It turns out Washington isn’t the only state with a government-run booze monopoly looking at shutting down its state store system, and as voters here consider two industry-backed initiatives that would ultimately put hard liquor on the shelf wherever beer and wine is currently sold, we might want to take a gander at what’s being proposed elsewhere. For example, Virginia:
Under McDonnell’s plan, the state would auction 1,000 liquor licenses to four categories of retailers and sell an unlimited number of wholesale licenses. The license revenue and proceeds from the sale of the state’s central warehouse and state-run stores would produce a windfall of at least $458 million, according to administration estimates.
Now, regardless of whatever The Stranger ends up endorsing, I’m opposed to both these initiatives for a number of reasons relating to both state finances and public health and safety, but doesn’t it strike anybody else as absolutely absurd for Washington to simply give away the state store for nada, zilch, bupkis, at the same time other states are looking to privatization for a one-time financial windfall? Can we really afford to leave a half a billion dollars or so on the table, in the midst of our state’s worst budget crisis since, well, forever?
I mean, come on… are we nuts?
I guess we’ll find out on November 2.
Even though I don’t drink hard liquor, and consequently only go to a state liquor store about once every year, I am in favor of this change. The cheesy TV ads with the “local wineries” and the earnest EMT glumly intoning that we will soon have more liquor stores than California (which must be some sort of dog whistle to the “Native Washingtonian” crowd) only hardened my resolve.
But I do agree that there’s no need to just abandon the existing stores. I always thought they would be auctioned off somehow.
In any event, when Iowa privatized their stores back in the 80’s, they didn’t have nearly the hand-wringing, and it was really no big deal. And if it means the beginning of the end for the ridiculous WSLCB, and their redundant regulations (which can and should be done by local law enforcement and zoning) that’s all the better.
Ha-Rumph!
Goldy, please cite and link when you’re making claims about the way our state is run. Thanks.
We’re not nuts, per se – just tragically and systemically misinformed.
Now I know we’re not selling the business permits but I do know the initiative calls for the LCB to sell its assets including stores and liquor. Also, come on, public health and safety? That’s a weak argument and you know it.
The state of Washington has no legitimate public interest in selling hard liquor in state stores and in regulating alcohol the way it does. If public health and safety were the issue, Ny-Quil, Listerine, beer, and wine would not be for sale in grocery stores, either. The taxation of liquor is a separate issue, and it can be taxed just as easily at the grocery store checkout as it can by a state liquor store.
the virginia plan to auction licenses is just another relic of prohibition, like the washington state stores. if you love alcohol, set it free.
I’m a politically active Virginia resident (and regular Slog reader). The amount of the “windfall” projected by the state’s Governor is a hotly contested number, with many saying that the $458M is a completely unrealistic estimate of the one-time gain, and some analysts contending that within a few years the state will realize a net loss from the sale of its stores.
I’m in favor of privatization on basic principal, and I don’t know anything about what Washington State is considering so I can’t comment on that. Just be aware that the Virginia result isn’t as cut and dried as the current administration would have you believe.
Do you honestly think that if/when the state of Washington privatizes liquor sales that they are just going to close up their stores and trash their inventory? Of course they’re going to fucking liquidate their assets to get money back. Don’t be retarded.
I support 1100. I don’t support the notion of bidding or auctioning off licenses – then only the big box stores get to sell liquor, and small grocery stores get shut out. 1100 allows any grocery store in good standing sell booze, which allows large and small stores to compete. I also support 1100 because it’ll force the liquor control board to get back to enforcing the laws. They have almost 1000 employees doing retail, but less than 200 enforcing liquor laws. Shouldn’t they have 1000 people enforcing laws?!
The legislature had the opportunity to fix this mess; they refused. Too fucking bad if the state is now losing out on a potential windfall.
There is no legitimate compelling reason for the state to hold a monopoly on one product (liquor). It is a senseless Prohibition holdover. With proper regulation and enforcement, selling it in stores should be no more and no less a public health issue than it is now. And with a sensible tax and licensing structure, the state should not lose money on this.
I’m usually with you, Goldy, but not on this one.
Since my colleagues at The Stranger are apparently too drunk on regular basis to properly inform their readers on this issue, I suppose I’m going to have to do a series of follow ups.
I mean, if you’re one of those libertarian true believers who opposes a state monopoly on liquor sales “on principal” because, I dunno, Ronald Reagan’s ghost said so or something, then there’s no convincing. But if you’ve honestly bought the industry’s bullshit that this somehow won’t steal hundreds of millions of dollars a year from the state budget at a time we’re slashing services to the bone and raising tuition 14% a year… well… I have some serious educatin’ to do.
And netcrusher @4… yes… public health and safety issues. What… you think greater access to hard liquor won’t result in increased consumption. And it’s never occurred to you that alcohol abuse carries huge social costs? We won’t see in an increase in domestic violence, drunk driving, alcohol related crime and health problems, just to name a few?
