Alcohol, Utah Style

What is a State supposed to do with its biggest cash cow? If you or I had a private business, which had a monopoly on its’ customers, and this business was dropping 39.46% to the bottom line, we would have Wall Street investors clamoring for a piece of the action. And that 39.46% is not just hundreds of dollars, no; it represents $144,903,967!!! Yes, you read it correctly: 144 MILLION dollars of PROFIT. (OK, round it up to145 Million. What is 96$ thousand among friends?)

Utah is very proud of the fact that “drinkers” pay for the school lunch programs, to the tune of $38,343,822 in FY 2014. And that is all well and good; well, we will let it go as such for now, anyway.

Utah has a drinking problem; it is known as the Division of Alcoholic Beverage Control. DABC controls all alcohol within the state’s borders, from how many clubs, restaurants and bars have liquor licenses to what products are available on the shelf for consumer purchase. In Utah, restaurants, clubs, and bars purchase alcohol from the State at retail (the same price you and I pay) and then mark it up when they sell it to the consumer. A $38 bottle of wine becomes a $60 bottle of wine at the restaurant.

Now, just so you don’t think DABC is uncontrolled, let me advise you that it is in fact very controlled, by the Utah State government. A state government that cut $500,000 out of the operating budget for the DABC in 2015.

Out here in the real world, if you or I had a business that was dropping almost 40% to the bottom line, would we cut its operating budget? Hell, no, we would be trying to increase sales!

Would we be happy with an employee turnover rate of 75%? No, we would try to keep employees, not repeatedly go through the expense of training new ones over and over again.

In this mythical business, would we turn a deaf ear to our customers when they complain about stock-outs and long waiting lines? I doubt it.

Would we tell our largest customers, sorry, we don’t have all of your order at this location; you need to drive across town to pick up the rest of it? No, we wouldn’t. We would demand our supplier fix their logistics problem.

Would we tell our store managers they had to run two or three stores instead of focusing on one? Really? That would not be in the business’s best interest, would it?

If we went to the annual stockholders’ meeting, and this was the situation, we would be ready to fire the CEO/Director and electing a new board of officers. But this is Utah, and we don’t get that choice.

Utah’s Governor, Gary Herbert, in a news conference two months back, declared everything was fine at DABC, except for a “few” disgruntled employees. Now, after numerous op-ed pieces and “letters to the editor,” the governor, or at least his office, is changing its tune. The governor’s office announced they are undertaking a review of DABC, and hiring an out-of-state consultant to see what can be done to “improve” DABC.

I have no idea how much we, as taxpayers, are paying for this consultant. But, Governor Herbert, here is some free advice.

First, put all of the employees at the state-owned liquor stores on as full time employees, with benefits. A turnover rate of 75%, coupled with the fact that these state employees are only considered part time, and therefore not eligible for benefits, should have you concerned. As any retailer can tell you, happy employees directly correspond to happier customers.

Second, address your inventory problems. When you have a monopoly, it is easy to say, “Too bad” when you are out of stock. But say “too bad” often enough, and the customers will go to Idaho, Wyoming, Nevada, and Colorado instead of visiting your store. Your large customers-the restaurants, clubs and bars-should not have to drive across town to fill their orders. The data from your cash registers can help you plan for the “busy seasons,” like Thanksgiving, Christmas, New Year’s Day, and the 4^th of July. Be sure you have enough inventory, and employees, ready for those huge volume days.

Third, take care of your customers, your profit-makers, also known as consumers. Be sure the cash registers are fully staffed during your busy times. Remember the grocery chain that said “if three people are waiting in line, we will open another register?” Have staff trained in wines, liquor, and beer, so they can answer questions customers may have about the products. Instead of having a neon sign light up when DABC outlets are closed, think like a retailer (which you are) and have a neon sign that says “open.”

Fourth, have one manager and two assistant managers assigned to each store. Empower them to make the schedules needed to serve the customers, and to modify the orders to insure there are no stock-out conditions.

