State Liquor Division requests store upgrades, staffing increases and IT security funding

The Idaho State Liquor Division told the Joint Finance-Appropriations Committee on Tuesday that it seeks a mix of one-time and ongoing appropriations to address store improvements, staffing turnover and network modernization.

Budget analyst Kelvin McGurkin of the Legislative Services Office told the committee the division reported $319.1 million in sales and $116.6 million in reported net income for FY2024, and that statutory distributions from the division totaled $118.3 million in FY2024. McGurkin said the agency’s available fund balance fell from $38 million in FY2022 to $14 million in FY2024, a decline the division attributes to higher-margin direct-to-consumer sales during the COVID-19 period that have since been spent down.

The division’s FY2026 requests include $131,400 in ongoing dedicated funds — $57,400 to raise the hourly rate for temporary retail staff from $15.00 to $15.45 and $72,000 to cover shrink-wrap costs associated with a new freight contract — and multiple one-time requests. The one-time items include $1.2 million for replacement items (shelving, lighting, flooring, signage), $980,300 for retail store improvements and motorized equipment and vehicles, $235,000 for IT and security replacement items, $200,000 for 70 firewalls and 70 managed switches to complete a network modernization led by OITS, and $100,000 to upgrade the division website to meet Web Content Accessibility Guidelines.

Division director Andrew Arulinandam said the agency has a filled FTP (full-time position) rate of about 93% and that retail and warehouse staffing turnover remains a concern. Tony Farah, the division’s chief deputy and CFO, told legislators that temporary store clerks are state employees and are not subject to the statewide cost-of-living (CEC) adjustments, meaning pay changes for those positions typically must be requested as a line-item enhancement.

Senators and representatives pressed on whether the requested $100,000 for website accessibility was necessary. Arulinandam said the division consulted experts who identified multiple items that must be corrected to reach full compliance and that noncompliance sometimes leads to legal claims. Committee members also questioned whether incremental increases for temporary staff would materially reduce turnover; the division said prior raises helped reduce turnover from roughly 140% to about 84%.

On technology, McGurkin and the division said the requested firewalls and managed switches would complete a move from older DSL/T1 connections to a cellular-backed solution using routers the agency piloted in FY2024. The agency projects the setup will save about $100,000 in upfront hardware costs and $10,000 monthly compared with a hardwired alternative, and that OITS recommended the purchases.

The division also reported it operates 210 full-time retail positions (out of a 257.25 FTP cap), uses about 185 part-time clerks who are not included in FTP counts, and supplies product to 106 contract liquor stores whose labor is covered by those contractors.

The committee did not take a vote on the requests during the hearing; analysts and the director answered committee questions and the presentation concluded with the division standing ready to return with further detail if requested.