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2010: I-1105 (Liquor Reform)

Results: Washington State voters said no to the privatization of liquor sales. I-1105 was rejected, with only 35% of voters voting for the initiative (753,096 votes), and 65% of against (1,368,988), according to The Seattle Times. According to the Public Disclosure Commission, Yes On I-1105 raised $2,744,000.00, and spent $2,674,911.36 on their campaign. According to the same report, Protect Our Communities (the coalition of groups working to fight both 1100 and 1105) raised $8,877,831.51, and spent $8,763,567.99.

>> Go To Fact Checking Claims On I-1105

Initiative 1105 would close all state liquor stores and license private parties to sell or distribute liquor, privatizing the liquor retail system. The initiative would require private licensees to pay the state a percentage of their first five years of gross spirits sales; it would repeal some existing taxes on retail spirit sales; and it would include a recommendation to the legislators that spirit distributors be required to pay a tax.

In short, this initiative would

  • Require the state to close state liquor stores by April 1, 2012
  • Would eliminate the state’s markup on liquor ($15–$17 million, which accounts for half the cost of liquor) and repeal taxes on the retail sale of spirits.
  • Would establish a three-tier system for the spirits industry that would separate manufacturing, distributing, and retailing of spirits and regulate the financial relationships and business transactions among entities in these tiers.

Current Law

Currently, the state controls the sale and distribution of spirits in Washington. The term “spirits” refers to the alcoholic beverages commonly called “hard liquor” (whiskies, vodka, gin, etc.), any beverage containing distilled alcohol (except flavored malt beverages), and wines exceeding twenty-four percent alcohol by volume. Spirits are sold at retail by state liquor stores and contract liquor stores (which are businesses selling liquor on behalf of the state through a contract with the state). Spirits are distributed within Washington by the state Liquor Control Board. The Board purchases spirits from manufacturers, distillers, and suppliers, furnishes spirits to state liquor stores, and sells spirits directly to authorized purchasers, such as restaurants. Spirits manufacturers, distillers, and suppliers may sell spirits within the state only to the Board.

Fiscal Impact

Using a range of assumptions, the state estimates that state revenues would decrease up to $100 million a year (over five fiscal years) and that local revenues would decrease up to $40 million a year (over five fiscal years). A one-time net state revenue gain of $27.8 million is estimated from sale of the state liquor distribution center. One-time state costs are estimated at $39.2 million.

City and County Revenues from Liquor Profits, Liquor Excise Tax and other Revenue

Fiscal Year 2011 2012 2013 2014 2015 TOTAL
City/County Revenues ($0) ($32,646,000) ($70,877,000) (76,826,000) ($83,063,000) ($263,412,000)

Initiative Timeline

  • October 1, 2011: anyone holding a “spirits distributor license” can buy spirits from manufacturers, distillers, and suppliers and can to sell spirits to any person holding a license to sell spirits in Washington
  • November 1, 2011: “spirits retailer licenses” are available
  • November 15, 2011: the state will no longer operate the state liquor distribution center or state liquor stores.
  • April 1, 2012: the State Liquor Control Board must have closed state liquor stores and have made a good-faith effort to sell its liquor store inventory and assets by that time
  • April 1, 2010: End date for the Washington State Department of Revenue administration of the liquor excise tax collection

Washington State Secretary of State, Online Voter Guide

Initiative Supporters

Those supporting I-1105 argue that the current system of alcohol distribution and control is an outdated remnant of prohibition. They say I-1105 is “pro-middle man” and will allow private distributors to increase their profits. They also argue that the new licensing process will generate additional revenue for the state.

Prominent supporters to Initiative 1105 include:

  • Odom Corporation
  • Young’s Market Company

Web presence

Initiative Opponents

Opponents argue that privatizing liquor sales will make it too easy for minors to buy liquor, and, that should the initiative pass, the number of liquor outlets in the state would increase from 315 to 3,300. Unionized workers in state liquor stores worry about their jobs (~1,000). Opponents also argue that the state will lose money with this change (the loss in retail markup and the temporary repeal of state taxes).

Prominent opponents to Initiative 1105 include:

  • The Beer Institute
  • The National Beer Wholesalers Association
  • Washington Association of Churches
  • Washington Beer and Wine Wholesalers Association
  • Washington State Council of Firefighters

Opponents have  raised more $8.2 million to fight 1100 and 1105, with most of the funding coming from the National Beer Wholesalers Association and the Beer Institute (the chairman of the Beer Institute board is also the president of Anheuser-Busch).

Web presence

Polling Data:

According to the most recent Elway Poll (September, 2010)  support for I-1105 looks like this:

24 % definitely support the initiative
17 % probably support the initiative
26% are undecided
15 % are definitely against the initiative
18%  are probably against the initiative

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