FY 2016 Appropriation

The Department of Alcoholic Beverage Control was created by statute in 1935. The Department is charged with the responsibility of conducting, licensing and regulating the sale of alcoholic beverages in a manner and at prices which reasonably satisfy the public demand and protect the public interest.

Liquor sales provide close to $90 million annually to the State's General Fund. Net profits are deposited in the General Fund and used to support state government operations. State law also requires a transfer of 10% of gross sales to support the school lunch program and 1% to the Department of Public Safety to support alcohol-related law enforcement officers. A portion of the tax on beer goes to local governments to help cover their costs of liquor law enforcement.

Funding History

Funding Issues

Credit Card Processing Fees

When sales volume increases, the overall credit card processing fees and shipping cost increase as a cost of doing business. Funding is needed to keep up with caseload growth. Licensees are also asking to be able to use credit cards for purchases.

Liquor Stores

To replace one-time funding with ongoing funding for 6 liquor stores. Funds were reduced during the great recession.

Package Agency Contractual Compensation

Package agencies are liquor outlets operated by private individuals or corporate entities under contract with the state for the purpose of selling packaged liquor, wine and beer to the general public for off-premise consumption. Package Agencies are located in communities too small to warrant the establishment of a state store. Compensation for the agencies is based on thresholds as the thresholds are met the compensation goes up.
Appropriation Overview

During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $41,153,800 from all sources for DABC Operations. This is a 1.5 percent increase from Fiscal Year 2015 revised estimated amounts from all sources.

Appropriation Adjustments

In addition to statewide compensation and internal service fund cost increases, the following appropriation adjustments were made during the 2015 General Session:

DescriptionOngoingOne-Time Alcoholic Beverage Control Amendments$15,600$15,600
OngoingOne-TimeFinancing Source
$15,600$15,600Liquor Control Fund
Enactment of this legislation could increase dedicated credit revenue by $4,000 annually and $6,000 one-time in FY 2016 from the Bureau of Criminal Identification fee identified in the legislation. Pass-through funding to the Federal Bureau of Investigations could also increase by $10,400 annually and $15,600 one-time from the fees in the legislation. The Department of Alcoholic Beverage Control costs identified below could reduce the year-end transfer to the General Fund by $15,600 ongoing and by $15,600 one-time in FY 2016. Enactment of this legislation could cost Public Safety $4,000 ongoing from dedicated credits revenue for data storage, review and analysis. Potential costs to the Department of Alcoholic Beverage Control for oversight, processing and background checks could be $15,600 annually from the Liquor Control Fund and $15,600 one-time in FY 2016. Spending from the Liquor Control Fund impacts year-end transfers to the General Fund.
Backfill IT Efficiencies in FY 2016$0$200,000
OngoingOne-TimeFinancing Source
$0$200,000Liquor Control Fund
Funding was reduced for efficiencies that will begin in FY 2017 when the new data system is in place. To prevent a reduction to operations funding is proposed to backfill the ongoing cut with one-time funding.
Credit Card Processing Fees$724,000$0
OngoingOne-TimeFinancing Source
$724,000$0Liquor Control Fund
When sales volume increases, the overall credit card processing fees and shipping cost increase as a cost of doing business. Funding is needed to keep up with caseload growth. Licensees are also asking to be able to use credit cards for purchases.
Eden Package Agency$65,000$0
OngoingOne-TimeFinancing Source
$65,000$0Liquor Control Fund
Growth in demand has led to a request to create a replacement package agencies for the one that was closed during the Audit crisis.
Efficiencies from New Information System ($200,000)$0
OngoingOne-TimeFinancing Source
($200,000)$0Liquor Control Fund
DABC has asked to use the one-time savings from a bond payment to establish a new information system. The cost savings from the maintenance contracts could be approximately $200,000 annually beginning in FY 2017. Take the savings ongoing in FY 2016 and replace it with one-time.
Eliminate Shipping Cost Increases ($300,000)$0
OngoingOne-TimeFinancing Source
($300,000)$0Liquor Control Fund
Eliminate the shipping cost increases provided in the 2014 General Session since the agency was able to absorb them and lapse the funds to the General Fund.
Liquor Stores$1,000,000$0
OngoingOne-TimeFinancing Source
$1,000,000$0Liquor Control Fund
To replace one-time funding with ongoing funding for 6 liquor stores. Funds were reduced during the great recession.
Package Agency Contractual Compensation$35,000$0
OngoingOne-TimeFinancing Source
$35,000$0Liquor Control Fund
Package agencies are liquor outlets operated by private individuals or corporate entities under contract with the state for the purpose of selling packaged liquor, wine and beer to the general public for off-premise consumption. Package Agencies are located in communities too small to warrant the establishment of a state store. Compensation for the agencies is based on thresholds as the thresholds are met the compensation goes up.
West Valley Liquor Store O&M$41,000 ($41,000)
OngoingOne-TimeFinancing Source
$41,000 ($41,000)Liquor Control Fund
This pays for future O&M on a non-state funded building authorized in S.B. 9.

The Department of Alcoholic Beverage Control measures case sales per FTE, warehouse inventory turnover, and percent of profits to sales as performance measures. Data is shown below.

Case Sales per Retail FTE

Warehouse Inventory Turnover

Percentage of Profit to Sales

Intent Language

HB0003: Item 65

Under Section 63J-1-603 of the Utah Code, the Legislature intends that any remaining amount from the $2,050,000 one-time bond payment savings appropriation provided by Item 19, Chapter 10, Laws of Utah 2014 for the Department of Alcoholic Beverage Control - DABC Operations not lapse at the close of Fiscal Year 2015. These funds will be used for completion of the warehouse management software project.

The main DABC line item, Alcoholic Beverage Control, contains the following programs: Executive Director, Administration, Operations, Warehouse & Distribution, and Stores & Agencies.

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COBI contains unaudited data as presented to the Legislature by state agencies at the time of publication. For audited financial data see the State of Utah's Comprehensive Annual Financial Reports.