A recent 172-page report by Massachusetts State Auditor Diana DiZoglio highlights significant inequities and inefficiencies in the state’s liquor licensing system, which dates back to the Prohibition era and has remained largely unchanged since 1933. The report reveals that the allocation of liquor licenses, determined by population size, has created a persistent imbalance across cities and towns in the Commonwealth.
According to fiscal year 2024 data, 64 municipalities—including Somerville and Salem—have fewer licenses than needed, while 238 others are not using their full allotments. This discrepancy has led to 3,466 unused alcohol permits statewide. The report links these constraints to lost economic opportunities, such as the difficulty for new restaurants to open or existing establishments to expand. Comparatively, Massachusetts has fewer full-service restaurants per capita than neighboring states, correlating with approximately 500 fewer restaurants and 9,500 fewer jobs.
The report recommends granting all municipalities control over their liquor licenses to address these challenges. However, efforts to reform the system face political obstacles. While the past three governors—Deval Patrick, Charlie Baker, and Maura Healey—have advocated for local control, legislative progress has been limited. Senate President Karen Spilka is currently pushing for change through a Senate economic development bill, but the House of Representatives has stalled the measure despite a similar bill introduced this session by State Representative Joseph McKenna.
The current system requires municipalities seeking additional licenses to go through a cumbersome home-rule petition process at the State House, which some local leaders criticize as paternalistic. Somerville Mayor Jake Wilson described the state’s approach as treating cities “like naive children.” This process has resulted in a flurry of petitions this session, with about 20 filed.
An additional complexity is that 26 municipalities, including Cambridge, Plymouth, Worcester, and many towns on Cape Cod and in the Berkshires, have had local control over liquor licensing since between 1978 and 1984. This creates a two-tier system, allowing some areas to issue more pouring licenses than others. Boston is another exception, as its license numbers are still regulated by the State House.
Supporters of the existing system argue that centralized oversight provides necessary checks and balances. Representative Aaron Michlewitz pointed to past efforts when Boston requested over 200 new licenses, noting neighborhood concerns about requirements for license holders to serve food were addressed only after state review.
On the other hand, advocates for local control, such as Nick Korn of the beverage consultancy Offsite, view the 26 municipalities with local authority as a “perfect control group,” demonstrating that local control promotes economic growth. The state Alcoholic Beverages Control Commission would continue to oversee licenses approved locally, ensuring regulatory standards remain intact.
For restaurateurs like Will Gilson, the current licensing system presents a significant barrier in certain cities. Gilson, who operates the Puritan and Company hospitality group in Cambridge, credits local licensing control for more affordable access to permits, noting he paid $125,000 for an all-alcohol license initially but was able to start with a free beer-and-wine license. He said that in Boston, where licenses can cost as much as a starter home, the high price deters many prospective entrepreneurs.
The report paints the Massachusetts liquor licensing framework as outdated and in need of reform to foster equitable economic opportunities. Despite repeated calls from the auditor and some local officials, political reluctance has so far stalled meaningful change.