This Washington

Last Call For Liquor Privatization

By Andrew Calkins April 27, 2011

Yesterday Josh gave us a list of some of the issues likely to be points of contention during the special session, among them: a push to lower the state's allowed debt limit; a move by conservative Democrats and Republicans to require future teacher layoff decisions to prioritize evaluations over seniority; and the recurring push by Republicans scale back workers' comp payouts. But he left out a biggie: liquor privatization.

Sen. Tim Sheldon (D-35, Potlach), clearly not deterred by the fact that his liquor proposal never got a hearing during the regular session, is introducing an identical piece of legislation now. Sheldon's re-do privatizes state stores, eliminates the markup on liquor sales, and includes provisions directing the liquor control board to ensure that the "privatization of liquor sales and distribution not result in revenue losses to state or local governments." Sheldon's legislation is also a referendum and would require a vote of the people.

Meanwhile, on the heals of their failed privatization initiative last November, I-1100, Costco has pushed new legislation to privatize liquor sales. Sen. Rodney Tom (D-48, Bellevue) introduced that bill earlier this month. That bill takes heed of last year's loss by requiring retail venues to be at least 9,000 square feet, includes a $1,000 application fee, a $1,000 license fee, and requires retailers too pay six to seven percent of their gross receipts to the state. Costco estimates several hundred million dollars could be raised by that provision. However, that payout sunsets after five years.

The issue of liquor privatization—or at least partial privatization—is also a sticking point between the house and senate budgets. The house version includes a $300 million boost from leasing the distribution system to a private company. But as Austin Jenkins at the Washington Ledge reported, an analysis by the Office of Financial Management has said the Hunter plan could result in a $1.3 billion loss to the state over a 20 year lease. In an interview with Jenkins, Hunter lamented that taking the plan out of the proposal would mean much deeper cuts.
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