Murphy Vows to Smash Prohibition-era Liquor License Laws in NJ
🍺 Gov. Murphy says he wants to overhaul liquor license rules
🍷 The move would allow more restaurants to serve beer, wine and liquor
🍸 The industry has always been hesitant because they could lose their investment in existing liquor licenses
TRENTON — For years there have been calls to update New Jersey’s antiquated and confusing liquor license laws for restaurants.
There are now new signs changes could finally be on the way.
During Gov. Phil Murphy’s State of the State address on Tuesday, he called for overhauling the current system and expanding the number of liquor licenses for restaurants statewide.
The liquor licensing system relies on old rules written right after Prohibition and those old rules, Murphy said, “purposely created market scarcity” and drove the cost of getting a license up so high, sometimes over $1 million, that most small and independent restaurateurs simply cannot get one.
🍺 More liquor licenses
“Expanding the number of available liquor licenses will not only help keep our favorite local restaurants healthy," Murphy said. "It will also help keep our economy healthy.”
He said under current law the number of liquor licenses allowed to be issued by any local government is one for every 3,000 residents. Some municipalities have more because their existing licenses were grandfathered in a century ago.
“I propose that over the next few years, we gradually relax this requirement and expand the number of available licenses until the restriction is eliminated in its entirety and the market can work freely,” said Murphy.
He stressed as this plan moves forward, restaurants that already have made significant up-front financial investments to get their current licenses must be compensated.
“I propose a targeted tax credit to support them as the supply of licenses grows," he said.
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🍸 Reaction from the industry
Dana Lancellotti, the president of the New Jersey Restaurant and Hospitality Association, said this is a complex issue.
Lancellotti said that while reform is needed, the key to making it work is not moving too quickly because current liquor license holders invested huge amounts of money to get them.
“We just want to make sure the value of their license is not devastated as it could be if this wasn’t done right.”
She also said the Association is heartened the governor recognizes and acknowledges the significant investment made by liquor license holders, but “adding more licenses to the marketplace will have a negative impact on these small businesses that have contributed so much to their communities over the years.
"Getting (back) the over 1,000 unused but existing licenses should be the first priority of any policy discussion.”
Murphy said plan would stimulate economy
The governor said overhauling the system won’t be easy but it will be worth it because it 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.”
Murphy also called on lawmakers to join him “in removing outdated licensing and operating restrictions on our craft breweries, distilleries, and wineries, which are seeing nothing short of a true renaissance.”