In June, the Department of Alcoholic Beverage Services (DABS) opened the doors on its latest store, an upgrade for the Salt Lake City Downtown location which was considered out of date and undersized. This first ever two-story location featuring nearly 40 doors of refrigerated products is perhaps the latest example of the shift initiated by the passage of S.B. 176, “Alcoholic Beverage Control Act Amendments” (2022 General Session) which replaced the word “Control” in the agency’s title with “Services.”
DABS is funded through the Liquor Control Fund, an enterprise fund which receives a portion of the profits from alcohol sales. Revenues not used to support the department benefit the state’s budget in other ways. In FY 2023, DABS generated $236.1 million for the state’s budget, to be used to support the General Fund, Uniform School Fund (for school lunches), public safety, and programs to prevent underage drinking. DABS estimates that this latest downtown store will generate about $13.0 million in FY 2025, of which roughly $6 would go towards these other statewide programs.
DABS Operates 52 state stores (and licenses over 100 package agencies). The total number of state stores that the Alcoholic Beverage Services Commission can authorize is capped at a rate of one store per 48,000 residents (about 72 stores currently). New and replacement facilities may be financed through revenue bonds or by appropriations from the State Store Land Acquisition and Building Construction Fund.
During the last six General Session, the Legislature has made several notable changes to the DABS construction budget:
- 2023 – DABS Warehouse and Store Construction
$140.0 million one-time from the General Fund for construction of DABS warehouse expansion and club store, Moab replacement store, Ogden additional store, and Roy replacement store. - 2022 – “Revenue Bond and Capital Facilities Amendments” (H.B. 191)
$43.1 million one-time for new stores in Park City, St. George, and replacement stores in Salt Lake City Downtown and Salt Lake City Foothill locations. - 2021 – “Revenue Bond and Capital Facilities Amendments” (S.B. 143)
$17.2 million one-time for construction for new stores in Sugarhouse (Salt Lake City) and east Sandy. - 2020 – “Revenue Bond and Capital Facilities Amendments” (H.B. 9)
$2.1 million one-time for expansion of the Salt Lake City Foothill store. - 2019 – “Revenue Bonds and Capital Facilities Authorizations” (S.B. 9)
$24.1 million one-time for relocation of the Salt Lake City Downtown store and construction of new stores in Taylorsville and West Valley City.
Another key responsibility of DABS is to license alcohol production and retail establishments (retail locations being primarily bars and restaurants). During the 2024 General Session, the Legislature passed House Bill 548, “Alcohol Amendments” which made a wide variety of policy and budget changes. The key items impacting the budget include:
- An estimated 312 additional Full-Service Restaurant Licenses by FY 2031 (based on population);
- An estimated 136 additional Bar Licenses by FY 2031 (based on population);
- 0.5% increase on the markup on liquor, wine, and flavored malt beverages to support substance use disorder treatment services;
- A gradual increase in the per-barrel beer/heavy beer tax from $13.10 to $14.10 by FY 2027 to provide for three new alcohol law enforcement officers within the Department of Public Safety; and
- Establishes a “round-up” program, which allows state liquor store customers to round up the customer’s purchase to the nearest dollar for deposit into the Pamela Atkinson Homeless Account.
As discussed in our post from last September, the Legislative Fiscal Analyst and Governor’s Office completed an efficiency evaluation of the DABS inventory management system during the 2023 interim. The Department reports they have either completed or are in the process of implementing the following recommendations:
- Adopt industry best practices for inventory;
- Create a structured listing and delisting process to ensure data-driven decision making; and
- Evaluate performance and life cycle of listed products to be more agile in addressing need and demand.
DABS is uniquely charged with not promoting the consumption of alcohol while recognizing that their net revenues support government services. As the state populations grows, and Utah looks forward to hosting the 2034 winter Olympics, the Legislature will continue to evaluate the best path forward for the state’s liquor control budget.