October 30th, 2011

Editorial

Initiative 1183 – privatizing liquor sales and distribution

Initiative Measure No. 1183 concerns liquor: beer, wine, and spirits (hard liquor).

This measure would close state liquor stores and sell their assets; license private parties to sell and distribute spirits; set license fees based on sales; regulate licensees; and change regulation of wine distribution.

For the last few years, Costco has sponsored initiatives to privatize liquors sales and distribution. I’m generally in favor of the idea, but have opposed the specific measures in the past, and I oppose I-1183 as well. But it won’t break my heart if it passes either.

State Liquor Store
State Liquor Store, 1971

Right now beer and wine can be sold in private retail stores in Washington. Hard liquor is sold only from restaurants, bars, and retail stores run by the Washington State Liquor Control Board. I believe the hard liquor monopoly is a remnant of prohibition. I-1183 directs the state to sell any assets related to liquor sales or distribution. In practice this will mean that the stores will be closed, because another item in the measure limits sales to stores with 10,000 square feet. In other words, grocery stores and big box discount stores.

The measure does not eliminate the three tier system for distribution though; we’ll still have producers, distributors, and retailers. But some companies will be allowed to be their own distributors, bypassing the middle man. That means places like Costco can sell liquor more cheaply. Which is something I’d be fine with, but it will probably freeze out small producers from the largest sales channel in the state. Right now they have a better opening into the distribution system. I don’t know where I come down on that. I’d like small producers to survive, but I don’t agree with doing it by monopoly power and price fixing.

I-1183 will raise revenues for the state, from $5 million to $8 million in 2012, and $35 million to $42 million in 2017, depending on assumptions. Local government revenues increase as well. These are the numbers the state came up with. The No On 1183 campaign likes to portray this as a tax increase and therefore bad. People don’t have to buy hard liquor, so it doesn’t bother me much.

Where my opposition comes though is that liquor will more or less only be sold in grocery stores. My ideal privatization measure would sell off the stores to be operated privately. Or allow private companies to open competing liquor stores. But spreading liquor sales into groceries worries me.

So my vote is a weak no.

crossposted from King Rat.

Editorial

SJR 8205 – Presidential voting residency requirements

SJR 8205 – removes Article VI, Section 1A of the Washington Constitution.

This amendment would remove an inoperative provision from the state constitution regarding the length of time a voter must reside in Washington to vote for president and vice-president.

This one is pretty much a no-brainer. But before I explain why, here’s the provision which will be removed if this passes:

SECTION 1A VOTER QUALIFICATIONS FOR PRESIDENTIAL ELECTIONS. In consideration of those citizens of the United States who become residents of the state of Washington during the year of a presidential election with the intention of making this state their permanent residence, this section is for the purpose of authorizing such persons who can meet all qualifications for voting as set forth in section 1 of this article, except for residence, to vote for presidential electors or for the office of President and Vice-President of the United States, as the case may be, but no other: Provided, That such persons have resided in the state at least sixty days immediately preceding the presidential election concerned. The legislature shall establish the time, manner and place for such persons to cast such presidential ballots.

Basically the deal is that at the time, the 60 day requirement was much more lenient than the normal residency requirement for voting in Washington. However, the Supreme Court invalidated all laws that establish a residency requirement that’s greater than 30 days for presidential elections. And now we just have a 30 day requirement anyway. So why not clean this provision up?

I’ll be voting for it. Even if it wasn’t inoperative, I’m in favor of making voting easier.

crossposted from King Rat.

Editorial

SJR 8206 – increasing the amount going into the state rainy day fund

SJR 8206 – A constitutional amendment on the budget stabilization account maintained by the state treasury.

This amendment would require the legislature to transfer additional moneys to the budget stabilization account in each fiscal biennium in which the state has received extraordinary revenue growth, as defined, with certain limitations.

There are two ways to smooth out revenue fluctuations from year to year. One of them is to borrow from the future, which is what the federal government does. However, the state constitution requires a balanced budget and getting that changed isn’t politically doable. The other way is to put money away, to be drawn down when times are bad. That’s how Washington State currently does it. (Some states don’t do it at all.)

The rainy day fund is currently about $300 million. The revenue shortfall is about $2 billion. In other words, the rainy day fund turned out to not be large enough. Not even close.

This amendment requires that, if the state has growth that is more than 33% above the 10 year growth rate, the amount above that be put into the rainy day fund. In other words, don’t spend as much money when times are really flush and story it away. We currently save 1% of our revenues, and this won’t change that. It only adds additional saving for flush times.

The no argument is that we should spend that money on needed services instead. And while that is an attractive argument, we’d have to cut off those programs a few years later during the next recession. I’d rather us have sustainable programs.

And it’s much preferable to save the money than rebate taxes. That doesn’t prepare us at all for the next recession.

I’ll be voting for this amendment.

crossposted from King Rat.