Spokane7
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November 1, 2011 in City
The battle over booze
Truth and rhetoric don’t always track in campaigns on liquor privatization
The multimillion- dollar fight over state-run liquor sales is flooding the airwaves and stuffing mailboxes across the state as both sides in the Initiative 1183 debate try to empty their deep pockets.
The fight started months ago with dueling police and firefighters who love or hate the ballot measure. It grew into an argument over whether mini-marts would become magnets for teen drinkers and recently added a dispute over who’s trying to subvert democracy by “buying” the election.
Considering the campaigns have already broken records for contributions for and against an initiative, the last seems a bit like pots and kettles arguing over their respective blackness.
Here’s a look at some of the campaign rhetoric:
More stores selling liquor
There will be more, but exactly how many more is unclear. The Office of Financial Management’s fiscal analysis estimates the current number of stores will grow about fourfold, from 328 to 1,428. The agency arrived at that figure after studying other jurisdictions that have ended government monopolies on liquor sales and considering the number of retailers like Costco and supermarkets in the state, plus the number of “contract” liquor stores in small communities.
Opponents claim it will grow much more, and have a map that suggests almost every mini-mart in the state could sell liquor. That’s a huge stretch because the State Liquor Control Board, which would be in charge of issuing licenses to retailers, would have to determine there’s no other store in their “trade area” selling liquor.
Supporters say the initiative exempts mini-marts, but it doesn’t specifically do that. It says a store must have at least 10,000 square feet, but if there’s no store that big in a trade area that has a license, the Liquor Board could issue a license to a smaller store.
More sales to minors
Campaign images of teens buying liquor in a mini-mart and hopping into a waiting car may have helped kill two liquor initiatives last year. Opponents have tried to capture that again by noting the exemption for smaller stores and suggesting they’re the most likely to sell to underage drinkers.
This is a problem on two counts. First, many convenience stores already sell beer and wine, so those types of illegal sales are already possible. Second, if a mini-mart does obtain a license to sell liquor, employees would have to undergo new, more rigorous training, just like the big stores.
Lower or higher liquor prices?
In some campaign literature, supporters contend ending the state monopoly on wholesale and retail liquor sales will lower liquor prices. That could happen through competition, but is not mandated by the initiative. It also means that large chain stores could undercut individual retailers.
Opponents contend consumers will be hit with a new 27 percent tax on liquor, which is true, but ignores some of the mechanics of the new system the initiative would set up. I-1183 removes the current state markup on liquor, replacing that cost to consumers with a series of new taxes, both for wholesalers and retailers – and most taxes are ultimately passed to consumers. It also requires fees for wholesale and retail licenses.
The bottom line is that consumers might not see much difference at the checkout stand, at least initially.
More money for schools and public safety
Because of the higher taxes and fees, supporters say there will be more money for schools, health care and public safety. It’s a claim that seems to run counter to their other selling point of lower prices, but it is backed, in large part, by a state study.
The state could collect an estimated $216 million to $253 million extra in taxes over six years and local governments could receive between $186 million and $227 million more over that period, OFM estimates after making a string of assumptions. “There is a wide range of fiscal impacts,” the analysis notes, although it doesn’t come up with any scenario where the state and local governments are net losers.
The initiative does not designate a split for schools, health care or public safety, although education is the biggest expense for the state and public safety is typically the largest item in city and county budgets. Most of the money goes first into the state general fund, OFM notes, “which may be used for any governmental purpose, as appropriated by the Legislature.”
Buying the election
Each side accuses the other of some version of this, but ignores their own actions. Campaign contributions already total $22.7 million for the yes campaign and almost $12 million for the no campaign. Those are records for the most money spent to pass an initiative, most spent to defeat an initiative, most amount raised by both sides in an initiative campaign. Costco’s $8.9 million contribution on Oct. 17 to the yes campaign was the largest single contribution.
Supermajority for taxes unconstitutional, judge rules 
carlmcconnell on November 01 at 6:48 a.m.
Thanks for the information. Two questions I have are, 1 does the state make more or less total money if the initiative passes and 2. what impact does closing liquor stores have on unemployment in the state.
SpokaneLiberal on November 01 at 6:52 a.m.
Carl
Analysis indicates that once you subtract the cost of state liquor store employees that the new system will increase state revenue, and substantially increase local revenue.
As to unemployment, it will likely not make much of a difference, as state liquor store employees will be traded for Bevmo employees, but those jobs are generally not as good as state jobs (medical, retirement).
PassinThru on November 01 at 7:16 a.m.
I’ve never heard of Bevmo, so I looked up their website. I’m wondering… would they be one of those “big liquor wholesalers” that’s helping finance the No side?
usmctpdog on November 01 at 7:57 a.m.