Lastly, change the make-up of the Liquor Commission to include members of the hospitality community, and community members at large. The majority of the members should have experience in alcohol use and consumption!

Governor Herbert, I hope these suggestions can help you improve the image of the DABC with your customers and your employees. Feel free to use them, you can even claim them as your own ideas if you so desire.

One last thought, Governor, lower all your prices by 10%! That would really go a long way to making customers happy.

R. M. Hartman

As always, your comments are welcome.

Data from 79^th annual report, DABC FY 2014. http://abc.utah.gov/about/documents/79th_annual.pdf retrieved July 8 2014.

An open letter to Utah State Senator Jim Debakis

Senator Debakis,

I read with pleasure, and in the main agree with, your op-ed in the July 5^th SL Tribune. Education in Utah is in terrible shape, and the largest single contributor to the condition is the lack of funding. I’d like to discuss your article and share my thoughts with you.

As you pointed out, teacher salaries in Utah are an embarrassment to any thinking individual. Utah colleges and universities turn out very well qualified teachers, but they cannot afford to stay in Utah and teach. We are losing this valuable resource to 49 other states. Our teachers should be paid, at the least, the average salary for teachers in the United States; $56,069 is the national average, as opposed to Utah’s average of $46,571. Our teachers, even at beginning salaries, should not be eligible for welfare.

Our class sizes are another point of discussion. Please consider this statement:

The ration of students to teachers must not be confused with average class size, which is the number of students assigned to a classroom for instructional purposes. Class size and student-teacher ratio are very different concepts and cannot be used interchangeably. According to recent studies, the difference between student-teacher ration and average class sizes in K-3 is 9 or 10 students. (Sharp, 2002)

Utah’s S/TR is set at 22.4; so this gives an average class size of 31.4 to 32.4 students per class. This is absurd, to say the least. Not even the most talented K-12 teacher can educate 30 children in a classroom effectively. One of our primary goals should be to reduce actual class size. The average S/TR in the United States is 16/1, which yields a class size of 26/1. This would be a good starting point for Utah to achieve. 

You mentioned Wyoming’s educational funding in your op-ed, I would like to expand upon that. One of the (major) reasons Wyoming can put so much more into education than Utah is willing to afford, is the extractive tax. Wyoming views it’s minerals as a resource owned by all the people, and therefore taxes extraction to benefit all the citizens. Utah can, and should, increase the mineral extraction tax; for example, coal in Wyoming is taxed at 3.75% (underground) or 7% surface, while Utah has no tax on coal extraction. (Source: The Council of State Governments, http://knowledgecenter.csg.org/kc/system/files/7.15_2013.pdf, retrieved July 6, 2015)

This money could be used to offset the effect of returning 100% of the state income tax to funding public education, and in fact could be used to increase our educational funding to national averages.

I do admit, Senator, establishing this tax would be a very hard sell, given the mind-set of most of Utah’s legislators.

Charter schools, in my opinion, are another drag on our educational system. While I realize they are very popular with our legislature, I feel (and on this subject I have only anecdotal information) charter schools serve no educational purpose that is not met by the public system. Charter schools can reject any student, and send them back to the public schools, but they get to keep the funding for that student for the school year. This, in effect, boosts the revenue per student in the charter school, while cutting the revenue per student in the public system, thereby exasperating the public school funding issue. Charter schools exist, in my opinion, only so “my” child does not have to be in a classroom with “those” children. My solution is simplistic: close the charter schools; if parents want to pay for private school education, certainly that is their option.

To address the matter of accountability, I would propose that the State Board of Education consist of educators, not only on the K-12 level, but also college/university educators. They should be advised by members of the business community, who can use their knowledge to drive education to the curriculum needed to prepare students for college, and to compete for good, well-paying jobs. In this vein, we also need a robust trade school sector that can offer good careers for those who do not want college, or would not be successful in obtaining a college degree. The State Superintendent of Education should be held personally responsible for the success or failure of the school system.

