montgomery County

MoCo Doesn’t Need Its Liquor Money

Today, I am pleased to present a guest post by Adam Pagnucco:

Even though MoCo consumers are fleeing the county’s archaic liquor monopoly, county officials are going all out to save it. Their arguments boil down to essentially one point: we need the money, and terrible things will happen unless we get it. The County Executive’s spokesman has said that a reduction in liquor monopoly money “means a reduction of county services or an increase in taxes.” And Council Member Hans Riemer has said that a loss of liquor money would mean “jeopardizing our ability to hire teachers or police officers.”

Are they right? Let’s look at the data.

First, let’s consider the nature of the county’s budget. It is not a static, zero-sum thing. Rather, it is a dynamic and growing thing that increases almost every year. The county deliberately sets property tax rates to increase collections at the rate of inflation (its charter limit) regularly. Income and energy tax collections rise with private-sector growth. State aid, mostly going towards public schools, has been rising. All of these factors have contributed to a steadily growing county budget.

The chart below shows a comparison of total county revenues, net income from the county’s Department of Liquor Control (DLC), and the rate of inflation in the Washington-Baltimore metro area from Fiscal Year 2004 through Fiscal Year 2016.

MoCo Revenue vs Inflation

A few things stand out. First, total revenues grew in ten of these twelve years, with small declines occurring in 2010 and 2015. (Data for the latter year is still an estimate). Second, total revenue has been growing at an average rate (4.2% a year) that is almost double the rate of local price inflation (2.4%). Third, net income from the liquor monopoly is a tiny fraction of the county’s budget and has been largely stagnant. In 2004, liquor money was 0.74% of the county’s budget; in 2016, it is projected to be 0.47%. Part of this is because the county has begun issuing bonds against liquor profits and thus must pay debt service. But another part is that the monopoly is poorly managed. Over this period, the county saw an average annual revenue gain of $25 million from liquor and $140 million from other sources.

That means county revenues would still go up even without liquor monopoly money. There would be no need for cuts.

Comptroller Peter Franchot has proposed allowing the private sector to compete with the county’s Department of Liquor Control (DLC). What would happen to county revenues if that were to occur? That depends on how retailers, restaurants and consumers react. Let’s consider what would happen if DLC were well-managed, price competitive and truly focused on customers. Under this scenario, it might lose just 25% of its net income. Here’s how county revenues would have performed since 2004 if that were the case.

DLC loses 25 percent

In the real world, the county’s total revenues grew by an average 4.2% a year. If DLC had lost 25% of its net income, the county’s total revenues would have grown by an average 4.1%. There would be almost no difference to the county’s bottom line.

Now let’s suppose that DLC loses 50% of its net income. Here’s how that scenario would have played out.

DLC loses 50 percent

The county’s average annual total revenue growth changes from 4.2% to 3.9%. Again, not much difference.

Finally, let’s look at what would have happened had DLC net income disappeared entirely.

DLC loses 100 percent

The county’s annual total revenue growth changes from 4.2% to 3.7%. The latter number is still 55% greater than the average rate of price inflation in the Washington-Baltimore area (2.4%). Furthermore, let’s keep in mind that this scenario would only occur if DLC were so awful that all of its customers fled. If that’s the case, why should DLC be protected by a monopoly at all? And the data above completely omits any extra revenue the county would earn from a revitalized private sector free of the monopoly that it calls “an Evil Empire.” Extra money from property taxes and income taxes could close some of this gap.

This discussion is not exclusively hypothetical. In July, the County Council passed a mid-year savings plan that trimmed $54 million from the budget it had passed only two months before. That amount is more than twice as much as the county earns from its liquor monopoly. Public education and public safety were not jeopardized. That’s because the overall budget provided for a $209 million increase from the prior year’s estimated revenue. County government continues to grow and no apocalypse has occurred.

Finally, consider this. There are more than three thousand counties in the United States. Very few of them have MoCo’s resources. All of them except us have figured out how to pay for their priorities and balance their budgets without needing a liquor monopoly. Are MoCo’s elected officials the only county leaders in the entire United States who can’t figure out how to live without one? I think not; I have seen them deal with much more serious budget problems effectively.

The county government doesn’t need its liquor money. So let’s End the Monopoly.

