• TABC’s Legislative Appropriations Request (LAR) for the 2020-2021 biennium

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    Every two years, all state agencies must develop a Legislative Appropriations Request (LAR) in preparation for the budgeting process for the upcoming Texas Legislative Session. This August, the Texas Alcoholic Beverage Commission (TABC) submitted its LAR to the Governor and the Legislature.

    This request is important to the alcoholic beverage industry because it begins the conversation at the Capitol on how the agency will function over the next two years. TABC’s LAR was not developed in a vacuum. The agency conducted a top-to-bottom review of itself and listened to industry stakeholders from across Texas to determine TABC’s needs.

    TABC’s LAR begins by asking, just as every agency does, that the Legislature continue its base general revenue funding – which is $96 million over the next two years (the biennium). The LAR also asks that six exceptional (additional) items in the amount of $28 million be funded on top of TABC’s base funding. These items are intended to bring the TABC into the 21st century by operating more efficiently, more securely, and by better protecting law abiding businesses and the public.

    Three of the exceptional items are intended to drastically overhaul and improve TABC’s regulatory and public safety technology and enhance its cybersecurity posture for a cost of $14 million. Another item asks that TABC be granted 64 additional law enforcement personnel to serve in areas that pose significant public safety risks for a cost of $12 million. And the final two exceptional items seek $924,000 to more rapidly replace TABC’s aging vehicle fleet, and $300,964 so that TABC can transition to the Centralized Accounting and Payroll/Personnel System (CAPPS), as required by the Comptroller of Public Accounts.

    The technology request will enable TABC to replace 15-year-old legacy systems and avoid situations like the one encountered in early 2018, which nearly required the agency to refuse credit card payments due to outdated technology. This would have disrupted many industry members. This request will also enable the industry to submit all applications, reports, and payments online, ending the need to drive several miles to a TABC office to physically submit a paper document. Further, this will end duplicative administrative tasks at TABC and in turn allow agency staff to focus on their core mission and more quickly process industry requests and deal with industry bad actors who thwart the law to the detriment of legitimate business operators. Finally, the cybersecurity element of this request will allow TABC to implement appropriate security protocols to protect the personally sensitive information that industry is required to submit to the agency along with law enforcement sensitive information. All three of these items will ultimately help people get into business faster, ensure everyone is dealing fairly, and protect the sensitive data that industry entrusts to the agency.

    TABC’s request for additional law enforcement personnel will restore the agency’s law enforcement staffing levels to a number not seen since 2008. Since that year, TABC’s law enforcement agents have been reduced by almost 25% due to budget cuts and personnel reassignments in order to address the growing licensing demand. At the same time, the alcoholic beverage industry in Texas has grown by 26% to more than 53,000 active licensed locations. These agents are tasked with detecting and deterring public safety violations, in particular selling to minors, selling to intoxicated persons, drugs, after hours, breaches of the peace (assaults), and human trafficking. TABC’s Special Investigations Unit has investigators tasked with ending organized criminal activity at licensed locations, including narcotics trafficking, human trafficking, and money laundering. In fact, since 2013, TABC has closed more than 100 businesses with ties to organized crime. While this request doesn’t seek to keep up with the industry growth since 2008, it will enable TABC to better hold the line against ruthless criminal organizations, thereby protecting both the public and legitimate business operators in Texas.

    TABC is in a unique position to realize these requested improvements. TABC, unlike many other agencies, generates all of its revenue directly from the statutory fees and surcharges that the alcoholic beverage industry pays to the agency. What’s even more unique is that the industry pays $30 million more than what’s actually needed to fund the agency. This overage is returned to the state’s General Revenue Fund every biennium. This amount more than covers the $28 million price tag for the exceptional items TABC is requesting during the upcoming legislative session.

    TABC is confident this proposed budget will ensure its ability perform its core mission of helping businesses by providing more prompt and effective service and upholding public safety by effectively enforcing the law against the small percentage of bad actors who negatively impact the entire industry. TABC looks to continue engaging with industry members to identify ways to improve the agency and continue supporting the growth of this $40 billion industry.

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