Caffeinated News & Gossip

1. Liquor distributors are floating an idea to generate about $20 million in new revenue for the state in the hopes of 86ing an effort to rewrite liquor privatization rules in Costco's favor.

Costco has been pushing legislation in Olympia this session to change the liquor privatization rules that they helped write and campaign for (they spent $20 million) in  2011 when they passed I-1183.

The changes they're after, outlined in a bill sponsored by Rep. Ross Hunter (D-48, Medina) that got passed out of the house finance committee yesterday, would allow Costco and other big retailers to become distributors to bars and restaurants by getting rid of restrictions that the initiative specifically put in place to stop Costco-sized retailers from monopolizing the system (or at least put in the initiative to convince voters they didn't have designs on monopolizing the system). Our assessment of the measure back in 2011, laid out this potential problem.

Without facing the same expenses as actual distributors, Costco and other big retailers would have a competitive advantage. Currently, Costco is limited to selling 24 liters of booze a day to restaurants and bars and must pay a 17 percent retail fee on sales to restaurants and bars. The bill would get rid of both restrictions.

And even though the changes would make Costco a de facto distributor, they'd still be exempt, as a retail store, from both the 10 percent distributor fee and from kicking in to the hefty $110 million entry fee to the state that all distributors are supposed to share to get in on the action.

Without facing the same expenses as actual distributors, Costco and other big retailers would have a competitive advantage because they'd be able to sell to restaurants and bars at lower prices. Looking at the potential for lower prices, the Washington Restaurant Association supports Costco's proposal and testified in favor of the bill.

However, distributors began floating a counterproposal this week, one that also may appeal to the restaurants. They've proposed keeping the 10 percent distributor fee in place forever—the initiative eventually ratchets it down to 5 percent. Keeping the full fee in place, the distributors say, will bring in about $40 million additional revenue to the state per biennium, which their proposal dedicates about 50/50 to the state's general fund and to cutting the tax that restaurants and bars pay for buying booze in half.

The distributors' counterproposal would also put the 24 liter sale limit in statute to prevent Costco and other big retailers from sneaking in to the distributor market.

2. The Human Rights Campaign, the D.C.-based national gay rights group, endorsed State Sen. Ed Murray (D-43, Seattle) in this year's mayor's race.

Big surprise, you scoff? That's what Fizz did anyway; after all, Murray led the fight to pass last year's historic gay marriage law. 

However, HRC, with 1.5 million members nationally, will definitely give Murray a serious fundraising base. Additionally, it's not common for HRC to get involved in local races, and Murray's campaign contends that the commitment from HRC, which has 65,000 members in Washington, will give them a "boots on the ground" edge in grassroots organizing.

3. Did you know that the new Washington State Attorney General Bob Ferguson has kept a key Rob McKenna staffer Janelle Guthrie on board as his communications point person? Fizz was pleasantly surprised to discover this as we kept getting press emails from Guthrie despite the changeover from Republican to Democratic administrations this year. (We've always liked Guthrie and the decision fits Ferguosn's maverick style.)

We asked Ferguson about the decision—the only other high-profile public staffer to stay on like that is Dave Ammons in the Secretary of State's Office, but that seat changed from Republican to another Republican. 

Ferguson wouldn't say much about it, though we hear Washington State Democratic Party Chair Dwight Pelz isn't happy about it given Guthrie's past allegiance to McKenna.