Washington is one of a handful of states weighing whether privatizing liquor sales is the way to increase revenue and help shore up the budget deficit.
Some lawmakers in Olympia want to sell the state’s 250,000 square-foot distribution center in Seattle – bringing the state a one-time boost of about $33 million – and let the private sector step in to sell liquor, which some say will reap long-term cost benefits.
Sen. Rodney Tom, a Medina Democrat who is a chief budget writer for the Senate, has introduced a bill that would have Washington get completely out of the liquor business, allowing an unlimited number of people to buy licenses to sell liquor, as is done in California. Other lawmakers have introduced measures taking smaller steps toward privatization, including bills that would auction franchise agreements for stores like Costco, or which would allow a limited number of smaller contract stores to sell booze.
Currently, liquor brings in about $320 million in revenue to Washington each year, but a recent report by state Auditor Brian Sonntag found the state could increase revenue by as much as $277 million over five years if it changed its current liquor model.
The report comes at a time that Washington lawmakers are looking to patch a $2.6 billion deficit.
A part of the potential savings is the loss of about 800 union jobs, which means that the state would save on long-term pension and health costs for those workers. Tom knows the union issue is the most controversial aspect of privatization, but he said union jobs are at risk either way.
One privatization bill introduced in the Washington state House by Rep. Gary Alexander, R-Olympia, would change the state model to that of Oregon’s, where all liquor stores are private stores that contract with the state.
Another bill by Alexander, along with a companion Senate bill by Sen. Tim Sheldon, D-Potlatch, would auction franchise agreements to the highest bidder, which would open the door for grocery sales.
However, Democratic leaders, including Gov. Christine Gregoire, have come out strongly against privatization, saying it’s not a viable budget solution for the immediate fiscal problem the state is facing. Under the auditor’s report, the state wouldn’t start seeing savings from the change until 2012. (AP)
