I-1183

Be Careful What You Wish For?

After nearly 80 years of State control, the voters of Washington have decided to privatize liquor sales. As the implementation of I-1183 begins, questions start to arise. Will liquor be cheaper? Doubtful, as the current 10 different taxes remain and 1183 adds two new ones. In addition to that, distributor and retailer margins will more than replace the current State markup. Will selection increase? Again doubtful as most retailers will focus on the fastest moving sellers. Will cities and counties be financially impacted? The City of Kent is estimating a reduction in liquor tax revenues of  $400,000.

1183 created a new 10% tax on sales by a distributor with a requirement for that tax to generate $150 million by 2013. If it does not, and estimates show that it could be as much as $100 million short, the distributors must pay the difference based upon their share of the market. Ultimately, who will actually pay that? The consumer of course.

There have been lawsuits filed and there may be more. The most compelling argument is that Initiatives by State law must only address one issue. 1183 changes many laws that influence the distribution and sales of liquor and wine. Meanwhile, June 1 is almost here. It has been said by many that 1183 simply replaces a State monopoly with a private one dominated by Costco. Speaking of Costco, a recent chance discussion with a corporate employee revealed that they are not happy with the final version of 1183!!??

As much as we complain about the legislature, most of the laws they pass go through a rigorous process. Initiatives circumvent that process and are usually supported by special interest money. They often have unintended consequences. Time will tell.

Kevin Danby

Ephrata