Sandeep Kaushik is worried about the changing scenery should voters this fall decide to turn Washington's state-run liquor business over to the private sector.
Kevin Casey
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"You could see five retail liquor stores for every Starbucks in the state," says Kaushik, spokesperson for Keep Our Kids Safe, a labor-backed coalition opposing two historic initiatives to privatize hard-booze sales.
Not that Kaushik's got anything against liquor. As he wrote in 2004 while working as a staff writer at The Stranger, "The simple truth is that alcohol never hurt anyone, and besides, even if it did, it was his or her own fault and not the fault of the booze." For that matter, he added, "Look at me. I'm a huge success in life and I stay drunk all the time."
Now a spokesperson-for-hire, Kaushik 's right about the landscape should a majority of voters toast either (or both) Initiative 1100 or Initiative 1105 on November 2: According to a January study by State Auditor Brian Sonntag, privatization could create as many as 3,300 retail outlets selling spirits statewide. That's 10 times the current number of state liquor stores, and roughly equal to the number of state Starbucks and McDonald's outlets combined.
"Mini-marts, gas stations, drugstores, drive-thru liquor stores," says Kaushik, a father of two. "It makes you wonder where liquor won't be sold."
Accessibility would increase, and so might the cost of booze. Sonntag's study hints at such a rise, and former state Rep. Toby Nixon, an I-1100 supporter, says the reality is that the legislature could almost double the current 33 percent per-bottle tax, leading to higher shelf prices.
But the demand is apparently there. The two initiative camps turned in petitions with more than 750,000 signatures total, with I-1100 now approved for the ballot and I-1105 likely to be certified soon. These "people's initiatives" happen to be the brainchildren of three major corporations that have spent more than $3 million in the hope of reaping millions in booze sales. One, warehouse chain Costco, the world's ninth-largest retailer, turned its 28 Washington stores into mini–political mercantiles, using employees to solicit customer signatures for I-1100 with come-ons to the effect of "Imagine if you had a case of Jack Daniels to go with that year's supply of paper towels."
Of the two measures, I-1100 would result in the most dramatic changes, eliminating a "three-tiered" system that regulates manufacturing, distribution, and retail sales. The state would turn over those government operations to private businesses that already carry beer and wine, and to new licensees as well.
I-1105 would similarly privatize the liquor retail system. But Costco, Walmart, Safeway, and other big-box retailers don't like this measure as much. They want to be their own distributors, and I-1105 mandates a middleman role for big beverage carriers such as Bellevue's Odom Corporation, a major contributor to the I-1105 campaign.
Either way, if privatization is approved, demon rum could become as accessible as milk and cookies in Washington next year—if voters can figure out what they're voting on, that is.
The notion of taking Washington's liquor business out of government hands has been debated from legislative chambers to neighborhood bars almost since the Washington State Liquor Control Board was created after the end of federal Prohibition in 1933.
Lawmakers could never bring themselves to turn over the state's hard-booze monopoly to private operators, giving up control—and millions in annual revenue. Ten years ago, a gubernatorial committee also took a hard look at privatization and then voted against it. So after decades of no options, the public suddenly has two competing initiatives offering potentially different results and debatable costs.
For sure, privatization means closure of the state's 315 state-run (and, in more remote areas, contracted) liquor stores next year, likely eliminating about 900 state jobs and stopping the flow of at least $60 million in liquor revenue going to state and local government programs. To critics, the initiatives promise a diversion of public money into corporate coffers under the pretense of downsizing big government. But both initiatives' backers claim these state funds could be restored by hiking liquor taxes, adding to what is already America's highest state liquor levy.
Auditor Sonntag's report, which offered several "liquor model" options for privatization, concluded that the state could increase revenue by as much as $277 million over five years by selling off its retail/wholesale operations. The report made no recommendation, but "my personal opinion," says Sonntag, a possible Democratic gubernatorial candidate in 2012, "is that the sale and distribution of alcohol is not a core function of state government."
Initiative backers today think a majority of citizens agree. But a July 9 poll by KING-TV and Survey USA on ending Washington's distinction as one of eight states that control wholesale and retail liquor sales showed no clear support for the measures. About 65 percent of respondents said they trust the state rather than private stores to responsibly sell liquor.
Sonntag thinks the Liquor Control Board could maintain oversight over store locations and hours of operation. But hard liquor would surely flow more freely—Sonntag's own projections include a 15-percent increase in sales if the state relinquishes retail and wholesale control. And sales have to increase—and/or taxes must be steeply hiked—to make up the lost state revenue, as the initiatives propose.
