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June 19, 2009     Cape Gazette
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June 19, 2009

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+ 18 FRIDAY, JuNE 19 - MONDAY, JUNE 22, 2009 NEWS Cape Gazette Supermarkets strive to sell beer, wine Businesses, association fight proposal By Kevin Spence Delaware residents would be able to buy Budweiser and pinot grigio along with their eggs and bread, if controversial House Bill 193 is passed. The bill legalizes the sale of beer and wine at gro- cery stores in a state that forbids it, one of only five states nation- wide. But faced with stiff opposition from liquor-store owners, the bill was tabled at a Wednesday, June 17 House Finance and Revenue Committee hearing. Lawmakers see HB 193 as a money maker, one they say could draw $10 million to the state. In the past, similar measures have been introduced and failed. But this year, as the state faces an $800 million shortfall, HB 193 includes a steep application fee - a provision that might make the measure more palatable and passable. HB 193 calls for a one- time only $100,000 application fee and a $5,000 registration fee every other year. Some Sussex County businesses, however, have joined forces with the Delaware Asian-American Small Business Association to oppose the measure. Some of the associations' 125 members have been pacing through Legislative Hall inan at- tempt to squash the bill, spon- sored by Rep. John Viola, D- Newark. Pravin Patel, association chair- man, said there are about 320 package, or liquor-only, stores in the state. About half of them are owned by Southeast-Asian Americans, he said. Patel is dead set against the measure. He also said lawmakers are overestimat- ing how much money would be brought in. "It would take all the livelihood out for the liquor- store owners. More than 50 per- cent of sales are beer and 20 per- cent are wine. That would take away 70 percent of our sales. We would have to close our doors," said Patel. He said each store em- ploys about three to four em- ployees and, if the measure pass- es, unemployment in Delaware would increase. Dale Lornas, who co-owns At- lantic Liquors on Route 1, said the bill leaves out many details and considerations. Lomas said the Alcoholi c Beverage Control Commission would be over- whelmed and would suddenly need more agents - a considera- tion committee members said contributed to tabling the meas- ure. "It's a short-sighted effort to generate income," he said. "I'm really disappointed that they would actually try something like this. Small businesses in any state and at any time - recession or booming economy - are of- ten the backbone of the econo- my," he said. "I'm just aggravated they would cut us off when they probably need us most and we need their protection most," said Lomas. Palash Gupta, association treasurer, said the bill might have unintended consequences. He said banks, insurance companies and other businesses working with package stores might soon find themselves out of business. "The small business industry will be in turmoil because banks and insurance companies are in- volved. A lot of people borrowed from these banks. There will be a big rippling effect," said Gupta. Gupta also said the bill would not spur more revenue or drinkers in Delaware. "On the Contrary, we will be shutting down quite a few busi- nesses. Our governor, when he was running for election, said he would protect locally owned, small businesses," said Gupta. Food Lion spokeswoman Christy Phillips-Brown said tile grocery store sells beer and wine in other states. "Food Lion is sup- portive of efforts to provide cus- tomers an option to ptgchase al- coholic beverages in our stores. Food Lion has detailed policies and procedures related to alco- holic beverages and selling in stores. "We will provide extensive training, and we have procedures already in place," said Phillips- Brown. Barry Scher, a spokesperson for Giant Food LLC based in Lan- dover, Md., said the grocery stores in Delaware would like the right to sell beer and wine as in other states. "We have an out- standing record of complying with laws," said Scher. He also said bakeries, floral shops and other businesses are already lo- cated in grocery stores too, but that doesn't hinder independent stores to also Operate outside large, grocery store chains. "The consumer is the one who benefits" said Scher. Lomas says the state should support local businesses. "I was born and raised here in Delaware. Where was the owner of Superfresh born?" he said. Layoffs Continued from page 1 called sin taxes, are also making their way to the House floor, where 25 votes are needed to pass any tax increases. To ap- prove the budget, 21 votes are re- quired in the House, which cur- rently has 25 Democrats among 41 representatives. "Next week, we're moving for- ward with a revenue-enhance- ment package," said Schwartzkopf. Lawmakers are also proposing to increase fees, including frees for DUI convictions and higher registration payments for sex-of- fender registration. But little consensus seems to be evident yet. Rep. Joe Booth, R- Georgetown, who sits on the Joint Finance