Costco-backed liquor initiative wins over voters

Voters broke the state’s ironclad grip on the sale of booze Tuesday, approving a measure to privatize the industry, pushed by Costco, in an election battle that broke spending records.

Initiative 1183, which will get the state out of the business of selling distilled spirits next summer, led 59.7 percent to 40.3 percent in the initial round of ballot counting. It was passing in 34 of the state’s 39 counties, including Snohomish, according to results compiled by the Office of the Secretary of State.

Voters, meanwhile, were narrowly rejecting Tim Eyman’s latest ballot offering, to clamp down on the uses of tolls, and backing an initiative to increase training and conduct tougher background checks for long-term care workers.

Initiative 1125, pushed by Eyman of Mukilteo, was losing 50.9 percent to 49.1 percent in early returns.

Initiative 1163, dealing with long-term care workers and services for the elderly and disabled, was passing easily, 66.7 percent to 33.3 percent.

Tuesday’s marquee battle was Initiative 1183, which sought to end the state’s monopoly on the sale and distribution of hard liquor, which has been in place since 1934.

With Costco putting $22 million behind it and national distributors countering with roughly $12 million in opposition, it became the most expensive initiative campaign in state history.

For Costco and its allies in the restaurant and grocery businesses, it’s a sweet win, coming a year after voters turned down two measures on privatization.

“We’re delighted,” said Bruce Beckett, vice president of government affairs for the Washington Restaurant Association. “I think the voters clearly understood the policy implications, that it’s not appropriate for the state to be involved in the retailing of liquor.”

Beckett also believed voters liked that the measure would increase revenue to local government and toughen penalties for selling booze to minors.

For opponents, it’s a tough defeat. Members of the Protect Our Communities coalition primarily argued, as they did a year ago, that making alcohol more widely available created unacceptable risks to the public’s safety.

“We remain concerned about the initiative’s consequences on public safety and we hope the supporters of I-1183 will do everything in their power to ensure that the revenue promises made to local law enforcement during the campaign are fulfilled as Washington ends its current liquor control system,” said spokesman Alex Fryer in a prepared statement.

The state will have to close its 166 stores, as well as its liquor warehouse in Seattle, by June 2012 and sell the stock. It allows those stores to be re-opened under private ownership and ensures continued operation of 162 contract liquor stores.

Liquor sales will be allowed at licensed grocery stores and other retailers with at least 10,000 square feet of space. And the state Liquor Control Board could grant liquor-selling licenses to small convenience stores in areas not served by a large retailer, as in the town of Index.

The measure erases the state’s power to control prices and lets retailers make deals directly with wholesalers. It leaves in place sales and liter taxes but axes the state’s 51.9 percent markup, which is a source of funds for local governments. To offset that loss, new fees are imposed on retailers and distributors, which are certain to be passed on to customers.

Those fees will bring in tens of millions of dollars more for state and local governments, according to a state analysis.

Initiative 1125

Eyman’s latest shot at shaping state government via initiative would clamp down on the use of tolling to solve the biggest transportation riddles in Washington.

He argued that Initiative 1125, which was narrowly losing, would apply just enough pressure to ensure lawmakers are held accountable for how billions of dollars in tolls now and in the future will be spent.

It requires the Legislature to set tolls on highways and bridges instead of leaving the decision making in the hands of the seven-member state Transportation Commission. State officials fear such a change will inject too much politics into the process and make it a lot more difficult to sell bonds backed by tolls.

Tolls would have to be “uniform and consistent,” and the initiative would bar variable pricing, which allows tolls to rise when traffic gets heavy and to fall when it is light.

The initiative would reaffirm state law requiring that toll revenue be spent only on the highway or bridge on which it is collected. Tolls would end once the debt for the prescribed work is paid off.

Initiative 1163

The Service Employees International Union, which represents long-term care workers, put this measure on the ballot. It was winning by a 2-to-1 margin Tuesday night.

It would increase the number of training hours from 35 to 75 and would require federal background checks instead of state ones. The measure would cost about $18 million over the next two years, according to a state analysis.

That cost is why Gov. Chris Gregoire, a Democrat, and Attorney General Rob McKenna, a Republican who is running for governor, are among those who opposed the measure.

Voters overwhelmingly approved expanded background checks and training for long-term care workers in 2008 when they passed Initiative 1029. But lawmakers have delayed implementation for three years, citing a lack of money.

Jerry Cornfield: 360-352-8623; jcornfield@heraldnet.com.

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