Should state get out of the liquor business? YES: I-1100 provides jobs, convenience
DENNIS KRUMWIEDE, JR.
Washington voters have a chance to start reforming state government responsibly through Initiative 1100, which takes state government out of the liquor business. Approving I-1100 will also create private-sector jobs, help struggling businesses such as restaurants and provide convenience, choice and value to consumers.
Liquor sales and marketing do not constitute an essential government service, and the Liquor Control Board has a clear conflict of interest in selling alcohol while also being responsible for enforcing alcohol laws.
Today the liquor board’s priorities are completely backward. More than 800 employees are dedicated to sales and supply, and only about 80 to retail enforcement. Any notion that the board wants to “control” sales was erased when it decided to open some liquor stores on Sundays and put temporary liquor stores in malls over the winter holiday season.
Instead of enforcement the priority is increasing revenue, which is why the liquor board imposes a markup on liquor of 51.9 percent in addition to state taxes. This makes the state government take from each bottle of liquor in Washington the most expensive in the country by far, a full 20 percent higher than the No. 2 state, Oregon.
I-1100 will stop this hidden 51.9 percent tax, take the Liquor Control Board out of the sales business and focus it on what it should have focused on all along: enforcement. Money for all the key functions of the board, including enforcement, education and licensing, will be retained under I-1100, and the board put more effort into making sure alcohol stays out of the hands of underage drinkers.
Thousands of businesses across the state support I-1100. It will give a vital boost to our economy and end Prohibition-era restrictions that favor distributors and hurt other businesses and consumers.
Supporters include the Association of Washington Business with 7,000 members representing 650,000 employees; the Washington Restaurant Association representing 5,000 restaurants across the state; Family Wineries of Washington State, which represents 100 small, family-owned wineries; Costco, Safeway and other grocers; and many other large and small businesses.
Voters need to view the scare tactics by the “No” campaign in light of who is funding that effort. As of Sept. 24, 88 percent of its contributions – $5.3 million out of $6.1 million – came from big out-of-state beer companies like Budweiser and MillerCoors and the national beer distributors. These are the same “public safety” advocates who have opposed a national drinking age of 21 and a lowering of the national blood-alcohol limit.
Comparative data show that the 32 states with privatized liquor sales are doing the same, and in some cases better, than the 18 states with state-run liquor stores in key alcohol-related statistics, including alcohol consumption, underage drinking, binge drinking and DUI arrests.
Having state employees sell liquor does not make a state any safer, and allowing private retailers to sell liquor alongside beer and wine does not make a state any less safe.
If there is revenue lost to the state – and that is not a given – it will be less than it costs to run state government for 12 hours, based on the Office of Financial Management estimates. Any local impact will also be very small, especially when you consider that OFM’s estimates did not account for additional sources of revenue such as local B&O taxes that will be paid by retailers under I-1100 in those cities that levy that tax.
The ability to negotiate with wholesalers and distributors, as allowed in virtually every other line of business, will benefit restaurants, grocers and other establishments, and the private sector competition will benefit consumers.
If we are ever going to start reforming government, approving I-1100 to get the state out of the liquor business is the perfect place to start.
Dennis Krumwiede Jr. is the owner of The Loose Wheel Bar and Grill in Tacoma.
