The state Office of Financial Management has rejected both bids to take over the state's liquor distribution business, a partial-privatization proposal that was intended to help close the state's budget gap.
The idea was that the state would lease its liquor distribution center, currently run by the Washington State Liquor Control Board, to a private company. That company would have been required to offer jobs at the distribution center to employees at the existing state-run center.[pullquote]OFM director Marty Brown said the agency has "determined that neither proposal results in net positive financial benefit to the state or local government or best meets the interests of the state."[/pullquote]
In a letter to the liquor board today, OFM director Marty Brown said the agency has "determined that neither proposal results in net positive financial benefit to the state or local government or best meets the interests of the state. ... When analyzing the factors relative to the financial section of the proposals, neither proposal was able to provide enough assurance that the firm could achieve its projected sales growth assumptions. If these assumptions were not achieved, the state and local government could be left with significant financial risk in future years."
Moreover, Brown added, the state itself could implement some of the changes the bids proposed on its own; one bid, from Washington State Beverage Logistics, relied heavily on simply raising the price of liquor.
Today's winner: Initiative 1183, Costco's liquor privatization initiative.
Costco, the backer of I-1183, strongly opposed the bill allowing the state to accept bids from private companies to lease the liquor distribution system, fearing that partial privatization would dilute the public's enthusiasm for its total-privatization bill. The death of both bids gives 1183 a jolt.