Liquor license bill to get revamp after chilly reception from legislators

A sponsor of a liquor license overhaul bill championed by Gov. Phil Murphy said he will split the proposal into at least three different measures after the initial bill was met with resistance in the Legislature.

Sen. Gordon Johnson (D-Bergen) told the New Jersey Monitor he is drafting legislation that would loosen restrictions imposed on breweries and wineries, allow small towns to obtain more retail consumption licenses, and allow the sale of certain inactive licenses within a given municipality’s county. 

“This is a matter of equality,” Johnson said. “We’re working on allowing small businesses and those who don’t have deep pockets the opportunity to obtain a license to serve alcohol in this state.”

Murphy has sought to rewrite New Jersey’s Prohibition-era liquor laws to increase the number of liquor licenses used by bars and restaurants. Currently, those licenses are limited to one for every 3,000 residents in a municipality.

A measure Johnson introduced in February would have phased those limits out over six years while also lifting brewery restrictions, among some other changes, but the legislation got a frosty reception from legislators and existing license holders who say they fear it would shave hundreds of thousands of dollars off the value of their licenses.

Johnson’s pledge to split up his bill into smaller pieces came after Sen. Paul Sarlo (D-Bergen), chair of the chamber’s budget committee, said Tuesday that the initial proposal has little support in the Legislature.

A spokesperson for the governor said a comprehensive overhaul of the state’s liquor license laws — including brewery rules, license limits, and license affordability — would spur economic growth in the state.

“Sen. Johnson understands this, and we look forward to continuing to work with him to create a more equitable path for the countless small business owners who have been shut out of the present system,” said Bailey Lawrence, the spokesperson.

Johnson said he hopes to pass a bill before the end of June that would lift restrictions limiting the number of events breweries can hold each year and barring them from serving food. The Division of Alcoholic Beverage Control annually renews those licenses in June.

“I want to try to get that piece done as soon as possible, and that’s probably the easier lift, the brewery piece,” he said.

A second, yet-to-be-introduced bill would grant towns with small populations — around 3,000 or 4,000 — additional retail consumption licenses within 12 months, Johnson said. Under the initial proposal, some towns may not have seen their number of licenses increase until the limits were phased out altogether in 2029.

A third bill would allow towns to transfer pocket licenses — licenses that are active but not tied to any establishment — to other municipalities within their county. Sarlo and others have sponsored similar legislation.

Johnson said he hopes the bills would reach the governor’s desk before the end of 2023. 

Parts of the new proposal are still in development, including provisions that would award tax credits to existing license holders.

Because the number of liquor licenses is capped, they are typically worth hundreds of thousands of dollars and sometimes more than $1 million. Increasing the supply of licenses is expected to drop the value of already issued licenses.

Murphy has proposed a one-time credit worth between $30,000 and $50,000, depending on sales, to defray the impact on existing license holders, but Johnson said that number and framework are not final.

“We’re not going to pay the whole thing off, but what should that number be? Should it be different in each county? Should it be a sliding scale?” he said. “That piece I’ve not really worked out yet.”