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Congress

Fundraising in Congressional District 8

Today, I am pleased to present a guest post by Adam Pagnucco:

Money talks and people are talking about money. That’s the vibe in CD8, which could turn out to be the most expensive congressional race in Maryland history. Bethesda Magazine’s Lou Peck and the Washington Post’s Bill Turque have written about the overall numbers and individual donors in the race. Today, I dig deep into the data to reveal more details of the Democratic candidates’ fundraising.

First, the top-line numbers through the third quarter reported by Kathleen Matthews, Senator Jamie Raskin (D-20), Delegate Kumar Barve (D-17), Will Jawando, Delegate Ana Sol Gutierrez (D-18), David Anderson and former Montgomery County Council Member Valerie Ervin (who has withdrawn). Much of this has already been reported and it shows Matthews first, Raskin a close second and Barve third. With almost $3 million raised and more than two quarters to go, this race looks like a record breaker.

CD8 Top LineUnlike state and county contributions, federal contributions must be designated for the primary or the general. Among primary contributions, Matthews’ lead over Raskin grows slightly.

CD8 Primary GeneralBurn rate is the percentage of money raised that has already been spent. Matthews’ burn rate (16%) is far lower than Raskin’s (25%) or Barve’s (35%). That reflects her strategy of saving up for television.

CD8 Burn RateMatthews leads in big contributions. Her average individual contribution is nearly twice the amount of the rest of the field. Almost half of her fundraising has come from maximum individual contributions of $2,700 each. So far, Matthews has received more maximum checks than the rest of the field combined.

CD8 Avg Individual ContributionWhile Matthews has raised the most money, Raskin has a big edge in money raised in Maryland. In-state contributions have accounted for half of Raskin’s total, much higher than Matthews’ 23%. Barve’s in-state 45% ranks second, though he has raised less than half of Raskin’s total in Maryland.

CD8 Contributions by StateHere’s a look at fundraising from individuals in selected communities. The top seven locations are the largest population centers in CD8. Matthews leads in Chevy Chase and (narrowly) in Potomac, but Raskin has the lead in most other places. The bottom seven locations are major sources of contributions outside CD8 and Matthews leads everywhere (including in D.C.). Interestingly, Matthews has raised more money from New York City than from Bethesda. Also, Matthews has raised more money from Los Angeles than from Silver Spring, Takoma Park, Rockville and Kensington combined. That reflects her ability to tap into the Democratic establishment’s national donor network.

CD8 Individual Contributions by CommunityHere are a few takeaways from this data.

  1. Kathleen Matthews’ campaign was predicated on blowing away the rest of the field in fundraising. That is happening with the notable exception of Senator Jamie Raskin, who has so far remained close to her. One factor that could change that is if Matthews’ wealthy supporters open a Super PAC on her behalf. Super PACs are not supposed to coordinate directly with candidate campaigns, but they can raise unlimited contributions and spend them on both positive and negative communication. One can easily imagine twenty Matthews supporters each chipping in $100,000, thereby instantaneously bringing an extra $2 million into the race for their candidate.
  1. Senator Raskin’s strategy of community organizing is paying off big-time for his fundraising. He is leading or nearly tied in fundraising in every populous CD8 community except Chevy Chase and his relatively low average contribution rate leaves plenty of room for repeat contributions. His two biggest challenges are countering Matthews’ likely appeal to women and what happens to his campaign once he has to go back to Annapolis for session next January.
  1. The other candidates are either plainly non-viable or on the verge of getting there because they have not been able to keep up in the money race. That may have been a factor behind the Sierra Club’s endorsement of Senator Raskin. Delegate Barve is the Chair of the House Environment and Transportation Committee and that gives him enormous ability to shape state environmental legislation. He has been a serious player on a wide range of environmental issues that long predates Senator Raskin’s service in the General Assembly. The Sierra Club faced a tough choice between the two candidates from the perspective of policy and record, but they chose to jump in for Raskin. That’s not a knock on Barve, but more likely a judgment that Raskin is a stronger choice to take on Matthews. If more progressive groups make that kind of decision, the race will consolidate into a two-person contest between Matthews and Raskin.

And if that happens, here is the key question that will determine who wins. What will matter more? Senator Raskin’s large, enthusiastic and growing grassroots network? Or Kathleen Matthews’ fundraising prowess, media skills and membership in the electorate’s largest sub-component, white women? Your guess is as good as mine!

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