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When you patronize an ABC store, you help fund the state government. Specifically, you are supporting certain departments and funds through a complex allocation process.

Alabama's budget is ailing for many reasons, but this intricate and ostensibly nonsensical allocation of revenues contributes to the state's fiscal challenges. Alabama is infamous for committing 87 percent of its revenues to specific purposes. That figure leads the nation by a long shot.

Alabama's liquor sale and tax revenue provides a good example of the legal inflexibility within Alabama's budget.

Alabama needs its liquor

First, let me explain how the state charges $21.50 for a $10 bottle of liquor in an ABC store (according to the Alcoholic Beverage Control Board):

$10 for the cost of the product

$3.00 for a 30 percent mark-up

$7.28 for a 56 percent liquor tax on the marked-up price

$1.22 for a 6 percent sales tax

Keep in mind that this doesn't mean the same $10 bottle of liquor costs just $10 in another state. Other states have similar mark-ups and taxes.

Those dollars aren't simply thrown into the state's budget. Alabama divides them up by the 56 percent liquor tax, the 6 percent sales tax and the ABC Board's annual profits.

1. The state liquor tax proceeds are split up as such (equaling 56 percent):

23 percent to the State General Fund

16.5 percent to the Department of Human Resources

10 percent to the ABC Board's profits

6.5 percent to the Department of Mental Health

2. The sales tax proceeds are split in three ways (equaling 100 percent):

68 percent to the Alabama Department of Revenue

24 percent to the city where the sale was made

8 percent to the county where the sale was made

3. If you aren't impressed by the complexity yet, see how Alabama divvies up the ABC board's profits. The first $2 million of the ABC Board's profits are split up four ways:

50 percent to the State General Fund

20 percent to cities based on sales

19 percent to the Department of Human Resources

11 percent to wet counties

Then, the next $200,000 in profits is given to cities within wet counties based on population.

Finally, the remainder of the board's profits has several destinations:

But what about beer drinkers?

If you prefer beer, your contributions to the state are much easier to explain and help educate Alabama's children.

The state's $.05 tax per 12 ounces is routed in four directions (according to the Legislative Fiscal Office, p. 33):

$.02 to the Education Trust Fund

$.015 to the State General Fund

$.01 to the Department of Human Resources

$.005 to wet counties

Conclusion

Most of the laws governing these complicated funding streams were passed decades ago. Dedicating certain revenues to certain agencies and funds made these taxes politically palatable, and that's understandable.

Now, however, they restrict the state's budget flexibility. For instance, if the state were to sell a record bottle of liquors in a year, it would be difficult to allocate the surplus revenue to a needed destination in the following fiscal year.

Are you interested in how your tax dollars are split up among state agencies and funds? Which ones would you like to be explained? Do you think it's better this way or would you like our legislators to have more budget flexibility?