Friday, November 12, 2010
The retailers and beverage wholesalers asked the voters, in separate initiatives, to give them the keys to the state's liquor business. And why not. It's a $900 million business.
The voters wisely rejected the initiatives, thus keeping the state in the booze business.
But don't take that to mean we believe the state should continue selling liquor. We have long believed it was a mistake, as well as hypocritical, for the state to sell spirits and wine and also enforce alcohol regulations.
Yes, the state should get out of the business but it must do so in a way that benefits the taxpayers -- the owners of the state liquor stores.
The revenue stream from liquor sales must remain intact. That can be accomplished by continuing to put a hefty tax on alcohol. The liquor tax now generates about $350 million annually, which benefit state government as well as local governments. Local governments are hurting as much or more than state government because of the downturn in the economy. They can't afford to lose even a few hundred dollars let alone a few hundred million.
It's important to keep jobs. The agreement to shift the liquor business from the public to the private sector can -- and should -- include a guarantee that state workers retain their jobs for a reasonable period of time. Their experience will benefit the new retailers and their employment is good for the overall economy.
Instead of giving away the stores, the state should sell them for what they are worth.
Prior to the election, Seattle Times columnist Danny Westneat looked at the issue of selling the stores and came up with some interesting information and statistics.
Westneat wrote that a number of states are also are looking to get out of liquor and all are planning to do so by auctioning off the liquor-store system to the highest bidders.
Virginia has 332 state-run liquor outlets. Its governor proposed auctioning 1,000 lifetime liquor-sales licenses to grocery stores and other retailers for an estimated $265 million.
West Virginia already had an auction, Westneat reported, selling off its rights to be in the liquor business for an average of $220,000 per license. The top bid for a single store was $675,000.
Westneat found that Washington would likely do as well. Last year Washington Auditor Brian Sonntag concluded the state could make at least $205 million selling liquor-license rights. If the sale went as well as West Virginia's, this state could earn $265 million, Westneat wrote.
"Each one of the Seattle-area stores is worth a million dollars or more, based on sales," says Brian Smith, spokesman for the state Liquor Board.
The Legislature needs to take action that gets the state out of the retailer liquor business, continues to generate the revenue from liquor taxes and provides profit from selling -- not giving away -- the liquor stores.