Wednesday, May 20, 2009

Budget Wining

Two issues may be coming together-as the Coke commercial used to say-"in perfect harmony." They are the revival of the wine in grocery stores-this time with an added incentive to the liquor stores-and the state's continued budget free fall. Crain's Insider reports on the wine/budget confluence (subscription): "Food retailers are making another attempt for the right to sell wine. They would let liquor stores sell food and open up to five stores, rather than one...Supermarkets’ cause got a boost yesterday when plunging tax revenues opened a $239 million hole in the state budget. Their plan could generate $100 million, supporters claim."

The liquor lobby, however, isn't buying: "Mike McKeon, calls it “the same phony compromise” that the Legislature rejected in March." Well, not quite; but since when does McKeon adhere to any standard of veracity? The measure rejected in March was simply a budget initiative, and didn't include any holistic approach to the liquor store problems. But to the dead enders, anything that gives wine to the markets-and tens of millions of dollars to the state-is "phony."

Reality in this case, is simply-and exclusively-the status quo that has seen liquor stores decline in recent years from a high of around 5,000 in New York, to around 2700 today. So McKeon is pitching for a dying group of entrepreneurs who would benefit greatly from change that would allow them to be, well, entrepreneurs, rather than simply nay saying protectionists.

And the budgetary mess is getting worse by the day: "Less than two months into the state’s fiscal year, revenue collections are about half of what they were last year, according to a report issued by the state comptroller on Tuesday. The findings reinforced what seemed to be a foregone conclusion almost as soon as Gov. David A. Paterson and legislative leaders agreed last month to the state’s $131 billion budget: Lawmakers will need to return to Albany at some point this year to make further cuts. The comptroller’s report said the state collected $4.8 billion in revenue in April, compared with $8.6 billion collected in April 2008, a 44 percent decline."

There's certainly nothing phony about the revenues the state would accrue from wine licensing fees; something that would make Robin Schimminger's comments on wine in grocery stores to Crain's appear short sighted in the extreme: "But a key lawmaker has no appetite for it. “The issue has been settled,” says Robin Schimminger, chairman of the Assembly committee with jurisdiction over the matter." However, the state's dire fiscal condition may well unsettle things pretty soon.