Only a few other states have state run alcohol stores.
The other 46 states have figured it out, why can’t we? An argument can me made that states should not be both prosecuting liquor use and selling liquor at the same time.
* The cost of alcohol is dramatically driven down by to consumers as seen in other states like CA and Oregon etc where Costco and Bevco operate which I have personally witnessed.
The state will make more money for the things that state needs taxes for. People need to stop voting against themselves economically through simple fear tactics used by the opposition.
DickAdams on November 01 at 8:11 a.m.
How dare our state to allow the liars saying that mini-marts shall be selling booze. I guess with people like Governor Gregoire calling the shots and looking the other way rather than explaining why these liars continue to broadcast that mini-marts will be selling liquor is to protect their government jobs instead of reducing the number of state employees.
johnclarke on November 01 at 8:40 a.m.
Voted yes.
fishinjay on November 01 at 9:22 a.m.
Here are some interesting statistics from the National Highway Transportation Safety Board involving the percentage of motor vehicle fatalities involving alcohol impairment (greater than .08% BAC).
Of motor vehicle fatalities in Washington, 35% involved alcohol impairment. In other states I’ve lived in that do not have state run liqour stores the numbers are: 30% in California, 32% in Tennessee and 28% in Arizona. The national average is 32%.
It seems clear to me that a state monopoly on liqour sales has absolutely nothing to do with public safety.
IHike4Fun on November 01 at 9:24 a.m.
Voted no.
wobble506 on November 01 at 9:25 a.m.
DarnIt Fishinjay, - are you trying to confuse this with real, solid facts? The unions are going to come get you for speaking against their cushy jobs and tax payer paid benies and retirements.
fishinjay on November 01 at 9:41 a.m.
I just realized I was looking at an old report, but the numbers still make the same point. In fact, Washington’s numbers increased in the most recent report.The most recent “finalized” numbers are from 2009. Alcohol impaired fatalities: WA - 42%, CA - 31%, TN - 31%, AZ - 27%.
Here’s the link to the report if you’re interested. The state by state numbers start on page 166. http://www-nrd.nhtsa.dot.gov/Pubs/811402.pdf
Byrdie714 on November 01 at 10:55 a.m.
Voted yes.
monarch on November 01 at 11:31 a.m.
Thanks for the article Jim, I’d be interested in knowing who are the main contributers to the “No” effort.
Thoreau on November 01 at 11:55 a.m.
This entire campaign has been rife with false correlations, alarmist assumptions, and arbitrary persuasive techniques.
It seems to me that the status quo is trying to persuade anyone considering voting for deregulation NOT to, just to spite Costco.
Who the hell cares how much Costco paid for their side?
I suggest Washingtonians vote on the following basis:
Do you want to buy booze somewhere else besides the few elite government stores?
If so, vote YES.
If not, vote NO.
….and that endorsement is gratis.
Traveler on November 01 at 12:41 p.m.
I don’t think I’ve ever heard the phrase “elite government” before. I thought that adjective was limited to whichever RIchie Rich (Sorry, Richie JobCreator) or college-educated type the speaker happens to disagree with at the time.
But Thoreau, don’t you care that you’ll instead be buying your booze from elite big-box stores instead? No room for a mom-and-pop liquor store under I-1183 — a law of, by and for warehouse retailers.
And frankly, I’m taxed enough already for my booze. When supporters tout the extra hundreds of millions in revenue to tthe state, where do you think that money’s gonna come from?
The_Seer on November 01 at 12:55 p.m.
Voted “no” and encourage others to do the same.
There is absolutely no proof that state revenues will increase. In fact, they will decrease. The state makes all of the money off liquor sales now, how would they make more money when they’ll collect less in taxes and none of the profits? Each time a state has privatized liquor sales there has been no marked increase in consumption, which is the only way the state will make more money. The operating costs of the stores don’t cost the taxpayer a dime. The only people they impact are the ones who buy liquor. This initiative won’t create a single job and in fact, will lead to less employment in the state.
LostInWyoming on November 01 at 1:09 p.m.
Not only should the state run the stores,but they should run the bars too! And your local news papers,Tv and internet news sites. (sarcasm)
zelda on November 01 at 1:17 p.m.
The deliberate vagueness of this bill bothers me. Specifically, “…a store must have at least 10,000 square feet, but if there’s no store that big in a trade area that has a license, the Liquor Board could issue a license to a smaller store.”
What is a “trade area” and how big is a trade area?
How many trade areas are there in Spokane County and who determines the definition of trade area anyhow?
I know all these blue laws are hangovers (no pun intended) from the days of Prohibition, but this initiative is clearly a battle between corporate interests.
