A new budget plan released by Democrats in the Washington State House of Representatives includes a proposal to privatize the wholesale distribution of liquor in the state, while retaining state control of retail sales through its liquor stores. The budget predicts that the state would receive $300 million upfront to help close a deficit of $5.3 billion in the next biennium.
Under the proposal, the state would lease out, for 20 years, the wholesale distribution side of the liquor business in a competitive bidding process. The state would get $300 million up front, then annual payments and profit-sharing after that. Proponents say the increased efficiencies from private sector distribution could actually increase the amount of money coming back to the state through taxes and markup on retail sales, which the state would still control by operating liquor stores.
State Treasurer Jim McIntire is not yet sold on the idea. “That liquor privatization piece looks like a work in progress. What I’ve seen so far doesn’t work,” McIntire told seattlepi.com. “You have to make sure you’re getting a good deal with public-private partnerships.”
We will post updates about the alcohol sales plan on this blog. When two initiatives for liquor privatization were on the state ballot last Fall, ADAI prepared a Resource Brief on Privatization of Alcohol Sales, with links to reports, news items, and literature about the potential health and social impacts of private versus state controlled alcohol sales.
Sources: Treasurer, bars balk at liquor privatization plan (Chris Grygiel, seattpepi.com ); Distribution securitization/privatization hybrid? (Austin Jenkins, NW News Network); House Dems outline plan to close $5 billion state budget shortfall (Andrew Garber, Seattle Times)