Corporate America makes billions selling convenience to lazy Americans, regardless the cost. And that’s exactly what they’re doing here.
keshmessy @11,
Oh… the Legislature didn’t “fix” this fast enough for you, so fuck everybody and pass an ill-conceived, self-serving Sharkansky-written initiative just to show ’em. That’ll teach ’em!
You know, there are a lot of things to be legitimately angry about… but the State Store system ain’t one of ’em.
Goldy, I’d be interested to read your piece.
California has pretty loose liquor laws, and they haven’t become some sort of lawless, drunk, outta control citizens. Alcohol should be available 24/7. Why there is restriction on it, I will never understand. And increased sales means increased taxes!
My only sticking point on this is that people will lose their jobs, and that selection may get worse (only bacardi, no boutique distillaries)
But maybe with the state allowing new distillaries, there won’t be a problem.
“”””
And netcrusher @4… yes… public health and safety issues. What… you think greater access to hard liquor won’t result in increased consumption. And it’s never occurred to you that alcohol abuse carries huge social costs? We won’t see in an increase in domestic violence, drunk driving, alcohol related crime and health problems, just to name a few?
“””
What, do you fucking work for the Seattle Times? By this logic why aren’t you calling for prohibition?
A cap on licenses will just raise the price of liquor (ask an economist or something if you don’t get why that is), which if that’s what you want you should tax it so the government would get the money every year instead of a one time windfall. You’re basically suggesting that we sell the right to tax liquor to a handful of stores who happen to get licenses. This is what’s known in economics as rent seeking: http://en.wikipedia.org/wiki/Rent_seekin…. It’s basically the definition of bad news from an economics perspective.
The only other thing it will do (which a tax wouldn’t do) is make it more of a pain in the ass for people that want specific kinds of liquor at convenient locations and times. That’s really not the profile of an alcoholic’s cravings.
I go to California all the time and the fact that I can buy booze at the grocery store doesn’t have any noticeable effect on society that I can see. This is probably the only vote that I won’t be voting with The Stranger’s recommendation.
@14,
They refused to fix it, period. That level of incompetence and inaction is why the initiative process exists.
Hey let’s bring back the 60/40 food sales and ban alcohol from 2 miles around UW as well. Let’s stop liquor from being sold in taverns and end Sunday sales! I’m sure there are HUGE social costs involved with the liberalization of all those laws.
Or maybe it’s just time to say FU to Washington and move back to Graham County, NC… Where they know how to make things SAFE!
I’m no libertarian, but I can’t see any meaningful benefit to individual citizens, to businesses, or to society from having state run liquor stores. That one of the ways (for me anyways) to test whether a regulation or role for government make sense.
And, if I were making the kinds of claims about health & safety that you are, I would certainly be backing them up with empirical evidence. Are there any studies that have shown what the social costs this change have been in other states? Or comparing states with different policies?
@11 & @18 has highlighted an important distinction. The change in Virginia is being led by the governor, with the involvement of the state legislature. So whatever they decide, their state budget interests will be taken into account. Here in WA, where Jim Sinegal and the rest are fed up with the state’s dithering, they went ahead and wrote initiatives to suit their interests. Can’t say I blame them. Our legislature has been tone deaf on liquor, and they’ve lost an opportunity to reform the system on their terms.
joe m, our legislature is tone deaf, period. they’re paralyzed with Fear of Eyman.
Goldy, you’re right about privatization, but wrong about auctioning the licenses. They WOULD end up in the hands of the big box stores, and that’s what killed that idiot Tim Sheldon’s proposal.
Apples to apples, if liquor taxes were the same in California and Washington, liquor would be cheaper in Washington ($13 vs. $10 for a bottle of Jose). That is the benefit of economy of scale.
Speaking of California: aside from how liquor is sold and taxed, it’s liquor laws are very similar to Washingtons. It has a three-tier system, it prohibits retail-to-retail sales, it has strict tied-house rules, it strictly regulates retailer credit to wholesalers. 1100 throws all that out, making Washington far less regulated than California. More like Guadalajara.
Profits generated by the sales of liquor are GREATER than the taxes generated by it. It’s true. That all goes to offset taxes you’re going to have to pony up when Costco gets YOUR profit.
As far a legitimacy… how about firefighting? http://freakonomics.blogs.nytimes.com/20…
When you privatize liquor, it will cost more because there is no way distiller cost will go down. Federal taxes won’t go down. States taxes won’t go down (unless you just blow the whole thing up with 1105, which SUGGESTS a 50% increase in taxes– oh boy). And wholesalers and retailers won’t be able to fit their costs and profits into the remaining 28% of the current retail prices.