When people present statistics, what I’d like to know is what Spokane County and E. Washington’s numbers are on percentage of highway fatalities that are attributed to alcohol. Seems like we have an awful lot of drunk-driving around here. Looking at statewide #s doesn’t provide an adequate picture of how this might affect the Spokane area.
david on November 01 at 1:26 p.m.
if the initiative passes you will note the following changes: no more special ordering, Costco and the other supermarkets don’t want to do it. No more minitures or pints, too easy to steal. Reduction in choice, I am a snowbird in Arizona. I have also been to California, not much selection. As a retired liquor enforcement officer I anticipate an increase in minors getting hard liquor. one final thing, the unemployment rate will go up as you put your fellow tax payers out on the street. And as for being a cushy job 506, those employees work darn hard.
zelda on November 01 at 1:29 p.m.
I found this on the PI —
>>[The initiave] does not specifically define what a trade area is, leaving that to the liquor board or the courts to ultimately decide. Opponents have created their own definition — one mile in urban areas and five miles in rural areas — to estimate that it could allow some 1,000 retail outlets to get exemptions.
>>Gilliam said he expects the exemptions will be much more narrow, arguing that trade areas for some stores reach 40 miles.
http://www.seattlepi.com/news/article/Costco-refines-pitch-on-Wash-liquor-privatization-2221276.php#ixzz1cUFuGiUk
Seems to me that the make-up of the liquor board and courts, will determine how this is expanded if the initiative passes. They could re-define “trade area” down to one mile if they’re so inclined. Seems to me that Costco lobbyists and attorneys will be working hard to write the rules defining a trade area as 40 miles while the association of mini-mart owners will argue the other way (1 mile).
neanders on November 01 at 2:15 p.m.
For me, it all comes down to one question: What essential services do you want your government to provide? I don’t consider alcohol sales to be an essential service, so I don’t want the govt involved. The State Office of Financial Management projects that getting out of the liquor business will have a positive effect on state revenue, perhaps we can use some of that money to cover the cuts that Gov. Gregoire has proposed? I don’t know, I just know that if the state can’t pay for the roads or education or so many other things that are more important, why are they in the business of selling booze?
zelda on November 01 at 2:33 p.m.
The amount of money the state would get from privitizing liquor stores is miniscule given the state’s economic condition. But in this financial mess, the only sure-fire revenue generator is what used to be quaintly called “vice.” It will be interesting to see, the longer the economic decline lasts, how special interests might bend when it comes to legalizing marijuana and even prostitution. We’ve already seen the PR transformation of gambling into “gaming,” so you can’t rule out a high degree of “individual liberties” candidates coming to the fore financed by certain interests. The amount of money to be made in legalizing MJ is absolutely staggering.
You’re correct, @neanders, these controversies come down to what people consider to be the proper and fundamental obligations of a government to its citizens. That’s what it’s all about and it varies from era to era.
Traveler on November 01 at 2:43 p.m.
neander, I guess we just see it from a different perspective. Where you see “alcohol sales” as being no business of the government, I see “alcohol sales control” as being vital.
And I don’t see the connection between budget constraints’ effect on roads and education and the need for better control of sales of an intoxicating, proven deadly substance.
Hiker on November 01 at 2:51 p.m.
I voted yes.
Prediction: The initiative won’t pass. A slim majority will approve it in King County. Most Eastern Washington counties will vote against it.
Everyone will then spend the next year complaining that the state should get out of the liquor business.
neanders on November 01 at 3:21 p.m.
I guess I don’t see how hard liquor is any different than beer/wine. And I think there’s a difference between alcohol sales and alcohol sales control. The government doesn’t sell guns or ammunition, but controls those sales. I would submit that the ability to control the sale of something doesn’t require the actual sale of it. Just my $.02… Neil
Thoreau on November 01 at 3:34 p.m.
56traveler:
College educated - yes.
Sarcasm used - yes.
Why can’t “elite” be used to refer to WA State liquor stores?
elite= the choice, best, or most powerful members of a group, class, etc.
So, I think the State holds a good amount of power in that they are the sole providers of spirits here.
I’m disappointed that someone who would use the Floyd Dark Side image would condone unnecessary government intervention. As I said before, this campaign has shifted from the issue of gov’t controlled booze, to “Stop the big box stores!”
You might as well use that stance in the numerous other elections and initiatives at all levels. Would it be equally unsatisfactory if MADD matched or “outbidded” to support the “Vote No” stance?
Traveler on November 01 at 3:37 p.m.
neanders, you’re right about the beer/wine. You and my wife have raised the same point. When I lived in Oklahoma for a couple of years, the state-run liquor stores sold beer/wine, too — at room temperature, which I personally thought was a great idea (even though, I know, if you really gotta drink a beer, you won’t care if it’s “ice cold” or not).
