Political Notes – Kemp hears about issues he has no control over

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Secretary of State Brian Kemp got a sudsy reception when he dropped by the Macon Beer Co. microbrewery in Macon on Monday.

The brewery owners took Kemp on a guided tour of the converted warehouse and used the opportunity to complain about the state laws that regulate the sale and distribution of alcoholic beverages:

Beer has to go from the brewer to a wholesaler, who then sells it to a retailer. That creates an extra set of logistical problems for both his own company and the wholesaler, [Jeremy] Knowles said.

He said that for the Rookery on Cherry Street to buy beer from Macon Beer, the beer has to be shipped to Atlanta and then delivered back to Macon, even though the restaurant and brewer are just a few blocks apart.

[Cory] Smith said the business has grown to the point that it’s nearly breaking even, but he and Knowles still don’t take salaries. Taxes, however, have gone up 138 percent for the business since it opened nearly a year ago.

“In our industry, there’s a lot of regulation stuff to go through at this point,” Smith said. “It’d be nice if it was streamlined. Some (government) entities don’t understand what the others are doing, so there’s a lot of duplication of work.”

Smith and Knowles were referring to Georgia’s three-tier system of alcohol regulation, a legal framework that has been in place for about 80 years and requires that separate business entities handle the production, distribution, and retailing of alcoholic beverages.

While small tweaks are made to the three-tier system from time to time, the overall regulatory structure has withstood all attempts to make major changes to it.

The strongest complaints in recent years have come from microbrewers like Macon Beer Co. that want the flexibility to sell beer directly to customers who visit their brewing facilities. No legislation has passed that would allow that, however.

“I think it’s more important to keep the three-tier system in place,” said Sen. Jack Murphy (R-Cumming), chairman of the Senate’s Public Utilities and Regulated Industries Committee, when questioned last session about that proposed change in the system.

Monday’s conversation between Kemp and the owners of Macon Beer Co. illustrates one of the major obstacles that microbrewers face – they seem to have no idea how the regulatory and political system works in Georgia.

As Kemp pointed out to Smith and Knowles, the Secretary of State’s office has nothing to do with the regulation of alcohol sales in Georgia.

That responsibility falls to the state revenue commissioner (currently Doug MacGinnitie), who’s appointed by the governor. The state’s beverage laws are determined by the members of the General Assembly.

Texas struggles with private tollway

When trying to figure out how to pay for new highways in Georgia, one of the solutions that is most often touted is to have a “public-private partnership” take control of the project.

These public-private projects typically involve the floating of bonds that are paid back over a long period of time with revenues generated by operating the new highway as a toll road.

Gov. Nathan Deal and the state Department of Transportation are pushing ahead with a version of this public-private arrangement to build the Northwest Corridor toll lanes in Cobb and Cherokee counties, a project that is estimated to cost just under $1 billion.

Sometimes these projects don’t work as planned, however.

The latest cautionary note comes out of Texas, where private partners Cintra (a Spanish transportation company) and Zachry Construction Co. of San Antonio built a toll road with an 85 mph speed limit.

As reported by the Associated Press:

A Central Texas toll road world famous for its 85-mph speed limit continues to struggle financially, with revenue of only 30 percent of original projections.

Moody’s Investor Service reported Thursday that the company that built the privately managed leg of Texas 130 southeast of Austin lacks the money to meet a payment due June 30 on the $1.18 billion loan that financed the construction.

Moody’s says, however, that SH 130 Concession Co. is negotiating refinancing with 10 banks that financed the original loan, so default is unlikely.

In May 2013, Moody’s downgraded SH 130’s credit rating by four grades to junk status because the road was carrying only half the traffic projected when it opened October 2012.

Legal notes

The governor’s Judicial Nominating Commission has recommended two lawyers for a newly created State Court judgeship in Lowndes County.

The names forwarded to Gov. Nathan Deal are Ellen S. Golden, a partner in Valdosta’s Ryan & Golden law firm, and Senior State Court Judge Kelly D. Turner of Lowndes County.

One of Georgia’s most prominent litigation firms, Columbus-based Butler, Wooten & Fryhofer, has announced a name change.

The firm will now be known as Butler Wooten Cheeley & Peak LLP, reflecting in part the decision by longtime partner George W. Fryhofer III to retire after a legal career spanning 30 years.

Robert D. “Bob” Cheeley is rejoining the law firm, which he helped start in 1988. Brandon L. Peak, who joined the firm in 2006, is now a name partner. John Coleman “Buddy” Morrison has also become a partner.

The familiar names that remain on the masthead are attorneys Jim Butler (a former member of the state Board of Natural Resources) and Joel Wooten (former member of the Board of Regents and current member of the Georgia Ports Authority board).

Personnel notes

Chandler Massey, the son and grandson of two of the capitol’s best-known lobbyists, has won his third consecutive Daytime Emmy for his work on the program “Days of Our Lives.”

Massey won his latest award Sunday evening for his portrayal of the character “Will Horton” on the long-running soap opera, even though he stepped down from the role last August. He plans to return to UCLA and continue working on an undergraduate degree.

He’s the son of former secretary of state Lewis Massey and the grandson of Abit Massey, the longtime capitol representative of the Georgia Poultry Federation.

© 2014 by The Georgia Report

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Tags: Brian Kemp , Chandler Massey , Jim Butler , Joel Wooten , Macon Beer Co. , public-private projects , three-tier system alcohol regulation , toll roads