Given the above, I would like to see the Utah legislature commit to a 5-year plan to achieve the following goals:

1)     Increase per-pupil funding to the national average;

2)     Increase teacher pay to the national average;

3)     Reduce class sizes to the national average.

Senator Debakis, I appreciate your progressive stance on education, and your willingness to open the much-needed discussion on our educational system.  I wish you the best in reforming our current educational system.

Respectfully,

Robert M. Hartman

Your comments are welcome, as always.

It’s July 4, 2015. Independence Day in the United States of America.

It has not been an easy year; some of us have cried tears of joy, others among us have gnashed their teeth. We have seen changes in our country this year, changes that have taken years to occur yet seemingly happened overnight. People have died, churches have been burned; all in the name of (a) God. But God is not in charge of our secular laws, which are the basis of our freedoms.

Its important today, I think, to remember our founding fathers; who wanted to establish a country free from the 16^th century boundaries of god and country. The founding fathers, in my study of history, wanted America to be a country ruled by the laws of reason, of equal rights, of fair play.

The founders could not imagine the tools and abilities we have now. They had to rely on post by horseback, of letters written by hand, using quill and ink. Today, we have the internet, IM, email; all unfettered by officials and accident of riders. I think, personally, they would have enjoyed the instant communication; the ability to reach out through blogs and social media.

I will agree, that the founders did not envision publicly a country where women and those of color had the right to vote, the right to be equal. I think those ideas were beyond the scope of their vision; but not for the reasons so many think. They were trying (and I think they succeeded well) to establish the original ideas of freedom, they were caught up in the moment of trying to have freedom for white middle class men, they did not dare to dream of the same freedom for women and people of color. It was not an error of omission; rather they were doing, in my opinion, to achieve the best they could at the time. Remember where, and when, they were. Remember what they were trying to achieve. In all of the documents, papers, and letters I have researched from those brave men, there was not any mention of denying those same freedoms to all of the American people; they were simply trying to establish some basic firm ground, a ground from which we could expand and grow.

And grow we have, far beyond even the most fertile imagination of the founding fathers. We have a world-class economy, a growing but frustrated middle class, and an over-expanded military, even as we work to understand our own internal struggles. From their initial work, we have seen women and people of color achieve the right to work, and to be accepted as equals. Is it perfect? Far from it! But we must now continue the work of our founding fathers.

America always has been, is now, and forever (I hope) will be a work in progress. America was, at the time of its creation, the most democratic of nations. We have been an example to other nations trying to work to independence. Many other nations have used our declaration of independence, our methods of laws, and our systems of governance, to establish their own countries. Of that, we should be proud! We, as a nation, are looking for ways to improve, to be more inclusive. That work is hard, difficult, and fraught with peril. We may at times, lean more right, or more left. But it is a work we should always embrace. It is our duty, our debt to the founding fathers, to examine our relationships and to grow; if needed, to change how we deal with the challenges of our times.

It is time, my fellow Americans (thank you LBJ) for all of us to look hard at what we believe, to look at the big picture. It is time to overlook the sins of the few, and look for the good that is present in all our fellow people. Past time, I think, to remember we (America) are the best of what the world has to offer. It is time for us to put that to work, to develop the best that is in us, to allow others to develop their best, to push America forward again to our rightful position as the beacon of democracy and freedom.

Freedom, and democracy, are not easy. It takes guts, willpower, and willingness. It’s easy to sit on our couches and moan. It’s harder to reach out and shake hands with a neighbor. But, it can be done. It’s hard, I know, to have discussions about uncomfortable subjects. But don’t we owe the founding fathers that discussion? They were willing to die for their freedom; can you and I not at the least open lines of communication with our neighbors?

It’s July 4^th! Let Freedom Ring!

As always, your comments and thoughts are welcome.

RM “Bob” Hartman