Raise your glasses and toast the financial genius who – without increasing taxes, cutting services or employing accounting gimmicks – solved Maine’s budget crisis.
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Me.
I humbly thank you. Allow me to offer refills, so you can toast me again. Don’t worry about the cost. After all, it was by getting the liquor flowing that I restored the state’s general fund to liquidity.
It was simple, really. I discovered that Maine had been running its alcoholic-beverage operations about as effectively as Tiger Woods managed his social life. The state was practically begging neighboring New Hampshire to steal our booze business, and the Granite State was obliging. In the last fiscal year, New Hampshire turned a profit on its state-run liquor stores of more than $120 million. Their hooch honchos estimated that half that cash came from out-of-staters, with Maine accounting for almost $20 million, according to a knowledgeable industry source.
That’s just the profit we lost. The total sales were much greater.
No wonder. Maine’s wholesale and retail prices were being set by brainless bureaucrats, who apparently missed economics class the day they took up the concept of competition. Nobody ever explained to them that if consumers can buy the same thing cheaper elsewhere, they will.
And there was no question New Hampshire was selling liquor for a lot less than Maine. I randomly selected 20 products from this state’s December list of alcoholic-beverages specials and comparison shopped for the same bottles in Portsmouth.
The result: Only one item was a better deal in Maine. In two cases, New Hampshire’s regular price was the same as Maine’s sale price. But in 17 instances (that’s 85 percent), New Hampshire was the winner. From high-end cognacs to low-rent coffee brandies, the savings were significant. The average difference on my 20 items came to over three bucks a bottle.
Remember, that’s comparing our sale prices to their regular prices. No wonder millions of our hard-earned dollars went south.
To add insult to injury, New Hampshire was also the place to buy Maine’s liquor of choice: Allen’s Coffee Brandy. Allen’s is the largest selling brand in this state’s booze outlets, but it was a much better deal across the border. A 750-milliliter bottle of the stuff went for $10.99 here (that’s the non-sale price) and $7.49 there. The 1.75-liter size was an even bigger bargain. In Maine, it was $19.99; in New Hampshire, just $15.99.
There were, of course, still some reasons to buy liquor here at home. Desperation, for instance. When you ran dry on a Saturday night, you paid whatever it took to save the weekend. There was also the issue of legality. It was against the law to bring more than one bottle back from New Hampshire. By my calculations, roughly 10 percent of this state’s residents were obeying that statute. Mostly people who didn’t drink.
Here’s how I managed to recoup all that lost revenue and save the state. I went to see officials at Maine Beverage Co., the entity that in 2004 was granted a 10-year monopoly on the state’s wholesale liquor business for a fraction of the money Maine would have made if it had hung onto it. I got its executives drunk (“Have some more Chivas Regal. Can you believe it’s $4 a bottle cheaper in New Hampshire?”) and convinced them to end the deal early.
The rumor I used water-boarding to achieve this goal is untrue. It wasn’t water. Popov vodka was actually cheaper than water if you bought it in New Hampshire.
Once this state had resumed control of its wholesale booze business, I offered pricey licenses to any business that wanted a piece of the action. This time, though, there was no monopoly. Wholesalers had to compete with each other, which was easier to do because I ended the state’s control over prices. The multiple licensees paid more for their right to distribute alcohol than Maine Beverage ever had.
At the retail level, I did the same thing. Gone were the stupid rules about how many agency liquor stores each town could have. Anybody who wanted a license got one. And retailers were free to set their own prices.
Almost immediately, the cost of a bottle began falling statewide, the results of competition not only with New Hampshire, but also with other Maine stores. And as more people skipped their cross-border runs, instead stocking the liquor cabinet closer to home, revenue from alcohol taxes skyrocketed.
It wasn’t long before cars with “Live Free Or Die” license plates were filling parking lots of Maine package stores. Soon thereafter, New Hampshire declared bankruptcy, and all those businesses that had moved there to escape taxes shifted their operations to Maine.
“It wasn’t just about that state’s financial instability,” said one corporate exec who jumped the Piscataqua River. “It was also a quality-of-life issue. A lot of my workers drink Allen’s, and you can’t beat the price in Maine.”
