Former state senator who sponsored bill to create alcohol fund defends it 20 years later

CONCORD — As a state senator in 2000, Edward “Ned” Gordon of Bristol sponsored legislation requiring that 5% of the New Hampshire Liquor Commission’s gross profits be set aside in an alcohol abuse prevention and treatment fund. More than two decades later, Gordon was back in Concord to preserve that fund.

House Bill 1702, sponsored by Rep. Paul Leishman (D-Peterborough), who serves on the House Finance Committee, would repeal the 5% requirement and substitute a requirement that “a portion of the gross profits ... shall be deposited into the alcohol abuse prevention and treatment fund” and that “The amount of such deposit shall be based on an appropriation included in the state operating budget.”

Testifying before the House Commerce & Consumer Affairs Committee on Jan. 31, Leishman said he was not seeking to abolish the fund but to preserve it in the face of declining liquor sales.

“During my time on the Finance Committee, I have become increasingly concerned over the operation of the Liquor Commission,” Leishman said, noting that revenue growth has been relatively flat since 2009 and that last year, net profits before transfers decreased by 6.4%, while debt service has been increasing.

“This year alone, that commission shows a 15.6% increase in debt service,” he said.

Liquor Commission audits “differ dramatically” from other agencies, he said, and two years after initiating the creation of an internal audit procedure, the department still did not have one in place.

A report from the legislative budget assistant noted the commission did not compute its 2022 transfers to the alcohol fund as required by law, and the state treasurer reported that, by law, the commission is required to transfer excess funds to the general fund daily but it has been making the transfers only on a monthly basis.

Rep. Dan McGuire (R-Epsom), vice chair of the Finance Committee and a co-sponsor of the bill, argued for the change because “automatic” transfers act as “out-of-sight, out-of-mind” spending. “That’s why this is done,” he said, “because people who want this don’t want close scrutiny.”

Rep. Merryl Gibbs (D-Concord) asked, “Isn’t it possible that there are some programs, perhaps important programs, that need consistency of funding in order to be able to plan and operate in a consistent manner, and that is the reason why there are specific allocations of percentages or dollar amounts, so that those programs are not subject to biannual uncertainty?”

McGuire responded, “[T]hey get certainty every two years.”

Gordon’s original legislation arose after Brad Wolff, a middle school teacher in the Newfound Area School District, gave students an assignment to write to an official about a problem. One student, David Bleiler, wrote to Gordon, expressing his concerns about alcohol consumption at the middle school.

Believing that a state promoting alcohol sales should set aside money to mitigate the problems those sales create, Gordon sponsored Senate Bill 153 to use a portion of the growth in alcohol profits for prevention and the treatment of addiction. After it initially passed, the House and Senate had to override a veto from former Gov. Jeanne Shaheen for it to become law.

Testifying on jan. 31, Gordon said he read HB 1702 as a repeal of the alcohol fund, “and I certainly would be opposed to doing that,” but having the money come from the general fund is a different matter.

“I think that there should be a tie between the Alcohol Commission and the funding,” he said, “and I think it says a lot about the state in terms of who we are and what we value.”

The Liquor Commission, Gordon said, was established as a control agency “and has evolved over time into a marketing agency, and because it is, there are consequences for marketing alcohol. ... The fact is that alcohol kills a greater number over time than other types of drugs do; it’s a potent killer. That doesn’t mean we should ban it, but I think that we should do our very best job to control it. ... You can’t treat your way out of that problem; prevention and education is the most beneficial way of approaching it ...

“I would be opposed to certainly doing away with the alcohol fund altogether, but I would also be opposed to doing the funding mechanisms through the general fund,” he said.

Rob Barry, general counsel for the Division of Medicaid for New Hampshire, and Jennifer O’Higgins, legislative liaison for behavioral health with the Department of Health and Human Services, spoke of the restrictions on the use of federal funding, and they noted that the Granite Advantage Health Care Program is prohibited by statute from using general funds.

Granite Advantage offers medical assistance to low-income residents in the state, and currently is supported by the alcohol fund.

“In New Hampshire, where our funding sources for the substance use continuum of care often rely on federal grants with two-year cycles, the stability and predictability of this revenue allows us to do more long-term planning and consistency in that service delivery,” O’Higgins said.

Gov. Chris Sununu notified the committee of his opposition to the bill, and Patrick Tufts of the the Governor’s Commission on Alcohol and Drug Abuse Prevention, Intervention, and Treatment also spoke against it.

“I did have a conversation with Rep. Leishman and I really respect the intent of what he’s trying to do, which is to guarantee more funds to help people dealing with substance use disorder in the state of New Hampshire,” Tufts said. “We share that concern. I am opposed, as the Governor’s Commission is opposed, to the bill as written because of the lack of guarantees as to how we would fund the tremendous work that the Governor’s Commission is doing.”

He continued, “I’ve heard ‘automated’ brought up. We need predictability in order to do the work that we’re doing.”

Tufts noted this biennium is the first time the Governor’s Commission has been fully funded by the legislature.

Several speakers noted the alcohol fund itself has not been fully funded until this year.

“Since its inception, the fund has been historically underfunded and diverted elsewhere,” said Kate Frey, vice president of advocacy for New Futures, Inc., of Concord. “It was not until last year, 20 years later, that the fund was actually funded at the proper amount of 5% in the state’s operating budget for ’24 and ’25. So this bill reverses that historical action by removing that requirement of 5% of gross profits, and just leaves it up to the legislature ... ”

John Burns, executive director of SOS Recovery Community Organization, echoed her comments.

“I’ve been in this work since 2013, and I can’t think of a biennium that I didn’t have to come in front of the Finance Committee and beg them not to pull money and divert money out of the alcohol fund as it is, so when I hear that the intent is to provide more funding and put it on a general ledger line item, I have concerns about that, because we’ve only been fully funded last year,” he said.

Holly Stevens, director of the National Alliance on Mental Illness-New Hampshire, said inadequate funding of the alcohol fund would jeopardize the Medicaid Expansion program because that program for low-income residents relies on the liquor money to cover under-funding in other areas.

“Of all the challenges facing Granite Staters, the mental health crisis is paramount,” Stevens said.

Many people are covered by commercial insurance, but, she said, “At any point in time, somebody can lose their job, and if that happens, and Granite Advantage wasn’t there as a safety net, they will be unable to continue the services that they have in place. Like other medical illnesses, delays in treatment mean progression of the seriousness of the illness and more difficulty and cost when the person eventually does receive treatment.”

Prevention counselor Kimberly Haley gave an impassioned plea to preserve the alcohol fund as it is, calling HB 1702 a “bait-and-switch”.

“‘Just give us your budget and we’ll take care of you.’ You know, that’s what they’re making it sound like. That’s not the way it’s gonna go, because they’ve barely ever funded the alcohol fund in full. Who’s to say they put a dime in for prevention, treatment, and recovery? You know, ‘Oh, sorry. We have these other expenditures, you know. We can’t help you.’”

She continued, “The people making these decisions, I doubt you’ve ever sat in the room with a 13-year-old who lives with family substance use who wants to die, who’s talking about dying, because they have no hope for their future.”

Leishman took an opportunity to respond to the comment, saying, “I have lost my son to a fentanyl overdose, so that testimony, and attacking the sponsors or me personally, when I know what it’s like, that’s wrong. And I know that the sponsors want to see more funding, and restricting it to 5%, it’s not appropriate.”