IT Upgrades Funded by LARA Increases

A representative from the Department of Licensing and Regulatory Affairs (LARA) made a statement on Wednesday regarding the proposed licensing fee increases. Many state licensing fees, such as alcohol permits, are increased in the proposal due to a lack of sustainable funds for each respective program. What a LARA representative mentioned is that a portion of these fees are expected to pay for IT upgrades.

In Governor Snyder’s budget proposal for LARA, he established a 50 percent increase in some licenses that would be cut in half after three years. When the Senate Appropriations LARA Subcommittee asked why these legislators will have to address this issue twice, LARA Deputy Director Al Pohl said that once the IT upgrades have been completed, the Department will no longer need the additional funds.

Senator James Marleau (R-Lake Orion) wondered whether LARA would replace COBOL, a computer system the Department and the Liquor Control Commission uses for their respective administration functions. Mr. Pohl expressed that LARA is looking to do just that. According to Commissioner Andy Deloney, the Liquor Control Commission has been working with the Department of Technology, Management, and Budget to create a more efficient system. The Commissioner also commented that if these IT issues are not addressed, the $1.15 billion enterprise will be in jeopardy, as the computer system is necessary in the sale of alcohol.

Scott Ellis, Executive Director of the Michigan Licensed Beverage Association, questioned why the money from the fee increase is being used toward technology. He recognizes the need for upgrades, however in his personal opinion the funds should be deducted from the Liquor Purchase Revolving Fund. In Mr. Ellis’ point of view, the revenue is being generated.

Chairman Marty Knollenberg (R-Troy) had doubts about whether 50 percent was too much or too little for certain licensing. Mr. Deloney explained that they came to 50 percent because the Department looked at the licensing that required the most effort and most revenue and they decided to bump them up a bit. Al Pohl also commented that LARA is determining if that is the case or not, but the answer may be unclear until mid-March or so.

posted by PAA Online , Friday, February 27, 2015 10:32 AM
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