SALT LAKE CITY – Nestled in Governor Spencer Cox’s proposed budget of $ 21.7 billion released earlier this week is $ 33.1 million to fund the construction and operation of four new state liquor stores, breaking a precedent in which liquor stores were funded by revenue bonds from rental.
The change will apply to two previously approved Salt Lake City liquor stores in downtown and the Foothill neighborhood, as well as new recommended stores at Sandy and Sugar House. The budget document explains that the changes are intended to “maintain structural balance in the future”.
“In addition to general bonds and cash-funded projects, the state has traditionally issued rental income bonds for capital development projects, such as state liquor stores,” it says. he. Rental income obligations are loans repaid with, in this case, liquor store sales.
“These liquor stores are often approved without all bail and operating costs being funded in advance by the legislature,” the budget continued, recommending that when future liquor stores are approved, ” the legislature also appropriates the debt service, respective operation and maintenance, and staff financing costs when approving the project. … Considering the amount of one-time revenues, the Governor recommends to self-finance these buildings (a total of $ 33.1 million) and to require the Department of Alcohol Control to reimburse the state with its revenues from the sale of alcohol.
In other words, the money will always be repaid, but to the state rather than to a lender. The state will then deposit this money “into a new state facility renovation and development fund to further support the use of space and general state planning efforts on an ongoing basis.”
“At the moment, we think it makes perfect sense to fund projects in cash while the state has the capacity to do so,” said Miranda Jones, spokesperson for the Office of Management and Budget. of the governor. “Really, for any infrastructure project, when there is the ability to pay cash rather than commit to a financial obligation where we have to pay debt service for years, the preference, almost always, is to cash in funds.
“The idea is that the state itself would act as a lender, as opposed to the market acting as a lender,” Jones said.
In August 2020, Sal Petilos, then director of the DABC told a legislative committee he expects the Sandy, Sugar House, and Foothill stores to open in 2022, and the downtown store in 2023.