When the State Liquor Authority was formed in 1934, the state’s sprawling network of speakeasies was still winding down. Bootleggers shuttled from juice joint to gin mill, and moonshine was a common brew.

In the decades since, whiskey-smuggling crime syndicates have gone the way of the flapper.

But to many, the SLA is still a racket.

In 2008, the agency was embroiled in a scandal involving bought-off employees expediting requests for liquor licenses. And for decades, the SLA has been seen as a political patronage mill.

As a result, many of the agency’s most basic powers, including control over its own budget and staff, were stripped away by one administration after the next, leaving a decrepit and demoralized agency despised by the industry it policed.

But with a new, hard-charging chairman and some basic protocols governing the behavior of its employees, the SLA says it is back on the wagon. And so SLA Chair Dennis Rosen, who was appointed last year to clean up the agency, is calling for the state to get the same broad regulatory powers every other state agency has.

“This agency will never, in effect, be grown up, it will never be a full-blown, responsible agency until it is granted,” said Rosen of the power he is seeking. “I understand the hesitation of some legislators based on the history of the agency.”

Because the state’s liquor laws contain archaic provisions governing everything from what liquor stores can sell to where bars can operate, there have been disagreements within the industry over what certain restrictions mean and how the SLA can enforce them.

A debate has raged within the SLA, for example, over whether products such as wine coolers and malt liquor should be considered “wine products” or “wine specialty products.” Such classifications determine who gets to sell those products—supermarkets or liquor stores—and reap the millions in annual profits they produce.

“Back in 1934, they weren’t dealing with wine coolers and malt liquor,” Rosen said. “There are products out there, very innovative products that people want to sell.”

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“Back in 1934 they weren’t dealing with wine coolers and malt liquor,” said State Liquor Authority Chairman Dennis Rosen. “There are products out there, very innovative products that people want to sell.”

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Rulemaking authority would allow the SLA to make that distinction without approval from the Legislature. But lawmakers have been reluctant to give an agency with a history of corruption the power to essentially control millions in industry profits. Lobbyists for both the supermarkets and the liquor stores would likely pounce on the SLA, which is smaller and less accountable than the Legislature.  

Assembly Member Robin Schimminger, who chairs the Economic Development Committee, opposes giving the SLA such power.

“The grant of rulemaking authority is forever, and would be at the disposal of this chair and future chairs,” Schimminger said. “So there is some caution in that regard.”

After decades of mismanagement, the SLA now has a backlog of more than 2,000 liquor license applications from bars and restaurants, which can take as long as six to eight months to approve. Its staffing levels are at a historic low, down from 700 at one point in the agency’s history to just around 200 now. Bars and restaurants have complained of lost revenue and jobs, and public health experts say the agency is ill-equipped to fight an increase in underage drinking.

As a result, the state’s Law Revision Commission last year recommended a sweeping overhaul of the state’s liquor laws. Besides giving more power to the SLA, including the power to grant temporary licenses and BYOB permits, and allow the chairman to hire key officials without approval from other agencies, the commission called on the Legislature to eliminate some of the outdated rules that govern how bars, restaurants and liquor stores operate.

Now, for example, bars and restaurants must go through a lengthy community approval process in order to operate within 200 feet of a church or school or 500 feet of three pre-existing businesses with liquor licenses.

Liquor stores, too, are subject to strange restrictions. They are allowed to operate only on the first floor of a building, can have only one set of stairs and are barred from selling anything other than liquor.

They are even prohibited from returning or exchanging the wrong bottle of bubbly.

“If a customer, for example, buys a bottle of wine and they leave your store and they get in the car and they go, ‘oh my god, I needed a bottle of Chardonnay, not a bottle of Sauvignon Blanc,’ legally we’re not allowed to return that bottle,” said Stefan Kalogridis, the owner of Colvin Wine Merchants in Albany and president of the New York Wine Industry Association. “Things like that could be changed.”

Rosen has gone to great lengths in recent months to ease the industry’s concerns, paring down the backlog of pending licenses and hiring key officials with Ivy League degrees.

But he admits that the specter of the SLA’s bad old days remains.

“People haven’t trusted this agency,” he concedes. “They’ve seen it as nothing more than a repository of political patronage.”