Substantive liquor law reform, rather than the occasional piecemeal gesture the state legislature throws to Utah’s hospitality and tourism industries, will likely dominate the 2009 session when lawmakers convene in mid-January. And, there’s good reason to be cautiously optimistic given recent signals by Governor Jon Huntsman, Jr., and the state’s liquor commissioners, who surprised virtually everybody last week when they voted 3-1 to start the process of drafting proposals that could ultimately remake the face of the wine, beer and spirits industry in Utah.

The impetus for this renewed discussion stems from the Utah Hospitality Association’s recent announcement of a petition drive to push for a 2010 statewide referendum on abolishing private club memberships, one of the thorniest quirks to bedevil the state’s hospitality interests. In effect, the UHA is asking to remove the distinction between private and public liquor licenses. In other words, the state’s 77 taverns, which now can only offer beer up to four percent alcohol, would be permitted to stock heftier beers and serve wines and distilled spirits. Therefore, every location would operate much like the airport lounges, where alcoholic beverages are sold with or without food at the bar or at a table.

While the UHA welcomes the signals, the group also sees the petition drive as a vital part of a strategy to generate an unprecedented dialogue where state officials, representatives of the hospitality and tourism industries, and legislators can begin to cultivate a consensus that satisfies not only economic interests affected increasingly by regional competition but also the need to sustain enforcement for the public’s larger welfare and safety, according to Lisa McGarry of the UHA. “It’s definitely headed this way in starting the conversation,” she says. “However, the petition drive will remain a viable option. We have concerns that proposed reforms could be tweaked by legislators. We’ve seen before where they give on one point but then take away on another.”

Reform is far from certainty. Legislators, many of whom are members of the state’s predominant church, will look to LDS officials for cues when the time comes to contemplate reform proposals. At best, the church’s public silence on the issue hopefully would not taint the sort of meaningful dialogue that McGarry and her colleagues believe will lead to transformative proposals. And, McGarry admits the petition drive does not guarantee a successful ballot placement either.

Utah’s initiative process is complicated and intentionally difficult, designed to limit initiatives that appear frivolous or have little public support. It now takes ten percent of the voting population in at least 26 of the 29 state senate districts and ten percent statewide to validate a proposed initiative. McGarry says that meeting the requirement in Salt Lake, Summit, and Carbon counties will be easy but others are far from certain. “A lot of people are beginning to recognize the consequences of the current laws on the state’s consumers and businesses,” she explains. “Any change can be scary. However, once any proposed reforms are explained, people will see that the state will not be any less vigilant in fighting underage drinking, alcohol abuse, or DUI enforcement.”

The UHA’s petition announcement likely was the tipping point needed to enlarge the statewide discussion on liquor reform. Utah’s economy is remarkably resilient, still showing steady growth in new jobs and industry. Salt Lake City was named one of the top 10 recession-proof cities last month by Forbes.com. And, the state’s population, one of the fastest growing in the country, is attracting a diversified base of entrepreneurs and professionals who see responsible, well-managed, economic interests being supported by state laws that acknowledge modern consumer demand. McGarry also notes that the conservative, Republican political dynamics of the state fit well with the concerns of responsible small business owners who ask for a modicum of a level playing field where business decisions are dictated by consumer demand and marketplace forces.

One only needs to look eastward at Colorado, which actively competes with Utah for shares of skiing, recreational tourism, and convention traffic. Earlier this spring, Colorado Governor Bill Ritter signed a law repealing the state’s 75-year-old ban on Sunday retail sales of wine, beer, and liquor. As of July 1, Colorado becomes the 35th state to permit a Sunday liquor sales option.

Colorado Rep. Cheri Jahn, who owns a cleaning business, says, “As a small business owner, I cannot imagine having the government tell me what days of the week I am allowed to open my doors.” She adds, “this decision should be dictated by consumer demand. It’s time to level the playing field in Colorado. Liquor stores owners will now be able to join all of the other businesses in having the choice to be opened or closed on Sundays.”

While reform opened the doors for Sunday sales, the Colorado legislators rebuffed grocers and convenience store owners who hoped to gain the privilege of selling full-strength beer. Many of those store owners believe their sales of 3.2 percent-beer will shrink dramatically when the new law takes effect in July. Utah, incidentally, is one of five other states with regulations governing the sales of 3.2-percent beer.

The Colorado fight concerning 3.2-percent beer was intense. Liquor stores aggressively lobbied against the proposal to allow grocery and convenience stores to stock regular beer and wine. Without question, the issue will likely emerge once again when the state legislature convenes in 2009. Then, small store owners likely will be armed with data about the effects upon sales once the new law takes effect this summer.

Back in Utah, the conversation has only begun about how to reform an arcane bureaucratic system characterized by high price margin markups, burdensome regulations, and lack of sufficient staff to handle individual and business orders. McGarry says that, indeed, it would be more workable and feasible in serving mutual interests of the public welfare and industry concerns, especially if the state shifts its interests more toward enforcement and cede control of the retail liquor business to an agency outlet model, which has operated well in many other states. Also, restaurants would be able to order and pay for wines, beers, and spirits at wholesale prices instead of the aggressively marked-up retail prices currently in place.

The Colorado governor’s words at the signing of Senate Bill 82 are worth quoting: “This is a law whose time has finally come. The ban on Sunday sales was an antiquated law that long ago outlived its usefulness or relevance. Everything we know about modern consumer demand says the people of Colorado want the conveniences, options and choices this law will bring. This is about stepping into the 21st Century.”

McGarry is hopeful that a similar statement can be articulated next spring in Utah.