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Troy economist: Alabama chose liquor stores over Driver’s License offices (Opinion)


In the face of ongoing budget concerns, the state of Alabama released a list of 31 driver’s license offices it plans to close in an effort to cut government spending. Of those 31 cities losing a driver’s license office, 21 of them — 68% — currently have an ABC liquor store, operated by the state. How is it that our elected officials decided that their role in selling liquor is more important than making sure people have access to a driver’s license?

The answer is that this is just another example of politicians playing political games when they run out of taxpayer money to spend. The fact is, our elected officials are punishing those that elected them —unnecessarily inconveniencing families and hard-working people of this state in an effort to fabricate a dire situation to justify squeezing them for more tax money.

While I enjoy my scotch (Laphroaig) as much as the next guy, selling liquor is not a necessary function of government. Liquor can, and is, provided effectively by the private sector. In fact, in terms of price, quality, and selection, private companies have a far better track record of providing products and services.

Here in Alabama, there are already 550 privately operated liquor stores, and only 17 other states are still in the liquor business, showing that private stores can effectively and safely serve customers.

If Alabama’s government is genuine about cutting operating costs, leaving liquor sales to the private sector — often, small, locally owned shops — is a great place to start. Not only would this move get government out of the business of hawking liquor in low-income areas — a business it shouldn’t be doing in the first place — it would save the state millions in operating costs including rents, wages, and pension contributions.

Not only would shedding rental costs for more than 170 ABC stores and personnel costs for more than 600 state employees save the state money, the revenue generated by liquor stores could readily be generated from taxes collected by private liquor stores.

The Alabama ABC Board has taken a first, small step in this direction by announcing the closure of 15 ABC liquor stores, but only four of those stores are in cities where a driver’s license office is being closed. That means that even after these 15 ABC liquor stores are closed, 55% of the cities losing a driver’s license office will still have state-operated ABC liquor stores.

While some of these driver’s license offices are not a justified state expenditure since they serve so few residents, you would think state leaders would first shut down state-run liquor stores in those cities. Instead, it appears that shutting down these driver’s license offices is just another ploy to bolster support for future tax increases.

If elected officials are sincere about cutting spending, after privatizing liquor stores, they could also look to privatizing driver’s license offices. States across the nation, including ArizonaLouisiana, and Ohio, have successfully privatized driver testing, licensing, and title services, helping to expand the availability of these important services to residents while cutting costs for taxpayers.

If the state can’t justify funding a driver’s license office in a city, it probably can’t justify operating a state-run liquor store in that same city. In other words, we might have mixed priorities if we pay state employees to sell booze — and even provide mixed drink recipes — over driver’s licenses.


Daniel J. Smith is an associate professor of economics at the Johnson Center at Troy University. Follow him on Twitter: @smithdanj1

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