If you Can’t Make Money Selling Alcohol… (Alabama Budget Edition)

Via WSFA:  At least 15 state-run ABC liquor stores set to close due to budget cuts

Citing a $5.5 million cut to its fiscal year 2016 budget, the Alabama Alcoholic Beverage Control Board announced late Thursday that is will have to close or consolidate at least 15 state-run ABC liquor stores. The closures will take place over the next three to six months.

ABC Administrator Mac Gipson announced the closures saying, "the legislature has seriously jeopardized our ability to meet our financial obligations," after finalizing a General Fund budget that, "arbitrarily reduced the ABC Board’s spending authority…"

[…]

Gipson said the ABC Board generated $215 million for the General Fund in 2014.

I see on the list provided in the story that the store right around the corner from me is one of the ones slated for closure—I guess I haven’t been doing enough of my part to keep the place afloat.

In any event, it may well be that closing these stores makes fiscal sense (although it would hardly surprise me if many, if not all, of these locations produced positive cash flow) but given that the ABC Board generates revenue, one wonders.  I will be curious as to how much the ABC Board generates after the cuts (as I doubt any actual thought went into this).  Indeed, I would be curious to know how the stores that will be closed were doing.

(Don’t get me wrong, I would prefer that the state would get out of the liquor business altogether).

Of course, with the closure of a large number of driver’s license offices, maybe this is all a complex anti-drunk driving campaign!

FILED UNDER: Quick Takes, US Politics
Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is a Professor of Political Science and a College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter

Comments

  1. Argon says:

    Kinda like saving money by stopping tax collection. Alabama is in a serious financial mess. Clearly they need to cut taxes more to increase revenue and then all will be well again.

  2. Just 'nutha ig'rant cracker says:
  3. walt moffett says:

    Sometimes I wonder if recent closings are all part of an effort to get legislators to to pay attention to those nicely printed books they get every year showing where the money comes in, where it goes and how this compares to other states in the region. Kick the can with the budget has been going on for at least 45-50 years.

  4. Ron Beasley says:

    Here in Oregon the Liquor stores are privately owned but licensed by the state. The state remains the only wholesaler for distilled spirits and tells the private outlets what they can charge. They can’t sell wine or beer but can sell mixers. I believe the state makes a lot of money.

  5. DrDaveT says:

    @Argon:

    Kinda like saving money by stopping tax collection.

    Smile when you say that. Congress has been radically under-funding the IRS for years, on the grounds of “…but we don’t like them.” Independent estimates of how much additional owed-but-never-collected tax revenue each marginal dollar of funding would produce range from about $8 to about $20. [Insert your own “no-brainer” joke here.]

    It’s gotten so bad that even GAO, who normally plays the role of Congress’s attack chihuahua, has pointed out the problem repeatedly in various reports.

  6. t says:

    interesting since costco think’s it’s a good idea to get into the liquor business in the state.

    http://wiat.com/2015/08/17/costco-in-hoover-to-begin-selling-liquor/

    “We are concerned about all alcohol expansion,” Godfrey told WIAT. “The fact that you open the door for Costco to start selling liquor, you’re going to see it opening up other (big) box stores, and pretty soon, it’s going to be everywhere.”

  7. walt moffett says:

    @t:

    Not particularly, Costco will have to buy its liquor from the same state store I’d use and pay the same price since the ABC Board is the sole wholesaler of spirits in the state. Costco will of course, add a markup and offer the convenience of having high markup items like glass ware, mixers, etc under the same roof.

  8. HarvardLaw92 says:

    Hailing as I do from a place where buying alcohol involves picking up the phone, calling your favorite booze barn and meeting the delivery guy at the door (they pretty much all deliver here), I’m blown away that these anti-government types in the South have a state owned / operated monopoly on liquor stores.

  9. @HarvardLaw92: There are some serious contradictions going on, to be sure.