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Touring a Salt Lake City wine store Thursday was eye-opening for some Utah lawmakers, especially when they learned about the low pay and high turnover rate of liquor store employees.
About 10 members of the Legislature's Business, Economic Development and Labor Appropriations Subcommittee toured Utah's premier wine store at 280 W. Harris Ave. It was the first liquor store visit for a few of the lawmakers who are Mormon and abstain from alcohol.
As the politicians walked the aisles, they learned about such things as the state markup on liquor (86 percent for wine and 64 percent for heavy beer), the speed at which inventory is replaced in stores and who might buy the $2,000 bottle of wine in the locked case.
Employee pay sparked many questions.
Part-time employees at Utah's state-owned liquor stores have a beginning hourly wage of $9, while full-time employees start at $10.25 per hour. Some employees have worked for years without a raise, store manager David Paul said.
"How do you retain anyone?" asked a shocked Rep. James Dunnigan, R-Taylorsville.
State liquor stores have a 33 percent turnover rate, according to statistics from the Utah Department of Alcoholic Beverage Control (DABC).
"I spend an inordinate amount of time trying to hire workers and train them, only to have them leave after a couple months," Paul told lawmakers.
The state's 500-plus liquor store and warehouse employees will get some salary relief July 1, when a 4 percent boost in pay takes effect 2 percent will come from within the DABC budget, while the other 2 percent is the amount the Legislature gave all state employees.
Still, it may not be enough to stop the high turnover rate, which lawmakers, many of whom are business owners, consider a poor business practice. Especially considering that annual liquor sales in Utah grow each year.
"We certainly can afford to retain employees," said Rep. Dixon Pitcher, R-Ogden, the committee co-chairman.
During the 2014-15 fiscal year, state liquor sales were up more than $396 million; this year, the department is trending toward $400 million in liquor sales, said Cade Meier, DABC deputy director.
That money, however, doesn't go back into DABC coffers. State law requires the department to return all its profits to the state, and the Legislature sets the department budget. Most of the sales-tax revenue from liquor sales goes back into the state's general operating fund, but a portion funnels into school-lunch and public-safety programs.
Committee members, who decide how much money is given to state departments such as the DABC, expressed a need for a funding change.
"We need to retain funds in the [DABC] account so you can get things done and we're not holding you back," Pitcher said.
After the tour of the wine store and the state liquor storage warehouse Sal Petilos, DABC director, presented the long-term needs of the department.
Besides staffing and compensation, the DABC needs to build at least a dozen stores and expand or replace existing ones that are too small. A study, conducted in 2013 by the University of Utah's David Eccles School of Business, said the state needed to build at least 12 more liquor stores along the Wasatch Front to keep up with sales and a growing population.
As liquor sales increase, the DABC also will need to expand warehouse capacity, Petilos said.
The DABC's financial needs, coupled with a state law that does not allow for alcohol promotion or advertising, create a "difficult situation" for the state, said committee co-chairman Sen. Brian E. Shiozawa, R-Cottonwood Heights. "We want the DABC to be successful, but not too successful," he said. "We want it to be a retail store, but [fund] it like a state agency."
Whether Thursday's wine store tour results in more DABC funding is still to be determined, but Petilos called it a good start. "It helps when everyone understands what we do and the issues we face."