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Stick with I-1183’s voter-approved liquor fees

Post by TNT Editorial Board / The News Tribune on May 7, 2012 at 5:45 pm with 5 Comments »
May 7, 2012 5:22 pm

This editorial will appear in Tuesday’s print edition.

Retailers who hope to make money by selling alcohol to Washington residents once the state gets out of liquor sales June 1 now are trying to change the rules of the game that led to privatization.

Initiative 1183, which was approved in November, succeeded where similar privatization efforts failed because of the way it was sold to voters. It reassured them – complete with fatherly testimonials by police and firefighters –  that local public safety would be held harmless if I-1183 passed.

In fact, due to extra fees liquor retailers would pay under provisions of I-1183, local governments would get millions of dollars more than they were getting under state control of liquor. That extra money would help pay the cost of enforcing the effects of liquor sales at so many new outlets across the state.
Critics of I-1183 pointed out the obvious: If more fees were charged and more revenue would be raised, liquor prices would have to increase. Consumers hoping for cheap booze would be disappointed. In fact, the Office of Financial Management noted that the markup under I-1183 could go as high as 72 percent, compared to the 51.9 percent markup under state control.

Don’t worry, supporters countered. Market forces would work to make liquor prices competitive. Liquor store owners could warehouse their own product or form cooperatives to give them buying power to compete against such big players as supermarket chains, discount liquor giants and Costco – which heavily bankrolled I-1183.

Now the small retailers are figuring out that the initiative was weighted in favor of volume sellers, particularly ones like Costco that could sell their own brands.

Those who bid on former state-run stores and those operating existing contract stores now say that in order for them to be viable, they need the Legislature to remove or at least delay the 17 percent fee on all spirit sales revenue – the very fee that was a selling point for I-1183.

If that happens, the worst-case scenario presented by initiative opponents would come to pass: Scores of new outlets would be selling liquor virtually around the clock, undoubtedly increasing consumption and the threat of minors drinking, yet local governments would have less money to enforce liquor-sale rules and prosecute drunk drivers.

Voters were warned that privatization could lead to higher prices, and they still voted for I-1183 – in part because they believed that local public safety efforts would benefit. State lawmakers should allow the initiative to take effect the way it was sold to voters – higher prices and all.


Leave a comment Comments → 5
  1. Brew66 says:

    Idon’t think voters bother to read the text of any initatve over 5 pages. INT. 1183 was 57 pages long and the ‘Devil in the details”srarted on pg13-20. It is evident the licence appliccants even
    after 6 months hadn’t bothered either.
    I was in the industry for 40 years.It took me about a week to figure
    out that the sponsors of 1183’s self serving language,could only give a lower price to a direct buyer with a 14% markup and a12% gross profit.
    Before the the electin I toldover 100 friends and neighbors it was a BAD LAW only my friends who knew my back ground believed my facts, most others coment, too COMPLICATED! Now we will have THE BIG JUNE SURPRISE! If you can find your favorite brand at any price. I think the public will be surprised just how much COSTCO will be charging for their 1.75 ltr. brand name product say ABSOLUTE, compaired to their
    California prices. Reason California state SPIRITS TAX $3/GAL.
    Washington state Spirits tax $26.48/gal now and adding a 27% sales fee
    or tax???

  2. Rick13 says:

    You don’t break something that is still working well. Now do we know WHY? When people who stand to make money are bankrolling an initiatiwe there is a REASON they are doing it. More profits mean higher prices !!!

  3. Harry_Anslinger says:

    As I am only an occasional drinker I wasn’t overtly pro or con on this initiative, and spent several weeks reading and trying to figure out if privatization had merit, or if the suspicions that Costco was buying a sweetheart deal for themselves were correct. I voted against 1183 in the end because I felt we had a system that worked, and any initiative bankrolled like 1183 was bound to be problematic. However, the yays ‘won’ out…I guess I still don’t understand how this was a win for anyone BUT Costco?

  4. On reading the news artical of may 4th from Olympia.I feel that the
    Contract Stores have a valid complaint. Curently as a store selling
    WSLCB products they are required to give on premis licence’s a 15% discount from shelf price. Now the board in their rule makeing power
    decides that they have to charge 17% more. Do wholesalers who can also
    sell on premis accounts have to charge the wholesale 10% fee and the
    17% retail fee? How about the distiller? The law gave the Board great
    latitude in it’s rule makeing powers.

  5. cobound says:

    . “Reason California state SPIRITS TAX $3/GAL.
    Washington state Spirits tax $26.48/gal now and adding a 27% sales fee
    or tax??? ”
    seems to me the real problem here is WA state over taxing us again. Do they really think living in this state is worth paying the overinflated taxes on everything? I don’t…I’m outta here!

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