In one of the state's most initiative-heavy election seasons, not one, but two separate initiatives aim to put an end to the government's monopoly on liquor. Washington is one of only 18 states that continue to control the distribution and sale of hard liquor, and under the current system, liquor is distributed by the Washington State Liquor Control Board (WSLCB) and sold in Washington's160 state-run liquor stores, or by state-approved private contractors.
Initiative-1100 and Initiative-1105 aim to privatize the state's liquor retail system, giving current licensed beer and wine retailers, such as local grocery and convenience stores and big-box chain stores, the ability to sell hard liquor.
Under I-1100, which has been heavily supported by retail giant Costco, current beer and wine retailers would be able to purchase an annual liquor license. The Liquor Control Board would no longer set price controls, and bans against volume discounts would be repealed. Unlike the current system, retailers would be able to buy directly from manufacturers, in essence becoming their own distributors.
I-1105, would also allow retailers to purchase liquor licenses, but it would preserve state laws that are in place to protect liquor distributors such as the uniform price requirement and the prohibition against bulk discounts. Whereas I-1100 would keep current liquor taxes in place, I-1105 calls for the repeal of all existing taxes applied to liquor and the institution of a new tax, as developed by the WSLCB and approved by the state legislature.
Washington State has the highest liquor tax rate in the nation, and at $25.73 per gallon, liquor taxes generate a significant amount of income for the state. According to a "State Government Performance Review" issued by state auditor Brian Sonntag in January 2010, the Liquor Control Board brought in $322 million in taxes and operating income in fiscal year 2008, revenue that is used to fund both state and local services. Initiative backers contend that the state would generate more revenue by cutting the operating costs of its liquor stores and distribution center and through the sale of liquor licenses.
According to a July 28 post on the Washington State Budget & Policy Center's blog, the "extent to which I-1100 and I-1105 would impact the state budget is yet unclear. A number of factors suggest that both initiatives could significantly reduce state resources in the coming years."
The potential for lost revenue is just one of the major concerns of the Keep Our Kids Safe Coalition, a coalition of members of the Washington State Council of Firefighters, labor unions, mom-and-pop store owners and church coalitions, and the state's most vocal opponent of both I-1100 and I-1105.
"[I-1100 and I-1105] would increase access and decrease monitoring and prevention, harm state and local funding for related law enforcement and education programs, and seriously affect public health and the safety of our communities," reads a Keep Our Kids Safe position paper.
The Washington Brewers Guild, which represents small breweries across the state, also recently released a position paper detailing its opposition to I-1100, calling the measure the "the greatest threat the Washington craft brewing industry has experienced in a decade".
"I-1100 is being marketed as just privatizing the sale of hard liquor, but it actually repeals 39 state laws, 11 to 15 of which have a direct impact on how Washington state breweries and wineries do business," says Heather McClung, Washington Brewers Guild President and owner of West Seattle's Schooner Exact Brewing Company.
"It's really a sweeping attempt to deregulate our entire industry," she says. By giving volume pricing discounts to the largest companies, the initiative favors the largest players in the industry and eliminates the level playing field small breweries need to prosper. Of the state's 150 breweries, McClung says that 148 are categorized as small businesses.
The Washington Brewers Guild has yet to take an official stance on I-1105. According to McClung, the Guild will either declare its support for the initiative in the coming weeks or it will continue to remain neutral on the measure. "[I-1105] keeps the three-tier system in place, but it does give some rights and privileges to the spirit industry that we have no problems with," she says.
For now, the Guild is focusing its efforts on building alliances with other I-1100 opponents.
Although the initiatives together turned in over 750,000 signatures