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Spokane, Washington  Est. May 19, 1883

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Editorial: Privatized liquor sales an idea worth considering

Sen. Tim Sheldon has been introducing bills to privatize liquor sales in Washington since 1998. Last week, for the first time, the Potlatch Democrat’s proposal received a committee hearing.

That progress comes at a time when at least two of the other 17 states that now hold a monopoly on liquor sales are considering a similar change. Both Virginia and North Carolina are looking at turning the business over to the marketplace.

More relevant to Washington’s situation, Sheldon’s proposal to phase in privatization by July 2012 comes on the heels of a detailed study by the state auditor’s office that identifies and compares five options for releasing the state’s control over the liquor business. The report projects a range of fiscal outcomes from such a move, but only one variation results in an anticipated loss.

Larisa Benson, who heads up performance audits for Auditor Brian Sonntag’s office, noted in testimony before a legislative committee that projections would vary if different assumptions were made. Still, the report foresees a boost in state revenue as high as $316 million over a five-year period, depending on how privatization is structured.

As the state struggles to emerge from a damaging recession, this is a perfect time to be looking for governmental activities that are not really essential government services – like retail and wholesale marketing. Taxpayers need to know that the state is operating as efficiently as possible.

Privatization won’t be easy. The governor’s office and the Liquor Control Board have expressed misgivings. State employees can be counted on to oppose Sheldon’s measure or any proposal to join 32 other states and get out of the liquor business. Many of the 155 private operators who now run “contract” stores (as opposed to the 160 state-owned and operated stores), will object to a change.

Predictably, some citizens will be anxious about turning liquor sales over to private businesses for fear that the profit motive will encourage alcohol abuse.

That’s a legitimate concern, and indeed the auditor’s office reports that consumption tends to be higher in full-privatization states.

Those are issues for the Legislature to study along with the fiscal implications. But 32 other states have decided at some point that the responsibilities of government do not include the direct retail and wholesale trade in liquor.

The idea of turning the liquor business over to the private sector has been around for years – and snubbed for years. The need to streamline government is compelling, however, and the Legislature has a duty to give it serious consideration now.

Realistically, a 60-day legislative session dominated by a staggering budgetary crisis is not conducive to a step of this magnitude. But if legislation can’t be enacted this year, it should be made a priority topic for interim study between now and the 2011 session.