Redbook LBO Analysis of Executive Budget Proposal — Liquor Control Commission (Ohio, February 2025)
Summary
A Redbook LBO Analysis of Executive Budget Proposal for the Liquor Control Commission, by Terry Steele, Senior Budget Analyst, dated February 2025. The quick look says the Commission consists of three members appointed by the Governor and six full-time staff, and is a quasi-judicial body that hears administrative cases against permit holders for alleged violations of Ohio's liquor laws. It says the executive recommended budget is $1,177,114 in FY 2026 and $1,241,735 in FY 2027. The Commission is funded through a portion of liquor permit fee revenue collected by the state.
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“Redbook LBO Analysis of Executive Budget Proposal — Liquor Control Commission (Ohio, February 2025).”
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Redbook
LBO Analysis of Executive Budget Proposal
Liquor Control Commission
Terry Steele, Senior Budget Analyst
February 2025
TABLE OF CONTENTS
Quick look... .......................................................................................................................... 1
Agency overview ................................................................................................................... 1
Analysis of FY 2026-FY 2027 budget proposal ......................................................................... 1
Liquor permit revenue distributions ............................................................................................... 2
Enforcement statistics and adjudications ....................................................................................... 3
Adjudication hearings ................................................................................................................. 3
Forfeitures .................................................................................................................................. 4
LBO Redbook
Liquor Control Commission
Quick look...
The Liquor Control Commission consists of three members appointed by the Governor and six
full-time staff.
The Commission is a quasi-judicial body that hears administrative cases against permit holders for
alleged violations of Ohio’s liquor laws and certain other matters related to these businesses.
• Typically hears over 2,000 cases annually.
• Approximately $1.8 million in fine revenue transferred to the GRF over the FY 2023-FY 2024
period.
The Commission is funded through a portion of liquor permit fee revenue collected by the state.
FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027
Actual Actual Actual Estimate Introduced Introduced
Fund 5LP0 ALI 970601, Commission Operating Expenses
$1,000,890 $999,955 $1,042,399 $1,225,800 $1,177,114 $1,241,735
% change -0.1% 4.2% 17.6% -4.0% 5.5%
Agency overview
The Liquor Control Commission (LCO) is the rulemaking and adjudication agency that
oversees the alcohol beverage industry in Ohio and ensures compliance with Ohio’s liquor laws and
regulations. LCO works with the Department of Commerce’s Division of Liquor Control, which issues
liquor permits, as well as the Attorney General and Department of Public Safety, which are involved
with investigating and enforcing liquor violations. LCO’s responsibilities include (1) making and
interpreting rules regarding liquor production, sales, and advertising, (2) hearing cases regarding
alleged liquor permit violations, (3) hearing appeals of the Division of Liquor Control decisions on
liquor permit renewals and distribution, and (4) hearing appeals of liquor permit revocations and
nonrenewals based on tax delinquencies. The Commission consists of three members appointed by
the Governor for six-year terms and who, unlike many appointed boards and commissions, are paid
a salary. They are supported by six full-time employees, including the Executive Director.
Analysis of FY 2026-FY 2027 budget proposal
The executive recommended budget for LCO is $1,177,114 in FY 2026 and $1,241,735 in
FY 2027. Chart 1 below shows that, over the FY 2026-FY 2027 biennium, slightly less than
$2.0 million (81.2%) of the executive budget is for personal services, including commissioner salaries
which are fixed by the Governor’s Office. After payroll, just over $400,000 (16.5%) of the budget
goes toward supplies and maintenance. The remaining amount of approximately $54,000 (2.2%) is
for purchased personal services, including costs for court-reporting services and transcripts, writs
Legislative Budget Office of the Legislative Service Commission Page 1
Redbook Liquor Control Commission
served, and witness reimbursements that tend to fluctuate from year to year depending on
Commission caseload.
