1/11/23

“Antiquated and confusing”.

That is how Governor Phil Murphy described New Jersey’s liquor laws yesterday in his State of the State address. “We rely on a foundation of rules written in the days immediately after Prohibition to govern a 21st century economy.”, he said as he lobbied present lawmakers to ease the cost imposed on businesses as they pertain to liquor licenses.

“And so, I ask for your partnership in rewriting our liquor license laws to make them not just modern, but fair. The old rules have purposely created market scarcity and driven up costs to the point where a liquor license can draw seven figures.”

The exorbitant cost of a liquor license, Murphy says, acts as too big a barrier to small restaurants that are often so vital to downtowns around the state. They simply cannot afford to pay $500,000+ for the right to serve a beverage that, in many cases, is vital to the dining experience.

“This won’t be easy, but it will be worth it.”, said Murphy. “We project that overhauling our liquor license regime will create upwards of 10,000 jobs annually and, over the next 10 years, generate up to $10 billion in new economic activity and $1 billion in new state and local revenues.”

His proposal is this:

  • Gradually relax law stating that one license is given out for every 3000 people in a town, which would lead to,
  • More licenses being made available as the regulation is slowly eliminated, so that,
  • The market can take over and it will self-regulate

This proposal would, in other words, flood the market with more licenses, thus driving the cost down. And so, for those that have already incurred the high cost of a liquor license, Murphy proposes a targeted tax credit that will prop them up as the supply of licenses go up and the value of their licenses go down.

The governor then went on to ask lawmakers to change the laws surrounding craft breweries, vintners, and distillers around the state, stating the industry is seeing, “nothing short of a true renaissance.” He did not, however, expand upon what he thinks needs to be changed within those regulations. One can only hope that it was in reference to recent laws that have hamstrung breweries around the state, such as the strange regulation that prohibits craft breweries from serving coffee. Bizarre.

What’s funny, is that those strange regulations were imposed just this past July, within Murphy’s administration.