Regional News

New Wash. liquor privatization initiative filed

By Associated Press
Mar 21, 2011

Backers of a proposal to break the state's monopoly on booze sales have returned, filing an initiative Friday to privatize the sales of liquor in Washington state.

The filing comes four months after Washington voters rejected two ballot initiatives to privatize liquor sales with 53 percent and 65 percent of the votes. Opponents of last year's initiative argued that the state would lose tax revenue and jobs, and access to liquor for minors would increase in private stores.

But conservative blogger Stefan Sharkansky says his new initiative would maintain tax revenue and impose tighter control on private liquor sales. He helped write last year's Initiative 1100, one of last year's failed measures.

"(This initiative) will focus the Liquor Control Board on controlling the negative aspects of liquor consumption instead of promoting the product," Sharkansky said.

Sharkansky's proposal would only allow stores with a 5-year record of no public safety violations to sell liquor, seeking to allay last year's fears of minors gaining easier access to alcohol. Sharkansky's initiative also calls for private retailers to keep collecting sales tax at the current level. The existing markup and sales tax would be converted to a "clearly defined and transparent tax" and still benefit the state, he said.

The measure would provide for "wider availability under very controlled criteria," he added.

The initiative calls the state to auction off the rights to operate state-run liquor stores. The state would also sell any assets leftover after shutting down the system of state liquor stores and the state distribution center. The same clean-record requirements for selling liquor at private stores would apply to people buying the operating rights for state liquor store franchises.

And with the one-time sale of assets and the ongoing sale of licenses to private retailers, he said, the state will have more revenue to spend on enforcement and prevention programs.

In 2010, Washington received $370 million from taxes and markups on all liquor sales, which goes toward public service programs, the state general fund, cities and counties, according to a Washington Liquor Control Board report.

To make the fall ballot, initiatives must garner at least 241,153 valid Washington signatures by July 8.

Sharkansky's initiative isn't the only idea floating around liquor sales in Olympia.

Another proposal aims at getting the private sector involved in the state liquor business by establishing a competitive bidding process where the state partners with a private company that would handle the distribution side of the liquor business, said Sandeep Kaushik, a representative for Tom Luce, a Tacoma business consultant who proposed the idea.

The winning company would make a substantial payment to the state up-front -- to the tune of $300 million -- and then annual payments and profit-sharing after that, Kaushik said.

After Thursday's revenue forecast showed the state deficit to be $780 million greater than previously thought, Luce's idea may get more attention.

"I think this is an attractive idea in its own right, but particularly given the state's serious budget situation, we think that our approach is going to have appeal, not just with legislators but with the public as well," Kaushik said.

Based on results from a similar system in Maine, privately run distribution would mean better service and selection for consumers and retailers, he said.

Kaushik, who also worked on the campaign against the two failed privatization initiatives last year, declined to comment on the new measure because he had not read the details.

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