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Bob Odell
State Senator
District 8

June 15 , 2009

Senator Odell is Chairman of  the Ways and Means Committee, and member of the Energy, Environment and Economic Development Committee;  Finance Committee; Citizens Trade Policy Commission; State Park System Advisory Council; and Comprehensive Cancer Plan Oversight Board.

Senate District 8 towns: Acworth, Alstead, Charlestown, Claremont, Gilsum, Goshen, Langdon, Lempster, Marlow, New London, Newbury, Newport, Roxbury, Stoddard, Sullivan, Sunapee, Sutton, Unity, Walpole, Washington and Westmoreland.

 

While expanded gambling gets the headlines, liquor revenues and paying for our road maintenance are also part of the budgeting mix of challenges.

While overall retail sales at New Hampshire Liquor Commission stores were up 6% in the last fiscal year ending last June, the Claremont store fell nearly 3% at $2.9 million in sales, the Newport store was up 7% at $1.3 million, Walpole was down 1 1/2% at $1.9 million and the New London store was up nearly 4% at $4.3 million. 

The revenue from these state liquor stores located in Senate District 8 are significant but they pale against stores on the Massachusetts border and on the interstate highways. The state’s top store for sales at $26.5 million is the Hampton store on northbound I-95. Two stores in our region both pull Vermont traffic; the new store in Keene and the West Lebanon store each do around $10 million per year.

Why are legislators taking a look at store sales? And why are budget writers looking at what changes are appropriate to improve Liquor Commission operations as well as increase revenues?

The answer is that Liquor Commission had gross sales in the last fiscal year of $470 million selling 41 million bottles of wine and spirits. The commission profits of $112 million, up 6% from the prior year, stayed in the general fund to pay for state government operations. The Senate Ways and Means Committee has projected profits for the next fiscal year, starting on July 1 at $ $117.3 and $ 127.9 in the following year.

Governor Lynch proposed some changes in liquor commission operations. Mark Bodi, the chair of the three member commission and successor to now Representative Tony Maiola (Newport), came up with the Liquor Commission Modernization Act of 2009. HB 428, known as the “cider bill,” as it originally provided a definition of cider, became the vehicle for passing changes to liquor commission statutes. Reflecting a bit of an unsettled relationship with chairman Bodi, the House killed the bill on the floor last Wednesday. Wisely, anticipating that possibility, the Senate Finance Committee also put the cider bill language into the budget (HB2). 

The issues being dealt with in the budget negotiations include allowing the commission to move up to 5% of its operating budget, around $2 million, between budget lines. This would allow them, for example, to move quickly without Fiscal Committee or Governor and Council approval to make repairs, to take on a lease at advantageous pricing and to otherwise make spending decisions quickly to adjust to opportunities and changes in the marketplace. 

Now, the commission can close stores that are unprofitable but they would like to be able to close “underperforming” stores as well. And while the commission can establish “agency stores,” language could be adopted to make that process more acceptable to local communities. An agency store is a retailer who has an agreement with the state to allow them to sell spirits.

There are two stores in the north country, Errol with annual sales of $62 thousand and Pittsburg with sales of $82 thousand. The other agency store, in Greenville on the Massachusetts border, has sales of $1.4 million per year. The idea is to use new agency stores in small markets and underserved areas.

Overall, with much work to be done over the next few years, the next biennium should be the starting point to modernize the state liquor store system to increase revenue for the state, better serve customers and improve education, regulation and enforcement of our alcohol beverage laws. This week, we will see if the committees of conference agree.

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Highway funding, too, is a big part of the discussions as the legislature pushes for a June 25 wrap up of its work. The good news, as reported to the budget Committees of Conference last Thursday by Department of Transportation Commissioner George Campbell, is that federal stimulus money is providing a significant boost to the state’s paving program for interstates, primary and secondary highways. Some of the $129 million is already at work in our region. Two sections of I-89 are being repaved and the improvements to I-89 Exit 20 in Lebanon are being speeded up thanks to the money from Washington.

Normally, the state would receive about $140 million annually from the federal aid program. The stimulus package nearly doubles that allocation but everyone understands this is one time money. Up until 1998, we were paving about 500 miles of the 4,300 miles of state maintained roads. This year, thanks to federal money, 750 miles are being paved. Prudent maintenance calls for roads to be repaved every 7 years which means an average of about 600 miles per year. In 2008, using regular revenue streams, the state was able to pave only 280 miles. Where will the money come from to pave 600 miles two years out when the federal money dries up?

The answer, if the legislature goes along, is aggregation. That’s a new word for many of us. It means putting or aggregating the state’s interstate highways into the turnpike system. That will allow the tolls collected to be used to pay for the maintenance of those roads rather than funding the upkeep from the state highway fund. This is a big change and necessitates raising tolls throughout the system. There would be a $30 per monthly cap for frequent turnpike users.

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Bob Odell
State Senator
New Hampshire State House
107 North Main Street
Concord, NH 03301-4951

Telephone:  603-271-6733
Email:  rpojr@aol.com

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