Committee, oppos- es pay cuts for state workers. "There was some definite arm- twisting on that issue," said Booth. At rn-st, lawmakers were look- ing at cutting pay for state work- ers by 8 percent. Then a 4 per- cent proposal arose. Finally, the Joint Finance Committee agreed upon the lower 2.5 percentage. Booth said the seven votes it took to pass the cuts the 12-mem- ber Joint Finance Committee were tentative. He also said Gov. Jack Markell's administration can avoid the cuts and tax increases by cutting some state programs. "My complaint is the $30 mil- lion being taken from hard-work- ing people, Delaware people. We're only taking I percent of the state budget. You're telling me we can't fred I percent of fat in the state budget?" said Booth. Further, he said the state will have to come up with the $32 million next year - if Markell plans to reinstate state worker pay. Booth said lawmakers face an uphill battle in passing alcohol and cigarette tax increases. "It's not that people are in favor of smoking and drinking. It's be- cause there's a Delaware face be- hind those taxes," he said. He said corporate, bank franchise and gross receipt tax increases - largely paid for by out-of-state residents - are easier pills to swallow. Lawmakers need to cut government more, he said. "I don't think we've been doing our job, doing things that we can to cut the budget. Let's take a look at more cuts. I thinkthe problem has been more of a spending problem," he said. Booth said the state should look at some state-funded educa- tion programs. "Full-day kinder- garten is expensive - it's a huge expense. I think it's something that should be taken a look at. We already offer half-day kinder- garten," h e said. He also suggest- ed cutting the SEED program, free tuition for students. The reading resource teacher pro- gram, which he said is largely in- efficient, would save the state $8.4 million by doing away with that program, he said. 'According to the secretary of education, test results remain flat," said Booth. By abiding by prevailing wage laws, the state pays $25 million more for pay than it should, he said. "Collective bargaining? We're spending millions to nego- tiate with our own state work- ers," he said. Revenue predictions show uptick By Kevin Spence kspence@ca The Delaware Financial and Economic Council - the state's fi- nancial advisory board, which met for the last time Monday, June 15, says state revenue in- creased by nearly $9 million this fiscal year. The revenue uptick was a stark contrast to dismal predictions made by lawmakers in early June, when some said the deficit might grow by as much as $100 million. The better-than-ex- mer that the economic turmoil is easing, as legislators grapple with balancing a record $800 million deficit. Gov. lack Markell said no llth-hour changes would allow lawmakers to avoid mak- ing difficult decisions. "In fact, without an unexpected one-time infusion, the $800 million short- fall for fiscal 2010 would have been greater. Dozens of tough decisions remain, and we need a bipartisan consensus to produce a balanced budget. I look forward to working with legislators from cal house in order" Markell said. Catherine Bakerian, manager of media relations at the Office of Management and Budget, said June revenue is the first time rev- enue has increased since the council began meeting last year. She said the most significant increases came from abandoned property - $20 million. Lottery income also spiked, she said. But decreases in other taxes offset initial gains. Public utility, gross receipt, personal income, ciga- rette and bank franchise taxes all decrease.d, she said. "When you take all the negative and positive, we ended up coming up $8.5 mil- The Delaware Department of Transportation pays more than $1 million a week for outside consultants - an outrage, said Booth. Sen. Gary Simpson, R-Milford, said he thinks the sin taxes will pass, but not easily. "I think all tax bills will have a tough time passing  year. No one wants to increase taxes, but I don't know how you'll close the gap" said Simpson. Nearly $155 million in federal stimulus funds will scrape down the shortfall too, but these are one-time only funds - an unend- ing cycle legislators will have to address nextyear, he said. "To be realistic, we know we're going to have some tax increases. For a Republican, that comes aw- ful hard," he said. Simpson also remains unsure about passing worker pay cuts. 'qhere's still a lot of controversy over the 2.5 percent. A lot of leg- islators are not ready to make any cuts yet. I'm not convinced the state budget has been cut se- verely enough. That's not a done deaL" said Simpson. Booth said part of the problem is the governor and his team are new. "Somebody floated the state pay cuts five months ago. I ques- tion whether they have the votes upstairs, if people hold to what they're saying about passing a budget that includes cuts for state workers;' said Booth. Said Schwartzkopf, "When you raise taxes or make cuts, the hardest thing to do is get a con- sensns" For Simpson, the threat of a frozen government is imminent. "We've got to find a way out, or our govermnent will shut down in July" he said.