Washington’s liquor selling and distribution system may never be the same after Tuesday.
As the first all-mail general election in state history draws to a close that night, voters will get a long-awaited answer to the most contentious question of this election season: Whether or not the government should be kicked out of the liquor business.
Initiative 1183 is designed to do just that. The measure would close state-run liquor stores and allow private businesses, such as grocery stores and other retail outlet to obtain licenses to sell hard liquor.
If voters approve I-1183, the Liquor Control Board (LCB) will remain in charge of enforcing liquor laws. However, liquor distribution will fall out of the state’s control and land in private sector hands, opening the field for a vast increase in the number of stores that sell liquor throughout Washington.
Months of raging debate about the issue have culminated to create the most expensive initiative campaign in state history. The proponents, “Yes on 1183,” have raised a record $22.7 million to promote the initiative, according to the Public Disclosure Commission (PDC).
The PDC also reports that a coalition of opponents, going by the name “Protect Our Communities,” has raised $12.1 million to combat the initiative.
Each campaign has pledged to push full force to the end.
“We are definitely in the get-out-the-vote mode,” said Kathryn Stenger , a spokeswoman for the “Yes on 1183” coalition.
Campaign staffers worked late into the night through the final weekend of the election to answer voter and media questions and continue pressing the campaign during its last days, Stenger said.
“The state’s core function should be enforcement and regulation, not promoting and selling,” she said, echoing the central message of the supporters. “I-1183 allows them to just focus on enforcement and regulation.”
The initiative strengthens laws governing liquor sales, Stenger said. Fines for selling to minors would double under the measure.
In addition, only stores with at least 10,000 square feet of retail space may receive a license to sell liquor, according to the initiative. The only exception to that rule is that smaller stores can apply for licenses if there are no stores that large in the area.
The size limitations made their way into the initiative as a direct result of voter concern for putting liquor on shelves in convenience stores and gas stations in the two liquor initiatives voters turned down last year, Stenger said. This time around, the regulations are stricter, she said.
But opponents do not buy the argument.
“Our opposition to this type of proposal has been the same for years,” said Tom Geiger, the communications director for UFCW Local 21, one of the member groups of the opposition coalition.
Geiger and many others argue the initiative is bad for the state for three reasons: It poses a threat to the state’s revenue stream, threatens safety by creating more liquor outlets and leaves liquor store employees out of work, he said.
The current liquor sales and distribution system brings in hundreds of millions of dollars for state and local governments each year through liquor taxes and sales. In fiscal year 2011, it raised $425.7 million, according to a recent LCB report. Pullman received $364,195 from liquor sales and taxes in that period, according to the LCB.
The proponents say the initiative will increase state and local revenues by hundreds of millions of dollars through new licensing fees for outlets that sell or distribute liquor during the next two years. Estimates from the Office of Financial Management generally support the proponents’ revenue projections.
However, the OFM said the initiative could actually have a wide range of impacts on revenues for state and local governments, depending on liquor bottle cost and markups for retailers and distributors.
“One-hundred percent of those licensing fees paid by
businesses come back to state and local government,” Stenger said. “It’s on top of what’s already coming into state and local government, because the taxes on liquor won’t change.”
Geiger distrusts the message, saying the underlying motive of the campaign is increasing corporate profit for companies like Costco, the leading donor in support of the initiative.
“I hope that in the end, people see this for what it is, which is one company — in this case Costco — trying to spend money so they can get the law changed and make lots of profits,” he said.
Local winemaker Patrick Merry, who owns the Merry Cellars winery in Pullman, said he thinks the initiative would have little to no impact on business for small wineries like his.
Some square footage normally dedicated to wine and beer in grocery store aisles would diminish to make room for hard liquor, Merry said. But aside from that, he sees little potential for harm from the initiative, and he firmly supports it.
“Personally, just as a citizen of the state, I don’t think the state should be in the retail business,” he said.
Wineries and breweries should not be treated differently from other sorts of alcohol manufacturers and retailers in the state, Merry said.
“Fundamentally, I find it somewhat unfair,” he said.
The majority of participants in a recent University of Washington poll showed support for the initiative. The poll was conducted via phone calls to 938 registered voters throughout the state by the university’s Center for Survey Research. It revealed greater support for I-1183 than previous results showed for last year’s failed liquor privatization initiatives.
Nonetheless, the jury is still out until Tuesday night, Geiger said.
“It’s certainly a nail biter,” he said. “It’s going to go up until the end. The campaign plan is running full tilt up until the finish line.”