Liquor license reform is expected to be a top business discussion during the New Jersey Legislature’s lame duck session.
But legislative leadership at this past week’s League of Municipalities Conference seemed to put on ice the notion of actually reaching a resolution to it between now and the start of the new session in January.
“It’s a tough topic and to think we’re going to revise the entire liquor licensing industry during lame duck, to me, seems overly ambitious when I’ve seen it being talked about for over a decade,” said Senate President Nick Scutari.
“That’s something that is still a work in progress,” Assembly Speaker Craig Coughlin said.
But during his address at the League on Thursday, Gov. Phil Murphy said liquor license reform will remain one of his top priorities for 2024 if a lame-duck resolution isn’t reached.
“Over the past couple years, this has been a real white whale for our state — or, I suppose I should say, a real black barrel,” Murphy said.
“But we are going to get this done — because our family-run restaurants are counting on us.”
Since his State of the State address in 2023, Gov. Murphy has been calling for an overhaul of the Prohibition-era liquor licensing system.
He has called it antiquated and confusing and has proposed loosening the rules that limit localities to one license per 3,000 residents, before eliminating those limits altogether.
But the proposal has been met with strong opposition from those in the industry who fear it will greatly devalue existing licenses, which typically cost hundreds of thousands of dollars and most often increase in value to much higher than that.
Murphy’s reform plan calls for reimbursing license holders with tax credits in exchange for the lost value for their investments.
“It would be pretty difficult to make up for that with a tax credit,” Scutari said.
“We created a set of rules and people have operated within that framework,” Coughlin added. “And to change that now, to change their investment and their hard work, is probably something we should be really, really cautious about. Perhaps (their liquor license) is their retirement plan.”
Republicans agreed with the legislative leadership. But also said more can be done in terms of loosening restrictions on how many licenses a locality can have and transferring so-called pocket licenses – ones that are regularly renewed despite not being in use – between municipalities.
“If we have five licenses in Perth Amboy – not to pick on Perth Amboy – and none in Spring Lake Heights and they wanted to sell one to the other, I don’t believe that should be a restriction,” said Assemblyman Ned Thomson (R-30). “There are many ways we can work with this to keep the economy safe and to also make sure the regulations are followed.”
“We know there are a number of pocket licenses out there that don’t’ have a home,” added Senate Minority Leader Anthony Bucco (R-25). “And it may be necessary that before we make any kind of drastic move, we look at allowing those pocket licenses to be transferred among municipalities.
“It will help some municipalities that are limited to the number of licenses they can have and, at the same time, keep the value of the license.”
Bill S-3038 is a bipartisan measure that would loosen licensing conditions that have stymied the state’s craft brewery industry.
But despite the Legislature sending it to Murphy’s desk earlier this year, the governor said he won’t sign it without more overarching liquor license reform.
Senator Mike Testa (R-1) has contended that Murphy’s liquor license reform is “separate and apart from the business of breweries” and “should not be used as a bargaining chip.”
Murphy, however, said of liquor license reform will get done during his speech at the League of Municipalities: “I remain as confident as ever that – with the help of Speaker Coughlin and Senate President Scutari – we will find a solution. One that will give our small businesses a leg up while also protecting the investments made by owners who already have a liquor license.”