A leader of a legislative group formed to improve government efficiency wants to explore the cost of privatizing North Carolina’s system for liquor sales.

Members of the state House Select Committee on Government Efficiency on Wednesday grilled the leader of the North Carolina Alcoholic Beverage Control Commission, pressing him on the benefits of state-controlled liquor.

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The state-controlled ABC system generates revenue for local governments, helps protect against underage drinking, and generally allows for greater oversight of alcoholic products than a private system might offer, Hank Bauer, the ABC commission’s chairman, told lawmakers.

Some committee members said they’re fine with the state’s current setup for liquor sales, while others suggested it could be improved or even replaced altogether. State Rep. Keith Kidwell, a co-chair of the committee, challenged Bauer’s positions and said the committee should study the cost of privatizing North Carolina’s system.

State legislators for years have talked about pivoting from a state-controlled liquor sales system — but the idea has never gained strong momentum.

“The Libertarian in me says the state does not belong with its hand in the alcohol sales business,” Kidwell said, adding that committee staff should investigate the “true cost” of privatizing the state’s liquor sales.

The state committee has a similar mission as President Donald Trump's Department of Governmental Efficiency — the group focused on slashing federal spending. The North Carolina effort has taken a substantially less aggressive approach than the federal DOGE. And unlike DOGE, the state legislative committee contains members of both political parties.

Republicans have been in charge of the North Carolina legislature — and therefore state spending — for more than a decade. So unlike Trump, who has sought to blame allegations of waste or fraud in government spending on periods of Democratic control, North Carolina Republicans have to walk a political tightrope when making accusations of government waste, or else risk implicating themselves.

They've indicated this new committee would focus less on spending levels and more on policy decisions, such as diversity, equity and inclusion efforts within state government. The idea of government efficiency itself isn't a partisan one. In his first State of the State speech this March, Democratic Gov. Josh Stein announced he was asking for his own government efficiency task force.

The state committee summoned several members of Stein’s administration earlier this year, heaping criticism on the state’s outgoing Department of Motor Vehicles Commissioner. North Carolinians have complained about staffing shortages and long lines at the DMV for years.

Wednesday’s hearing with the ABC commissioner was mostly cordial, with committee members mostly asking Bauer basic questions about North Carolina’s system.

Bauer said fees collected by the commission — not taxpayer dollars — fund ABC system operations. The commission expects to generate $1.8 billion in sales revenue in the 2024-25 fiscal year, Bauer said. Of that, about $170 million will be distributed to local governments.

Bauer said the state could bring in more revenue if it had more space for storing liquor shipments, and asked if the state would be willing to pay for a new warehouse. Committee members said support for the project is unclear, and that the ABC commission should raise the funds on its own.

Kidwell, R-Beaufort, offered the most criticism of any committee member.

Bauer said that, on the whole, North Carolina would likely lose money by privatizing liquor sales. Crime increased in Washington after lawmakers there privatized their previously state-controlled liquor sales system, Bauer added.

Kidwell disputed Bauer’s claim about privatization leading to increased crime in Washington. Kidwell also theorized that the state could restructure its alcohol-related fees and tax rates so that the state doesn’t lose money by privatizing liquor sales.

At the very least, the commission should do a better job of explaining the benefits of a state-run liquor system to North Carolinians, said state Rep. Phil Rubin, D-Wake.

“I hear from constituents a general feeling that, because it's not a privatized system, they're losing out on price and they're losing out on selection,” Rubin said.

“That might be dead wrong,” Rubin continued. “But if it is wrong, then I think that we have a gap between what the public thinks is happening and what is happening — and that's harmful for the credibility of the system.”