No city, county revenue at stake in liquor vote

OLYMPIA – A year ago elected officials throughout Snohomish County worried aloud about a Costco-inspired liquor privatization measure shorting city and county budgets of millions of dollars in revenue.

Their silence this year on the company’s Initiative 1183 is audible.

In 2010, Snohomish County Sheriff John Lovick actively campaigned against Initiative 1100 and signed the statement in opposition to it in the voter’s pamphlet mailed to more than 3 million voters.

This year he’s not involved at all in the effort to defeat Initiative 1183.

What’s different? Mostly money.

Initiative 1183, unlike Costco’s last ballot offering, aims to leave tax coffers of cities and counties untouched as it shifts the sales and distribution of hard liquor from the state into the hands of the private sector.

Its authors contend cities and counties might even make out better in the deal, effectively neutralizing questions that undoubtedly cost votes in 2010.

“I believe this is a significantly improved initiative that takes into account the arguments made last year about lost revenue,” said Bothell Mayor Mark Lamb, who has publicly endorsed the initiative.

Mayor Ray Stephanson of Everett, who declined to say how he’ll vote on it, did say his city should not be hurt financially if it passes. That’s something he could not say during the initiative debate a year ago.

“From everything we’ve been told this initiative is either revenue-neutral or, as some believe, we might see some additional revenue,” he said. “We don’t believe we will be hurt from a revenue perspective or an ability to provide public services.”

Lovick said he is voting against the measure because he believes greater access to alcohol will increase risks to the public’s safety. But overall it is better crafted and more politically palatable, enough so that he chose not to engage in the campaign.

“If an initiative is going to pass, I think this is probably as good as it is going to get,” he said. “Even though I’m not going to take a public position, the way the initiative is written this year, it does do more for local government.”

Initiative 1183 directs the state to close the 166 stores it owns as well as its liquor warehouse by June 2012, and to sell all the stock. It allows those stores to be re-opened under private ownership and ensures continued operation of the existing 162 contract liquor stores.

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

Alex Fryer, spokesman for the coalition opposing the ballot measure, said backers are “making a lot of promises to a lot of people. After all they’ve done touting the (initiative’s) benefits, it is telling that there aren’t more city officials publicly supporting it. Their silence is deafening.”

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 mark-up, 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.

Today, each sale of a bottle of hard liquor nets a little money for cities, counties and the state. It added up to $416 million in the fiscal year that ended June 30, according to the Liquor Control Board.

Of that total, $345 million flowed into the state general fund and $71 million to cities and counties. The share for Snohomish County and its cities totaled $6.7 million.

An analysis by the state Office of Financial Management estimates passage of Initiative 1183 could increase that amount by $3.1 million or more each year for the next six years.

All those dollars get used for day-to-day operations, with most poured into police and fire services because those eat up the largest chunk of spending by local governments.

Supporters of 1183 know voters didn’t like last year’s imbalance of greater access to booze and fewer dollars to law enforcement. They made sure this year to put in money for public safety and to let voters know it.

“The hype from the last initiative certainly impacted the current initiative,” Mountlake Terrace Councilwoman Laura Sonmore wrote in an email.

A year ago, the Mountlake Terrace City Council held a hearing on the prospect of losing revenue from liquor privatization. This year, it’s not even been an agenda topic.

“The funding we receive from liquor funds is for public safety,” she wrote. “The main concern is not having our citizens pay more taxes or reduce city services when an initiative takes away funding from cities. We should all read this initiative carefully before we vote. Don’t rely on hearsay.”

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

Initiative 1183

•Closes state liquor stores and sells their assets, grandfathers in existing contract stores.

Closes the state liquor warehouse and sells its stock and repeals a 2011 law directing the state to solicit bids for leasing the state liquor distribution facilities to a private party.

Licenses private retailers to sell and distribute spirits and levies fees based on sales.

Allows wineries to distribute directly to retailers. Eliminates the requirement that distributors and manufacturers of wine sell their product at a uniform price.

Limits sales to stores with at least 10,000 square feet of retail space, though allowances can be made by the state Liquor Control Board for areas in which there is no such large retailer.

Doubles fines on retailers for improper sales of distilled spirits.

On the Web

Yes on 1183: yeson1183.com

No on 1183: protectourcommunities.com