The state’s General Fund budget once contained language prohibiting the Alabama Alcoholic Beverage Control Board from raising a fee on suppliers like it did last week.
Some lawmakers want to bring that language back in the upcoming legislative session and stop further increases to the bailment fee, paid by liquor suppliers on every case of product distributed by ABC, to help pay for a new warehouse in Montgomery.
“It got omitted from the budget and it needs to go back in there,” Sen. Chris Elliott, R-Josephine, told Alabama Daily News on Wednesday.
Language in the fiscal year 2015 General Fund budget said the bailment fee, relatively new at the time, couldn’t be higher than 72 cents per case.
That language was removed in the 2016 General Fund budget and replaced with verbiage that says all revenue generated from bailment fees shall remain with the board to be used for its operations.
That language is in the current budget and gave the board the ability last week to increase the fee to $1 starting in January. That should generate about $1 million in additional revenue per year. Originally, ABC Administrator Curtis Stewart proposed a three-phase increase that would put the fee at $1.50 in 2028 and generate an additional about $3 million a year. The three-member board agreed to revisit the increase next year.
In fiscal 2024, alcohol sales in Alabama generated $368.2 million for various funds, including $136.8 million for the General Fund. Some agencies, including human resources and mental health, have direct allocations from ABC revenue.
Meanwhile, operating expenses in fiscal 2025, which included staffing and leasing of ABC stores across the state, were about $142.2 million, according to state records.
Elliott has been critical of the proposed and now approved fee increase since learning of it about a month ago. He calls it a tax increase that was not disclosed to lawmakers when ABC officials discussed the plans for the new $98 million warehouse and administrative offices currently under construction in Montgomery. The Retirement Systems of Alabama is building the structure and will lease it to ABC until the agency eventually owns it. The systems have a similar agreement with the Legislature for the new State House expected to open next year.
In September, ABC officials said the warehouse will be funded through operating expenses.
“They said, ‘We got this, we don’t need any money, profits are going to cover (the cost of the new warehouse),’” Elliott said.
A comment was not available from ABC on Wednesday. Last week, Stewart said Alabama is among 10 alcohol control states with bailment fees and its is the lowest. It was established in 2013 and hasn’t been raised since.
Rep. Steve Clouse, R-Ozark, was the House General Fund budget committee chairman in 2015 when the budget had to be passed in a special session amid a revenue shortfall. On Wednesday he said he doesn’t remember ABC or anyone else lobbying to change the bailment fee language or why it was changed.
But it might be time to consider reinstating the cap, he said.
Sen. Greg Albritton, R-Range, said Wednesday he expects multiple pieces of legislation next year related to the ABC board.
While the board may be allowed to raise the fee, “they’ve taken liberties,” Albritton, the Senate General Fund budget committee chairman, said.
“I believe that the ABC is functioning off the leash that the government holds on them,” he said. “They are owned by the people of Alabama.”