As a teen, lo those many years ago, I was always able to find a liquor store that would sell me and my cohorts whatever we needed. But that’s not my only objection. I’ve always thought this nation has too lax a policy regarding alcohol sales and use — the concept of bars, where you can buy and use an intoxicating substance and then get in your car and drive off, goes against any rational civic policy, but they’re everywhere. How can increasing the number of outlets where hard liquor can be sold have anything but a deletorious effect on our state? And state-run stores have no profit motive, no price wars, etc.
Traveler on November 01 at 4:31 p.m.
Thoreau:
I use the Pink Floyd album cover ‘cause to me it’s really a picture of the tri-part universe (hint: I’m in among the blues somewhere). As for my philosophy, I probably got more of that from the Grateful Dead. But even with their laissez-faire attitude, I still prefer fewer, more discreet liquor outlets — just as I would for dispensaries of marijuana (which started popping up EVERYWHERE).
And as for I-1183 funding, go ahead and follow the money. At least MADD isn’t driven solely by its own financial interests. You can’t say the same thing about Costco.
DickAdams on November 01 at 4:41 p.m.
The SPD has a reputation of LE officers imbibing in the grape even to the degree, DUIs by the boys in blue is higher than most cities. It just may be, that`s the reason, if you haven`t noticed, drunks are not charged with a DUI but have the charge changed to something other than drunk driving by our judges. Heck, one judges law firm specializes in DUI arrests. I`ve always wondered how many people are given a verbal warning, like, don`t drive under the influence and be careful driving home and not issuing a citation by the Spokane police. The citizens of Spokane surely are witness to the number of cops drinking and driving. My observation when I first migrated to Spokane, was the number of alcoholic judges sitting on the bench. One judge was caught driving the wrong way on the free way for gosh sake. Seems to me Olympia makes no attempt to strengthen the DUI laws like some of the other states do, where Washington IMO, contributes to lax enforcement. Just sayin.
zelda on November 01 at 8:06 p.m.
Just saw this in the Seattle Times. So we’re going to have to go thru all the rigamarole again if this MJ initiative goes on the ballot next year —
>>Initiative 502, would legalize up to an ounce of dried marijuana; 1 pound of marijuana-infused product in solid form, such as brownies; or 72 ounces of marijuana-infused liquids. People over 21 could buy marijuana at state-licensed stores.<<
If it’s approved, then we can have another ballot measure demanding that the state get out of the MJ-licensed-store business, a measure funded by Costco, which would want to corner the market on MJ, much to the anger of the independent pot-growers’ co-ops. Then we’ll get to argue about proximity of weed stores to schools and whether tribal stores can sell pot without a Federal tax stamp. We’ll have MJ brownie stores competing with cupcakeries as the new entrepreneurial fad leading to the inevitable cable shows, “Brownie Wars” and “Iron Toker.”
CougarGold on November 01 at 8:31 p.m.
Repost from a previous story:
While I would normally tend to support privatization of certain services that the private sector can provide, I am against this initiative. Two reasons: First, I don’t favor ‘people’s initiatives’ and prefer representative government. Second, as noted below, when people’s initiatives are improperly written, there are unintended consequences (actually intended, in this case) that lead to unlevel results.
Costco is spending all the money in support of this initiative with specific market purposes behind their writing and support. I would prefer to see the legislature deal with this (although they won’t, hence the initiative *sigh*) and come to a resolution that’s more fair for all sellers.
Smaller grocery stores and chains plus independent distributors are harmed by the distributor tax that’s imposed by this initiative. Costco, Walmart and other big box retailers gain a huge advantage as they self-distribute and avoid the 10% distribution tax. That point causes great harm to the smaller retailers (Rosauers for example) and causes an unlevel playing field. I don’t think that’s a good approach to true privatization as the initiative weights the winners and losers by statutory mandate. Here is the policy statement from the Washington Food Industry Association:
http://www.wa-food-ind.org/images/I-1183_2011_Liquor_Privatization_Position_Statement.pdf
There’s a reason Costco wrote this initiative and is spending all the money on support. They’ve written it in such a way as to move competitive favor their direction. They stand to capture a lot of market share and not just in liquor sales. You go to Costco to buy cheaper liquor and pick up the groceries while you’re there. Buying habits change and the smalls get wiped out.
If you’re a supporter of big-box and don’t feel ‘buying local’ is important, then by all means support I-1183. However, at least recognize who and what’s behind it and the potential results. It’s not true free-market competition and for that reason, I oppose this lopsided initiative.
philipgregory on November 02 at 8:45 a.m.
The state is already promoting gambling addiction.
Let’s not allow them to encourage alcohol addiction, too.
Hard liquor is definately more of a problem to addicts than beer and wine.
Keep things as they are.