Chart 1: LCO Budget by Expense Category
FY 2026-FY 2027 Biennium
Purchased
Personal Services
Personal Services 2.2%
81.2% Biennial total:
$2.4 million
Supplies and
Maintenance
16.5%
In FY 2021, the Commission took over the docketing of cases from the Attorney General’s
Office. LCO began the process of implementing this new system during the FY 2024-FY 2025
biennium. The proposed budget provides continuing funding for the development and
implementation of the case management system to accommodate changes in case hearing
processes, with the goal of streamlining case dispositions. The recommended funding also includes
funding for training, data conversion, and the $7,200 annual system license fee. LCO just recently
began using the new system internally for appeals and tax cases, and is working with partner
agencies for the development and implementation of the system for use in citation cases.
Liquor permit revenue distributions
LCO’s operating expenses are paid from the State Liquor Regulatory Fund (Fund 5LP0), which
receives a portion of liquor permit fee revenue deposited into the Undivided Liquor Permit Fund
(Fund 7066). Overall, $42.9 million in permit fees were collected in FY 2023. That figure increased
to $44.7 million in FY 2024. The table below shows the distribution of permit revenues collected by
Fund 7066. Note that permit fee revenues may not be distributed in the same fiscal year in which
they are collected.
From Fund 7066, 45% of the revenue is distributed to Fund 5LP0 for use by the Department
of Commerce’s Division of Liquor Control and the Liquor Control Commission. Of the portion
deposited into Fund 5LP0, transfers totaled nearly $5,700 during FY 2023 and FY 2024. Of the
remaining permit revenue deposited into Fund 7066, 35% goes to municipalities and townships and
20% goes to the Department of Behavioral Health (MHA).
Legislative Budget Office of the Legislative Service Commission Page 2
Redbook Liquor Control Commission
Liquor Permit Distributions from the Undivided Liquor Permit Fund to Receiving Entities
Entity FY 2023 FY 2024
State Liquor Regulatory Fund (Fund 5LP0) $14,811,880 $30,369,557
Municipalities and Townships $18,166,775 $13,366,315
Statewide Treatment and Prevention Fund (Fund 4750) $6,582,469 $14,608,596
Total $39,521,164 $58,344,468
Enforcement statistics and adjudications
Adjudication hearings
Although the Commission’s goal is to issue decisions within 45 days after the hearing date,
the Commission issues the vast majority of its decisions within two weeks. LCO hears both “citation”
and “noncitation” cases. Citation cases concern dissolute behavior such as illegal gambling, selling
drugs, underage drinking, and other sorts of prohibited activity at permit establishments.
Noncitation cases deal with tax payment deficiencies, overdue or unpaid workers’ compensation
premiums, and unemployment compensation delinquencies among permit holders.
As Chart 2 below shows, the number of cases returned to, and has exceeded, the
pre-pandemic norm of about 2,000. The liquor license renewal deadline that was extended during
COVID-19 caused a corresponding increase in liquor permit cancelation notices during FY 2022, as
many permit holders failed to renew once the extension ended. The result was an increase in
appeals of those cancelations, as can be seen by the number of “Other” cases in FY 2022. As
establishments reopened and renewed liquor licenses after the pandemic-related lag, the
corresponding number of citation cases rose to pre-pandemic levels. This normalization, coupled
with LCO’s attempts to set cases more quickly, resulted in the increase in caseload seen in FY 2023-
FY 2024. Case activity for the past five fiscal years is shown in Chart 2 below.
Chart 2: Cases Heard by Type, FY 2020-FY 2024
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Citation Cases 724 588 756 1,556 1,673
Other Cases 569 331 1,202 770 805
Legislative Budget Office of the Legislative Service Commission Page 3
Redbook Liquor Control Commission
Forfeitures
The Commission has the authority to revoke licenses or impose cash fines depending on the
circumstances of a case. These fines, referred to as forfeitures, are not retained by the Commission
and are instead deposited into the GRF. Forfeitures collected amounted to approximately $882,500
in FY 2023 and $921,300 in FY 2024. The total amount of forfeitures ordered or collected in any year
depends on the types of cases heard, and also the Commission’s judgment on the frequency and
severity of offenses which are being adjudicated.
LCO/lb
Legislative Budget Office of the Legislative Service Commission Page 4
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