Political Story (Initiative 1105)

Political Story (Initiative 1105)

Julia Connacher

Pullman liquor stores anticipate voting on Initiative 1105 this November that adjusts state laws regarding the distribution of spirits in Washington.  If I- 1105 is approved, it will close all state liquor stores and to license qualified private parties as spirit retailers or distributors, generally major corporations such as Costco funding the initiative. 

However, the initiative posses financial risk for both Pullman and Washington as a state. The state’s Office of Financial Management estimates a total state revenue decrease of $486-520 million. Along with a total local revenue decrease of $205-210 million, both over the next five fiscal years if I- 1105 passes.

The state previously charged a 51.9 percent markup from the delivered cost, according to the Washington State Liquor Control Board, and would now only receive a minimal tax rate.

Supporters understand these revenue losses, although they still see more advantages than disadvantages. Supporters have raised an estimated $2.2 million in campaign contributions.

“The proposal will allow for lower prices of spirits, greater convenience outlets, in addition to cutting government costs,” said Glenn Avery, Treasurer of Modernize WA/ YES 1100 committee.

Liquor distributor licensees are assumed to be subject to the wholesaling business and occupation tax, explained Avery. There will be fewer dollars expended on governmental funded pensions for the employees of government run liquor stores, said Avery.

More efficient business model; the state will still benefit from alcohol taxes, explained Linda MacLean, Chair and Clinical Associate Professor of Pharmacotherapy at WSU. However, the inefficiencies of the state run business will disappear.

“Competition in general is good for business,” MacLean said. “I don’t believe government run agencies are the most effective or efficient.”

In contrast, opponents argue that the loss of these funds would have a notable effect on ongoing local projects and services. According to the Liquor Control Board, Pullman collected $345,909 in alcohol tax returns this year.

According to the board, money returned to local governments is used for prevention programs, law enforcement support, affordable health care coverage and health benefits for children and pregnant women, and many other related programs and services. 

Committees opposed of I- 1105 have raised a total of $8.5 million in campaign contributions.

“If voters approve, it will lead to an increase in minors legally buying alcohol and more drunk driving accidents,” said Jason Bennett, Treasurer of Protect our Communities.

Additionally, state and local governments will also lose millions of dollars in liquor tax revenues if I- 1105 passes, explained Bennett.

The citizens of eastern Washington will be positively impacted by not having to pay for the burdensome line items in the state budget, said MacLean.

“The citizens of the state of Washington should not be responsible for paying the salaries and pensions of the individuals currently employed by the state run liquor stores,” said MacLean.

On the other hand, some small local wineries may have a difficult time getting their specialty wines in front of consumers if I- 1105 passes, said Bennett.

SOURCES:

Glenn Avery- Treasurer of Modernize WA/ Yes 1100 Committee

- Phone Number: (206) 286-1498

            - E-mail: gravery@gmail.com

Jason Bennett- Treasurer of Protect Our Communities Committee

            - Phone Number: (206) 325-5013

Linda MacLean- Chair and Clinical Associate Professor of Pharmacotherapy at WSU

            - Phone Number: (509) 995-4926

            - E-mail: lmaclean@wsu.edu

OUTLINE OF STORY:

What Happened?

a.     Lede- Pullman liquor stores anticipate voting on Initiative 1105 this November that adjusts state laws regarding the distribution of spirits in Washington.

b.     If I- 1105 passes, it will close all state liquor stores and to license qualified private parties as spirit retailers or distributors, generally major corporations such as Costco funding the initiative. 

c.      However, the initiative posses financial risk for both Pullman and Washington State.

d.     The state’s Office of Financial Management estimates a total state revenue decrease of $486-520 million.

e.     Along with a total local revenue decrease of $205-210 million, both over the next five fiscal years if I- 1105 passes.

f.      The state previously charged a 51.9 percent markup from the delivered cost, according to the Washington State Liquor Control Board, and would now only receive a minimal tax rate.

Supporters:

     Supporter #1:

a.     Supporters understand these revenue losses, although they still see more advantages than disadvantages.

b.     Supporters have raised an estimated $2.2 million in campaign contributions.

c.      “The proposal will allow for lower prices of spirits, greater convenience outlets, in addition to cutting government costs”, said Glenn Avery, Treasurer of Modernize WA/ YES 110 committee.

d.     Liquor distributor licensees are assumed to be subject to the wholesaling business and occupation tax, explained Avery.

e.     Fewer dollars expended on governmental funded pensions for the employees of government run liquor stores, said Avery.

     Supporter #2:

a.     More efficient business model; the state will still benefit from alcohol taxes, explained Linda MacLean, Chair and Clinical Associate Professor of Pharmacotherapy at WSU.

b.     However, the inefficiencies of the state run business will disappear.

c.      “Competition in general is good for business, MacLean said, and I don’t believe government run agencies are the most effective or efficient.”

Opposed:

a.     In contrast, opponents argue that the loss of these funds would have a notable effect on ongoing local projects and services.

b.     According to the Liquor Control Board, Pullman collected $345,909 in alcohol tax returns this year.

c.      According to the board, money returned to local governments is used for prevention programs, law enforcement support, affordable health care coverage and health benefits for children and pregnant women, and many other related programs and services.  

d.     Committees opposed of I- 1105 have raised a total of $8.5 million in campaign contributions.

     Opponent #1:

a.     “If voters approve, it will lead to an increase in minors legally buying alcohol and an more drunk driving accidents,” said Jason Bennett, Treasurer of Protect our Communities committee.

b.     Additionally, state and local governments will also lose millions of dollars in liquor tax revenues if I- 1105 passes, explained Bennett.

How it will affect eastern Washington:

a.     The citizens of eastern Washington will be positively impacted by not having to pay for the burdensome line items in the state budget, said MacLean.

b.     “The citizens of the state of Washington should not be responsible for paying the salaries and pensions of the individuals currently employed by the state run liquor stores,” said MacLean.

c.      On the other hand, some small local wineries may have a difficult time getting their specialty wines in front of consumers if I- 1105 passes, said Bennett.