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Lawmakers scramble to avoid liquor store closures

Published: Wednesday, April 6 2011 7:55 p.m. MDT

SALT LAKE CITY — Legislative leaders are scrambling to stop the closure of at least some of the six state liquor stores set to shut down because of a budget cut made last session.

Their efforts come amid growing concern, including from Gov. Gary Herbert, about the Department of Alcoholic Beverage Control plan to slash spending by $2.2 million.

"Hopefully, at the end of the day, some common sense will prevail," the governor told KSL Radio's Doug Wright on Wednesday, the day after legislative leaders met with his office about the closures.

Herbert, who has been questioning the wisdom of closing stores that make money for the state, said the plan to close stores "is really causing anguish around the state and is, I think, probably the wrong thing to do."

The governor said he's hopeful lawmakers will review the budget cut and find money to allow the stores to stay open. "I think that would be the right thing to do," he said.

Senate President Michael Waddoups, R-Taylorsville, called the department plan "scare tactics" and said a $100,000 efficiency study of the department funded by the 2011 Legislature should identify alternatives to store closings.

Waddoups said the department should wait to make a final decision on store closings until after the study is completed "rather than needlessly scaring people and saying, 'Your store is going to be closed.' "

House Speaker Becky Lockhart, R-Provo, said lawmakers believe they can come up with some one-time money to keep the stores open while the study is completed.

Lockhart said while the study will focus on finding efficiencies within the department, it will also look at other options for offsetting the budget cut — including raising liquor prices and boosting sales through more aggressive marketing.

State liquor officials are hopeful the closures can be avoided, at least for now.

"We're optimistic that the Legislature will be able to come up with a plan to at least fund us through the next session," the department's deputy director, John Freeman, said.

Freeman said, however, the bulk of the department's budget goes toward the operation of stores. In addition to closing stores in Salt Lake, Park City, St. George, Provo and Orem, the department is also looking at reducing store hours.

The department's commission chairman, Sam Granato, said he only just became aware of the money set aside by lawmakers for the efficiency study and wasn't sure why it was needed.

"Why do we need to spend $100,000? Just put it back in our budget," Granato said. "There are no inefficiencies. We make money. … We don't need a rocket scientist to tell us that doesn't make good business sense" to close stores.

Still, Granato said, there could be "light at the end of the tunnel." Keeping the stores open, he said, "means jobs and more dollars for the state. It means we can continue to run a successful business in a down economy."

The store closures are to be discussed at the commission's April 28 meeting.

The department has been at odds with some key lawmakers for some time over a past decision to make budget cuts in the Parents Empowered program, which is aimed at curbing underage drinking.

A legislative audit that followed that decision suggested closing stores might have been a better option because customers would continue to buy at other outlets since the state has a monopoly on the sale of liquor, wine and high-alcohol beer.

Waddoups, one of the most vocal critics of the department, said there is real concern that revenue could be lost to surrounding states if stores close. That could mean a tax increase to make up for the lost revenue, part of which funds the state's school lunch program.

"We want to do what's best," Waddoups said. "We want to maximize the profitability of the DABC. At the same time, we want to provide the service that the citizens expect. The legislative intent is not that all these stores close in the next 30 days."

Contributing: Richard Piatt

Email: lisa@desnews.com

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