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Fort Wayne liquor-license quotas: Government must break its own rules fairly

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The Fort Report

This week's show will feature Mark Myers, superintendent of schools for the Diocese of Fort Wayne-South Bend, and Fort Wayne Community Schools Board member Lisa Olinger, who will discuss the state's voucher program and other education issues. The episode will premiere at 5:30 p.m. Saturday on Comcast Channel 57 and FiOS Channel 27 and later at www.news-sentinel.com.

Proposal to evade limits invites cynicism and possible abuse

Saturday, April 20, 2013 - 10:23 am

According to the federal Department of Health and Human Services, at least 1,231 companies with 4 million employees have been granted some form of waiver from Obamacare. The Daily Caller, meanwhile, reports that the U.S. Senate's pending immigration bill contains “roughly 400 exemptions, exceptions, waivers and grants of discretion.”

Why would so many people be so eager to escape the benefits of something officially known as the “Affordable Care Act”? Why would a supposedly comprehensive attempt to deal with the affects of America's porous borders contain loopholes big enough to drive a truck full of illegal immigrants through?

Local officials should ponder the implications of such questions before embracing a proposal that offers qualifying bar and restaurant owners a way around the state's population-driven quotas on the issuance of liquor permits in exchange for what might be perceived by even the least cynical among us as a $2,500 annual kickback.

Even if the legislation creating “Downtown Dining District” that was endorsed by the Downtown Improvement District this week and is headed to City Council for approval makes sense – and there is much to like about it – the unavoidable truth is that it represents just the latest example of how government all too often creates rules from which it later exempts individuals and groups for reasons that can be perceived as base even if they are not.

Was it just a coincidence that so many Democrat-friendly unions received Obamacare waivers?

I know, like, respect and trust many of the people promoting the proposal in Fort Wayne, which would create a district similar to those in 25 other Hoosier cities that have provided the special three-way permits to 137 businesses that meet certain qualifications. But when I hear those same people talk about how the permit-approval process could be somewhat arbitrary, or could favor the “right” kind of businesses over the “wrong” ones, I cringe.

And you should, too – if you care about transparency, integrity, fairness and the quaint but still legitimate notion that where business is concerned it should be the free market – not government – that determines who prospers and who fails.

As I reported Wednesday, advocates of the proposal believe the addition of bars and restaurants would complement other efforts to develop the riverfronts and attract more investment and people downtown. But because of the state quotes, no three-way licenses are currently available in Fort Wayne. Because of those limits, such licenses have been worth well over $100,000, although the price has fallen recently because of the soft economy and other factors.

But why is there even a quota at all? All the practice does is drive up the cost of doing business and limit competition – competition local officials are now trying to foster through the use of what can only be called waivers.

And who will get those waivers? There's the rub.

Some of the guidelines for the non-transferable permits are objective enough: be located within 1,500 feet of a river (except for historic structures); be located within a designated redevelopment area funded in part with federal, state or local dollars; meet all local requirements, existing state permit laws; derive at least half your sales from non-alcoholic items; be open at least 300 days per year, at least five nights per week. The $2,500 annual payment would go into a fund used to promote downtown.

But applicants must also be approved by the mayor and recommended by a still-unformed review board, which according to the proposal would have the “flexibility to take into account other factors, including total investment, financial strength and previous experience of the owner.” Some have suggested locally owned businesses might be favored over chains.

Even if the process if totally impartial and above-board, its lack of consistent guidelines cannot help but encourage the perception of unfairness – especially since at least one member of the review committee must be a City Council member, whose campaign-finance reports will demand scrutiny to determine whether there is any connection between the approval of licenses and political contributions.

Ideally, all bars and restaurants would be on equal regulatory footing. It's more than a little unfair for one business to play by existing rules while new competitors get a potentially lucrative break. But if the city does go down this path – and I like a good drink as much as anyone – the process should at least be clear, consistent and predictable.

You meet the guidelines, you get your license and take your chances. No groveling, no guesswork.

And no funny business.


This column is the commentary of the writer and does not necessarily reflect the views or opinions of The News-Sentinel. Email Kevin Leininger at kleininger@news-sentinel.com, or call him at 461-8355.