State lawmakers hear lots of ideas, some of them hugely costly, to invigorate moribund areas across the state. But one of the greatest obstacles to local economic development lies with legislators themselves — specifically, in their stranglehold, through state laws limiting the number of alcohol licenses, upon the number of economically viable restaurants in individual municipalities. By giving up that power, and letting cities and towns bring in new eateries, the Legislature can revive neighborhoods across the state without a dime of public expenditure.
The Legislature long ago adopted a population-based formula that specifies how many liquor licenses most municipalities can offer; in Boston’s case, lawmakers wrote specific numerical caps, which eventually proved inadequate, into state statute. Adopted in the spirit of temperance, these restrictions now serve to enrich anyone lucky enough to have received a license in the distant past — and they drive up the cost of getting into the restaurant business now.
There are two major reform efforts afoot. One, a Boston home-rule petition originally proposed by City Councilor Ayanna Pressley, would lift the statutory cap for the state’s largest city and give municipal authorities control over the licensing process. The measure, which envisions issuing new, non-transferable licenses, addresses two pressing problems: the escalation of liquor license costs beyond the reach of independent restaurateurs, and the migration of licenses to rich downtown areas from outlying neighborhoods that desperately need economic activity.
Governor Patrick recently took up the cause as well, proposing legislation that would give local governments the choice of taking back control over licenses. In truth, it’s hard to imagine an area more appropriate for regulation exclusively at the local level. Besides, as a state economic development official noted at a State House hearing last week, a smoother licensing process with more predictable results is all but crucial to large-scale mixed-use development projects that many communities are now pursuing. Dining options are what make the residential spaces in such projects desirable, but developers need tenants, and restaurants can’t easily get financing if they can’t get liquor licenses.
As matters stand, communities that run out of liquor licenses need to go to the Legislature hat in hand. For lawmakers, it’s a tangible form of power, and potentially a rich source of campaign cash. But no public good can come of such micromanagement from Beacon Hill; former state Senator Dianne Wilkerson went to jail for her role in a liquor-licensing shakedown.
Unfortunately, the cap on licenses has burrowed its way so far into the framework of Boston’s restaurant business that reforming the licensing system won’t be simple. Restaurateurs who have invested six figures in a liquor license are bound to cry foul if the state suddenly changes the rules and starts handing out licenses to competitors for less.
One way to surmount that problem is to issue new licenses, but with geographic or transfer restrictions that would make them less valuable than the traditional licenses. That’s the idea behind an alternate plan, from Boston City Councilor Tito Jackson, to create 12 new licenses just for Dudley Square. It wouldn’t allow license-holders to use them outside a relatively small area, and wouldn’t permit transfers. Pressley’s measure, while more permissive, would still prioritize new licenses in currently underserved areas. That should help ensure that restaurants in other parts of the city won’t feel robbed.
Ultimately, though, legislators should recognize that forever propping up the current price of a liquor license should not be an excuse for punting on reform. A dysfunctional system, especially in Boston, is limiting opportunities for restaurant owners and inhibiting a wider revitalization that benefits entire communities. Lawmakers should adopt Pressley’s plan for Boston, Patrick’s statewide legislation, or both.