Privatization is going to happen sooner or later (right about the same timeline that we introduce an income tax and get out of this crazy quilt tax system), but this is a really stupid way to go about it. The right way to do this is to convert entirely to the Oregon model of independent contract stores over a period of two or three years as you gradually sell off the distribution business… not in a panic sale which is going to cost us a bundle. The time frame of conversion alone is idiotic and insanely expensive. Once there it would be easy to convert the contracts to licenses (first to liquor stores ala New York and later if you want to anybody) and let the market decide how many.
The main problem with these initiatives is that they are very, very expensive. They are daylight robberies by Costco and Wal-Mart on side or the big national distributors on the other (which is just trading one monopoly for another).
Paddy @23,
I don’t support auctioning off the stores or the licenses, I’m just pointing out that if you’re gonna privatize, this is an ass backwards gift to the industry that taxpayers can’t afford.
As I’ve posted previously at HA, I’m for maintaining the State Store system as a state monopoly, and in fact expanding it to include the legal sale of marijuana. It’s a ironic that as pot legalization begins to gain momentum, we’re about to toss out the fast path toward achieving.
As to those demanding facts and figures and links, like I said, I’ll have to do some follow up posts. There are studies to support my assertions, I just have to go dig ’em up.
keshmeshi @18,
No, the initiative process was created with the intent of challenging the control of corporate interests, not serving it.
@10 that is a rather scary thought. The LCB is a big enough pain in the ass as it is. Just what we need is 800 more enforcement officers. Seriously though do you imagine that liquor store clerks have the qualifications to be re-assigned as vice cops?
Hardly some radical libertarian position dictated by ‘Reagan’s ghost’ that the anachronistic puritanical authoritarianism behind a state monopoly on liquor is ridiculous. Reagan would no doubt approve of Goldy’s bogus public safety argument and be all for maintaining the state’s role in strictly regulating our vices and making sure we don’t forget they are dirty.
@24,
I see. So you oppose this because it hurts your pet project.
@25,
There are entrenched corporate interests that oppose these initiatives. Who do you think is funding the ads against them? The lunatics at MADD don’t have that kind of cash laying around.
Anyone who didn’t see these initiatives coming after Costco lost its lawsuit doesn’t have a brain in their head. The legislature refused to act because OMG THE CHILDREN!!!!!!!!!!!!!! And here we are. Washington’s government has only itself to blame.
Let’s see, we’ve taxed, controlled and operated the sale and distribution of liquor from Colonial times in this country. Maybe some are OK with a local store clerk earning minimum wage with no health benefits or a reliable retirement (oh, gee, I’m going to hear from all those out there who accept that they don’t get benefits or a retirement or are stuck with crony, casino capitalism’s 401ks–hey, get organized and fight for something instead of whining) selling liquor and the “consumer” (evidently we are no longer “citizens”) gets to save a few bucks for a few years…we are able to collect over $200 million in revenue in the current system. I enjoy a nip or two and frankly, don’t mind paying for it at state run liquor stores–indeed, I’d rather that than the alternative of profit-driven operations heaping cash into campaigns to continue to erode the commons in service to their personal profits.
As mentioned above, the Virginia sale price is a conjecture as well as one-time only revenue. The decision has been likened to selling a rental property because you are temporarily hard-up for cash. Sure, you get a lump-sum to pay off debts, but you lose any option of future income form that source.
keshmeshi @27,
No, you have yourself to blame for voting for an ill-conceived, half-ass initiative.
Let me ask you… did you go down to Olympia and lobby on behalf of liquor sales reform? Did you call up your representatives and give them an earful?
No… you just angrily blame government in the comment thread of a blog post. Then you’ll likely blame government again for the mess this initiative makes.
It’s funny how so many people who argue that we should be allowed to take responsibility for our own actions when it comes to drinking, don’t do the same when it comes to voting.
If this passes, it’s your fault. When hundreds of millions are cut from education and health care and law enforcement and public safety — much of it at the local level — it’s your fault. And when alcohol related crime, accidents and health problems rise due to increased consumption… it’s your fault. Not the legislature’s. Yours.
Dear Goldy, could you please expand on this comment of yours:
“When hundreds of millions are cut from education and health care and law enforcement and public safety — much of it at the local level…”
This seems to be the hardest part of these two initiatives to get information on. The state will still be taxing liquor sales, so where does a loss like this come from? It would seem that a boost in privatized sales would only bring in more tax money to WA…could you clear this up? I’m mostly interested in 1100 and will vote no on 1105.
Don’t liquor licenses require renewal fees? Isn’t that a source of revenue that will also grow once more stores can sell?
From the fiscal impact statement in the voter’s guide: “One-time net state revenue gain of $27.8 million is estimated from sale of the state liquor distribution center.” So obviously they don’t plan to simply give it all away.