Division of Alcohol Beverage Control

The Enacted Budget passed by the Legislature on May 1, 2003 makes the following changes to the Executive Budget:

• Denies the Executive proposal to abolish the State Liquor Authority and transfer its functions to ABC.  Adds $171,000 in personal service, $62,000 in fringe benefits, and $7,000 in indirect costs to the Administration Program to continue the State Liquor Authority’s operations.  There is still a $237,000 decrease in the personal service appropriation for the Administration program.  It is unclear whether the Legislature has approved the transfer of the Division’s administrative support services to the Office of General Services, however, based on the personal service cut it is likely that they did approve it.

The Executive Budget recommends (analysis as of February 7, 2003):

·        A recommended workforce of 156 FTEs, which represents a decrease of 16 FTEs from the adjusted SFY 2002-03 FTE workforce.  The adjusted FTE workforce for 3/31/03 is 172 FTEs, 9 FTEs lower than the 3/31/03 FTE workforce that was estimated in the SFY 2002-03 Executive Budget including the loss of 1 FTE in Administration, 4 FTEs in Compliance, and 4 FTEs in Licensing and Wholesaler Services.  The additional 16 FTE reduction in SFY 2003-04 includes the loss of 8 FTEs in the Administration program, 4 FTEs in the Compliance program, and 4 FTEs in the Licensing and Wholesaler Services program.  According to GOER and DOB, 7 of the 16 FTE reductions will be position abolitions which are most vulnerable to layoff.

·        An overall State Operations budget of $13,057,500, a 5% decrease from the enacted SFY 2002-03 budget; the budget is completely funded by “Special Revenue Other” funding derived from license and permit fees.

·        A $408,000 decrease in the personal service appropriation for the Administration program, reflecting the proposed 8 FTE reduction for this program in SFY 2003-04.  The Executive Budget recommends the transfer of the Division’s administrative support services, such as payroll, to the Office of General Services.  No administrative staff will be moving to OGS and this appears to be the staff most vulnerable to layoff.  There is an unexplained $797,000 (52%) increase in the nonpersonal service appropriation for this program. The Executive Budget does state that ABC will continue to upgrade its computers and imaging systems and “re-engineer and automate the licensing process in order to reduce processing times, contain operating costs, and accelerate revenue collections.” The cost of this process may be related to the large nonpersonal service appropriation increase.  This issue should be clarified at a Statewide Labor/Management meeting.

·        A $353,000 decrease in the personal service appropriation for the Compliance program, reflecting the 4 FTEs eliminated in the program beyond what was anticipated in the enacted SFY 2002-03 budget and the 4 FTEs to be eliminated during SFY 2003-04.

·        A $409,000 decrease in the personal service appropriation for the Licensing and Wholesaler Services program which reflects the 4 FTEs eliminated in the program beyond what was anticipated in the enacted SFY 2002-03 budget and the 4 FTEs to be eliminated during SFY 2003-04.

·        Legislation to abolish the State Liquor Authority (SLA) and transfer its functions to ABC. According to the Assembly Ways and Means Committee, this will save $239,000 by replacing the three member SLA with a single agency head.

·        Legislation to authorize ABC to file default judgments for unpaid penalties.