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Liquor Measures Stir Concerns

Initiative on Nov. 2 ballot

By JESSE BURKHARDT

The Enterprise

Two statewide initiatives that will appear on the Nov. 2 ballot have local government officials worried.

If they pass, it appears that already hard-pressed cities and counties will see yet another hit to their budgets.

The ballot measures -- Initiative 1100 and Initiative 1105 -- relate to the sales of hard liquor, which in the state of Washington is handled through state-licensed liquor stores.

In short, I-1100 would allow any current retailer with a beer and wine grocery store license to sell liquor.

Here is the official description of I-1100, as prepared by the Washington Secretary of State: "This measure would direct the liquor control board to close all state liquor stores; terminate contracts with private stores selling liquor; and authorize the state to issue licenses that allow spirits (hard liquor) to be sold, distributed, and imported by private parties. It would repeal uniform pricing and certain other requirements governing business operations for distributors and producers of beer and wine. Stores that held contracts to sell spirits could convert to liquor retailer licenses."

I-1100 supporters contend that state government should not be in the business of selling liquor, as liquor sales are not an essential state service. Sales are best left to the private sector, they say. Supporters also contend that over more than seven decades, state government officials have at times artificially raised prices to bring more revenue for the state.

Initiative 1105 is very similar to I-1100. Here is the official description of I-1105, as prepared by the Washington Secretary of State: "This measure would direct the liquor control board to close all state liquor stores and to license qualified private parties as spirits retailers or distributors. It would require licensees to pay the state a percentage of their first five years of gross spirits sales; repeal certain taxes on retail spirits sales; and direct the board to recommend to the Legislature a tax to be paid by spirits distributors. It would revise other laws concerning spirits."

Washington Citizens for Liquor Reform, a key group supporting I-1105, believes the state of Washington shouldn't be in the business of selling liquor.

"Only seven other states control liquor sales the same way as Washington state, based on fears that date back to the days of Prohibition," reads a statement on the group's Web site. "The Washington State Auditor issued a report in late 2009 concluding the state could realize hundreds of millions of dollars in new revenue and reduce expenses if the state were to privatize spirits sales in Washington."

Despite those rosy claims, however, some powerful organizations see it quite differently and are lining up against the two measures. In September, the Olympia-based Association of Washington Cities (AWC) released a lengthy critique of the potential impacts of the measures. AWC pointed out that passage of the initiatives would "impact a significant revenue stream for cities, counties, and the state."

In White Salmon, a downtown business owner has a direct stake in the outcome of the upcoming election.

Roger Miller, the longtime owner of the state's liquor distributor in White Salmon -- Miller Sports -- said his livelihood is up in the air depending on election results.

"Of course I'm biased, because it's my business. And if that passes, I may not be in business," Miller explained.

Miller added that he believes the state has done a good job of running liquor sales across the state. And he pointed out that the county gets about $140,000 a year from state liquor tax revenues, while White Salmon gets about $30,000.

"With these economic times, to take that away would be another blow to try to run government," Miller said. "Plus, do people want liquor in every store, where minors have more of a chance to purchase it?"

Another factor to consider, Miller said, is that there is no guarantee liquor prices will drop significantly if these measures are approved by voters.

"Taxes on liquor are still going to be there," he said.

During the Sept. 15 meeting of the White Salmon City Council, city officials were directly warned about the possible impacts of the measures.

"If these initiatives pass, it's going to reduce the city's revenue by $25,000-$30,000 annually," said White Salmon City Administrator Pat Munyan. "That is money that goes in to the general fund for police and fire services."

Munyan also pointed out that I-1100 would remove funding for enforcement of state liquor laws.

"Coupled with the fact that the city of White Salmon has one liquor sales outlet under the current system and it could possibly increase to six outlets with the passage of either initiative -- there would undoubtedly be an impact on our local law enforcement," Munyan explained.

Munyan added that the state enforces compliance with restrictions on sales to intoxicated customers or to underage drinkers.

"If the state fails to fund the enforcement program, it will fall to the city of White Salmon to make sure all of the additional liquor outlets and existing restaurants and taverns comply with Liquor Control Board regulations," he said. "It is reasonable to assume that if these compliance measures are not kept up, White Salmon could see an increase in DUIs, public intoxication, and underage drinking -- which in turn could be more of a drain on local law enforcement. It is also projected that it would cost us $56,000 more in law enforcement costs to maintain what the Liquor Control Board does now."

In 2008, the city of White Salmon received $14,835 in liquor profits and $10,565 in liquor excise taxes.

"In other words, we would lose $25,000 in revenue and pay $56,000 more in expenses," said White Salmon Mayor David Poucher.

Council member Anthony Coulter said he wanted to see a commentary from the city published in the local newspaper to make sure voters are informed about the two measures and know what's at stake in the election.

"This is communication with the electorate, and we need to enthusiastically support that," Coulter said.

A motion to support printing a letter was approved 4-1. Council member Richard Marx voted in opposition.

"The motion on the table was to tell the public that if these initiatives pass, the city would cut services and I voted no on that motion," Marx explained. "I think this all has to do with the fact that the city plans on raising the local B&O tax, or maybe the local sales tax."

Marx said he saw the two measures as a tax issue.

"I'm all for tax cuts," Marx said. "If this cuts the city budget, that means the city has to learn to live within the revenue it has. The city is always spending money they don't have. All cities, including White Salmon, need to live within their means."

Poucher said he thought it would be illogical for the city's voters to support the initiatives.

"When you stop and think about, this is an $80,000 hit for the citizens of White Salmon, in exchange for a couple dollars off your liquor purchase. I'm just asking people to think about it. This adds more expense to the city with no revenue coming in; it's a double whammy."

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