Wednesday, April 13, 2011

Drinks on the House

There has been a lot of buzz and misinformation recently regarding a proposal to get the Utah state government out of the alcohol distribution business. 

Rather than try to summarize the proposal myself, I will let its sponsor, Rep. Ryan Wilcox, do it for me.  Here is an excerpt from his post on Vox Populi:
I am proposing that we divest ourselves of our retail outlets; that we move toward truly limited government, and that we allow the market to determine the success or failure of retail stores, the fate of communities who depend on the services, tax revenue, and jobs they provide, and NOT politics and budget cuts at the state.

Currently, in smaller communities throughout Utah, the DABC already licenses what are called “package agencies” (similar to a franchisee) to essentially run privately held “State” liquor stores. In fact, this model is the norm, for the majority of “control” states. In Utah, this is primarily done in areas where there is less demand for the larger, more expensive stores we are familiar with along the Wasatch Front.

Under this bill, the DABC would be required to sell each of the state-owned liquor stores to private operators. Just as with any other business, these so-called “package agencies” would be allowed to succeed or fail, based not on whether or not the State of Utah was experiencing a downturn in the economy and was forced to cut their budget, but rather whether or not they offered excellent customer service, and on how they responded to market demands and customer needs.

As a control state, the state of Utah would remain as distributor, and as such, would also retain the 85% markup that currently provides the bulk of the profit margin. Both the state and the communities who depend on sales tax provided at the register would retain those revenues, just as they do now. Additionally, we anticipate a small windfall, as properties and stores are either leased or sold outright, and as the additional state employees are removed from the payroll.
It seems that the news media is so giddy with excitement about this story that even though they are supportive, they are still getting the facts wrong.  The history of alcohol control in the state hearkens back to the exaggerated acrimony of Mormon vs. Gentile coexistence.  It appears the media is rehearsing this tired historical narrative either a.) out of its own ignorance on the issue or b.) to sell more papers, ad space, ect. 

This legislative proposal is just a mild first step towards more liberated markets and warrants the support of the public. However the media and public must also recognize that it is not a complete dismantlement of the State's alcohol control system.  To believe otherwise is to set up oneself for disappointment. 

Saturday, April 2, 2011

Improving the Utah Legislative Process

The 2011 General Session of the Utah Legislature saw an unprecedented number of bills written and passed.  The legislative bodies managed to pass 504 bills in just 33 working days.  As you can see from this chart, we appear to be on a disquieting trend which started in 2005:

On average in 2011, we passed about 15 bills per working day.  The average bill size is about 10 pages.  Multiply that by the number of bills passed and it comes to 150 pages of reading per day that legislators needed to mull through.    

It would seem that this might be a manageable task.  Indeed, not all of the pages have new information on them, many of the pages are preexisting code and require little scrutiny.  Yet, unfortunately, the manageability of this workload is burdened by its uneven distribution through the legislative session.

At the beginning of the session, debate is long-winded and few bills are ready to be presented for a vote.  Many committee meetings are canceled due to the fact that bill language has not been properly prepared for pubic and committee scrutiny.  This leads to a crescendo in workload and bill flow as the session progresses.

To illustrate how this build-up affects the legislative process, I have put together a couple of graphics:

This above chart illustrates the traditions bill flow process.  A constituent or legislator has an idea and the legislator directs legislative research to draft a bill.  Once ready for review, the bill is numbered and released to the Rules Committee which determines whether the bill is worthy of review by a standing committee and public input.  If it does, a standing committee holds a hearing where public input is received and the merits of the bill are discussed.  A vote is taken in the committee to move the bill to the House Floor.  If the bill passes that vote, it goes to the House Floor where all the legislators are able to ask additional questions and debate the merits of the bill.  A vote is taken on the floor whether to pass the bill and send it to the Senate for consideration.  The same process then ensues in the Senate.

Now, toward the end of the session, the number of bills prepared and ready for review begins to backlog under this normal operation.  To mitigate this problem, it is typically proposed during the last few days of the session that the body operate under "Suspension of the Rules".  Here is what the flow looks like under "Suspension of the Rules":

 As you can see, the Standing Committee hearings are eliminated to expedite the bill being heard on the House Floor.  There are obvious disadvantages to this.  Public input is not able to be received and the bills are not scrutinized by committees which typically specialize in topics related to the bills they review.  It is my opinion that this practice may do more harm than good.  It seems to be the private sector equivalent of sending your quality control inspectors home so you can make a manufacturing deadline. 

My purpose here is not to point blame but to step back and take a look at our current process to see if there some things we can do to improve it.  Here are a couple suggestions that came to mind:

1.  Reduced Workload - It may seem like the legislature can pound it's chest in pride that is was so "productive" and passed so many bills.  I don't feel this is necessarily a bragging right. It seems to me that if we force nearly all bills to be heard in a standing committee, that the number of bills being passed will be reduced and thus gear legislators' talents toward quality rather than quantity.

2.  Balanced Workload - It also seems that many legislators' bills are not prepared at the beginning of the session.  It may be wise to create incentives through deadlines for legislators to have their bill's prepared in advance and also expand the Legislative staff's ability to prepare those bills before the session begins. Keeping a steady pace of hearing bills and limiting unnecessarily long-winded debate would allow legislators to do a better job of reading and vetting legislation while also conserving their personal energy for budget related issues.

I know that we will be looking at this process as a study topic during interim. It is my hope that we can come up with some good solutions that help make the process more manageable and equitable.