Cheers.
You can thank me by e-mailing aldiamon@herniahill.net. Or by sending me a bottle of single-malt.
Don’t forget that New Hampshire has no sales tax. I believe the bureaucrats not only missed that day in economics class where competition was discussed, as you point out, but the evidence is clear that they flunked the course entirely.
Yeah, and could you bring Yuengling beer to to Maine? It’s America’s Oldest (and best) Brewery and it should have a presence in the state that Dirigos….
i don’t believe any democrats ever attended a hour of any economics class!
Look at President Barry (approval rating lowest of any president at this point in office), yelling at banks to lend again, isn’t that what got us here, government forcing banks to lend to people that can’t make the loan payments!
All i want for Christmas is the removal of democrats from all political offices!
Sorry, I can’t help myself, it’s just to easy!
“A good solid B plus,” Obama said during an hour-long, intimate soft-focus ABC network Christmas at the White House special, when Winfrey asked what grade he would give himself. (source AFP)
He has the lowest approval rating of any president in history at this time in his presidency, unemployment is above 10% (uncorrected its above 17%), the democrats have raised the national dept limit $1.9 trillion to nearly $14 trillion!!, he has escalated the war in Afghanistan, he illegally fired an inspector general for doing his job (finding fraud with our money), the list keeps going on and on. And he gives himself a B+!!!
I know this is the most self centered, egotistically president we have ever seen, and the hardest part of his day is turning away from the mirror to figure out which magazine he will read with his picture on the cover, but a B+!!!
Funny, Hutch, but it was, as history will correctly report, the Republicans that got us into this mess. I like Obama, a realist, who actually works for his pay. Unlike that other, illegally elected shrub who took more time off than any other bum in history, let alone president.
Something else I find really funny about Republicans and others who have their heads up their rears, is the fact that they take any chance to rip apart Obama in any forum, even if it has absolutely NOTHING to do with the topic at hand. Get with it and come up with solutions rather than sit around and b&%&h that you didn’t get your candidate in office.
Rome wasn’t built in a day but I’m sure could the Bush Republicans could have destroyed it in half the time.
Hutch,
I am surprised I don’t see your Obama bashing comments on the Bulldog’s article about the Mt. Blue Voice’s concert. I also see that you haven’t put any entries about how terrible Democrats are on the article about the Western Maine Youth Basketball League game. Better get on it, before they disappear off the front page.
-Nathaniel Burns
Somehow, this thread has wandered from Maine alcohol policy to Obama. Strange!
thanks guys just educating the weak minded kool-aid drinkers.
funny how dems can never defend thier messiah!! they can only revert back to blaming Bush! that includes Barry Santoro aka Mr. President.
Thanks guys just educating the weak minded kool-aid drinkers.
Funny how dems can never defend their messiah!! They can only revert back to blaming Bush! That includes Barry Santoro aka Mr. President.
And Mark if you really like history I ask you to go back to April 2001 and read the Bush administration 2002 budget request where it raises questions about Fannie and Freddy Mack, and says stuff like, if they are not more regulated it could “cause strong repercussions in the financial markets” and then go to the fall of 2003 and see what new federal agency the Bush administration was pushing to regulate these mortgage giants.
Read Mark, Read! Don’t let NBC, CBS, NPR, ABC, and MSNBC write History!
FYI, I am not a Bush republican, I prefer conservative, or right wing extremist, if you would!
i don’t now what happened there,
besides, someone has to comment on Al’s writings!
Nathaniel, that may be my favorite post of the year :-)
Now if only you could explain why gas prices are about the same in Maine and NH, when NH has NO sales tax and Maine has tax of 25.7 cents a gallon.
The facts are as Al has presented them. Does anyone wish to contest them?
Melanie, I think that NH does have a gas tax. A sales tax is not a gas tax. Here in Maine, I believe we pay a sales tax on the hidden tax inflated price of goods.
A little research shows that in October 0f 2009 the gasoline tax in New Hmpshire was 38 cents per gallon, in Maine, 49.4 cents per gallon, in Vermont 41.7 cents per gallon.
take a look at http://www.newhampshiregasprices.com/USA_Tax_Map.aspx. It is an interesting site.