Really, it's not that hard. If you have to pay an administrator total compensation of $100,000 to $150,000 a year (salary, medical, benefits, pension, etc.) to administer a license that brings in $100, and they process an average of five licenses per day for 250 working days, there's no meaningful profit there. Once you add the expense of their office space, computers, furniture and equipment, it's a money loser. If the volume of license applications is higher, it's probably also in a more urban area where salaries, benefits, and expenses are also higher. The only way to justify the expense of collecting small fees is with extreme volume (toll booths), or total automation. Automation itself has expenses for a bureaucracy. The contractors that supply the automation and the administrators that oversee the system could end up being more expensive than the clerks that do the process manually. So again, unless the number of applicants or the per-applicant fee is high enough, it won't pay off. Another way to cut costs would be to lower the administrative standard, such as with fishing licenses or duck stamps. But if you can get a CCW license out of a box of Cracker-Jack, nobody is going to see that as any kind of due diligence in pursuit of the most compelling stated objective of licensing, to ensure safety.
Where licensing can be a more substantial revenue stream is through prosecuting violations. For every guy that doesn't pay his permit tax and gets busted, there could easily be $10,000 or more in fines and court fees and a few thousand more for the local lawyers or public defenders either from the defendant or from the state. For a local agency, booking an inmate for just twenty-four hours and one minute could net them thousands of dollars more from the state budget. So if you take away the permit cards, not only is the revenue from the clerk's office lost, but also from enforcement operations. Even though it may be a net loss for the government, it can be a money-maker for the local agencies as they get more money from the state that will ultimately have to come from some other revenue stream.
Our state would squander the money away anyhow.
