For years, 35th District Senator Tim Sheldon (D-Potlatch) has routinely introduced bills to private liquor sales in Washington. This year is no exception. We are one of the few states where alcohol is still state-controlled, as most long ago understood the wisdom of collecting the taxes without the overhead of store leases or state employees, along with their hefty benefits and taxpayer-funded pensions.
According to a report by released last month by State Auditor Brian Sonntag, the state could increase revenue from liquor sales and distribution by $350 million if it sold the state’s single distribution center and auctioned off licenses to private enterprise. In many states, like California and Arizona for example, liquor is sold in grocery stores. In Florida, it’s sold in drug stores like Walgreen’s and Rite Aid, along with numerous Mom & Pop operations.
Sheldon was particularly critical of the state’s distribution system at a recent Port Orchard Chamber of Commerce legislative forum, bluntly asking if Costco or Walmart for example, could operate with the inefficiency of only one distribution warehouse for the entire state. There are 315 state-operated and contracted liquor outlets — at least three times more than Costco and Walmart combined.
The report stated that the $350 million savings wouldn’t be realized until the beginning of the 2012 fiscal year — which won’t help reduce the current $2.6 billion budget deficit. Gregoire has seized on that as her excuse for continuing to maintain the current inefficient system, which would net state and local governments about $2.36 billion between 2012 and 2016. Approximately 60 percent of liquor revenues go into the state’s General Fund, with 19 percent allocated to cities and counties.
Privatizing liquor sales is certainly not the single answer to solving the state’s long or short-term budget woes. And yes, there would be hassles transitioning from a state-run monopoly on liquor to a competitive private sector business model. But it’s the legislature’s refusal to make the systemic changes necessary in good times, that have contributed mightily to the current bad times. Why not let this be a test model for private sector operation of other state-run services?
It’s the re-opening of collective bargaining agreements with the state employee unions that I suspect is the true reason for Gregoire’s opposition. They own her, and they have the Democratic-controlled legislature quaking in their boots, after making no bones about the fact there will be no campaign dollars for legislators voting against their dictates. And don’t forget, the entire legislature is up for re-election this year.
Unfortunately, the party in power would have to deal with thousands of otherwise minimum wage workers who would be losing “their hefty benefits and taxpayer-funded pensions.”
Republicans might be willing to take that risk, but it seems to be the backbone of the Democrat’s statewide strategy. They have increased the state payroll dramatically under Gregoire and have the audacity to claim credit for creating jobs. They do this to the detriment of private businesses and taxpayers who pay the inflated price of keeping the Dems in power.
Tim Sheldon is wrong and Larry Coppola is misinformed. The states distribution system is not inefficient as you might think. I have been a Contract Liquor Store Manager for a short time (about 3 years) before that I spent 15 years with a beer and wine wholesaler, and after comparing the two systems the states system is more efficient than the private sector. While State’s system is not without its faults it is highly efficient, as a matter of fact the State system would be the envy of any private beverage distributor in the State for that matter the west coast. While privatization might be the right thing to, don’t misinform the public by calling the State system inefficient. Tell them what you really support, the loss of State jobs, the closing of competitive small businesses and the over all shift of retail revenue to big business, because isn’t that what Costco, Wal-mart Safeway 7-11
and Tim Sheldon want?
MPRATT — I take your word re: the state’s distribution system, but Costco and Wal-Mart offer brand name products at very low prices and 7-11 offers convenience.
I for one would like the state’s employee count reduced dramatically — at least 50%. In the case of liquor, the state offers no apparent advantage over competitive retailers. They don’t have to because of their monopoly.
It might be feasible to continue with the state liquor stores, but allow high-end alcohol (fine wine and imported beer) to be sold at grocery stores. That would be a good compromise, and it would help test whether privatization is worth it. After all, if you are hosting a dinner and want to buy a nice bottle of wine, going to a grocery store makes a useful option, whereas hard-core drinkers and teens tend to go for the cheap booze.