Somerville: End the liquor license cap

Thanks to the recently-passed casino gambling bill, the Alcoholic Beverages Control Commission will soon be launching a two-year comprehensive review of Massachusetts’s liquor laws. Somerville officials have one suggestion for where that review should start: the Prohibition-era law capping the number of liquor licenses cities and towns can legally issue.

Somerville’s Board of Aldermen recently sent a home rule petition to Beacon Hill that would grant the city the right to issue an unlimited number of liquor licenses. The home rule petition isn’t directly related to the ABCC’s pending review, which was the result of the Senate’s briefly-lived attempt to roll back happy hour regulations. But the city’s highly unusual request does put liquor license reform on the table at a time when the Legislature’s attention is trained on liquor laws.

State law caps the number of liquor licenses cities and towns can issue. This cap, which is scaled to each municipality’s population, has been in place since the end of Prohibition. A limited supply of licenses means that would-be restaurant or bar operators often have to buy licenses at premium prices on the secondary market. In Somerville, full-liquor licenses are currently trading around $100,000; in Boston, the price is closer to $250,000.

There are two exceptions to the cap. Boston’s supply of licenses isn’t tied to population. Instead, the city operates under a hard cap that dates back more than a century, to the political battles between Boston’s Irish politicians and the Yankees on Beacon Hill.

The other exception is Cambridge. Officially, the city operates under a liquor license cap. But that cap is set by Cambridge’s License Commission, not state law. Beacon Hill gave Cambridge the authority to issue its own licenses in 1922 – a time when the sale of alcohol was illegal, and the License Commission dealt mostly with regulating billboards, pool halls, bowling alleys, pawn shops, and the sale of soda and ice cream on Sundays. The License Commission took over alcohol regulation when Prohibition ended. The city has capped the number of liquor licenses it will allow in various neighborhoods since the mid 1980’s, but the discretion to raise those neighborhood caps rests solely with the city.

Normally, when cities and towns run up against their statutory license cap, they pass home rule petitions asking the Legislature to grant them new ones. The Legislature frequently ties these new licenses to specific locations.

At best, the process of pushing these home rule petitions through the Legislature can be inefficient and time-consuming. And at worst, the very fact that the licenses have to move through the State House leaves them open to leverage games. For example, a bill the town of Westwood filed on behalf of a proposed Wegmans store famously ran into separate political obstacles in the House and the Senate. Ex-Sen. Dianne Wilkerson sold her piece of the license action.

Somerville’s licensing board has had to turn away a number of applicants recently, because there aren’t enough licenses in the city to meet a booming demand. Instead of just asking to raise the city’s cap, though, the city looked at neighboring Cambridge, and began asking why the state cap still exists.

“An overall cap seems to take the view that communities aren’t responsible enough to regulate licenses,” says Somerville alderman Bill White. “We have a licensing commission of our own. They should be able to exercise their discretion.”

Somerville’s request for an unlimited number of liquor licenses would upend the way home rule has functioned in Massachusetts for the past 80 years. It also asks the Legislature to relinquish some of its power – something the body doesn’t usually rush to do.

“Maybe, 40 years ago, there were concerns about not wanting to have a gin mill on every corner,” White says. But now restaurants help drive the revitalization of neighborhoods. And restaurants often need to sell beer and wine to compete. “The licensing commission doesn’t have to grant a license to everybody who asks for one. It should be up to them to decide, is it in the public interest?”