99% will pay the price for I-1183 liquor privatization

By Brendan Williams

Passage of Initiative 1183 would represent another smashing victory by the 1% over the 99%.

The liquor privatization campaign is cloaked in deception snake oil salesmen of the past could only admire.

Consider just one ad running on the Internet: Showing a grinning police officer and a happy teacher, it promises I-1183, “Provides more funding for Schools, Health Care and Public Safety.”

In public forums, I-1183 spokespeople reinforce that claim – even bringing revenue projections for the cities they’re in.  I-1183, we are told, is the solution to all that ails government budgets.  Close your eyes and vote yes!

Really?

The state’s shortfall for the current budget may be as high as $2 billion, on top of over $10 billion in cuts since 2008.  How much would I-1183 bring in to address this crisis? Between $5.4 million and $8.8 million in 2012.  To put that in perspective, Costco has already spent much more just to pass I-1183 (Costco members recently received notice of a fee increase).

Furthermore, new revenue projections are based upon liquor becoming more expensive – with the state’s current 51.9% markup being replaced by a private one of 52-72%.  The corporate Washington Research Council assumes it will be 62.5%.  It’s all the more jarring considering the state’s markup is scheduled to fall to 39.2% in 2013.

In other words, only if customers – “the 99%” – pay more to inflate Costco’s profits will the state realize a return. Even then, it would be less than 1% of the size of the latest revenue shortfall.  And remember, the state’s lower markup not only sustains the state budget but also pays living wages to those working in state-run stores.

Ignoring these facts, the I-1183 campaign both promises new revenue and claims liquor will be cheaper.  That’s impossible.

This isn’t the first time some have tried to exploit liquor for personal salvation.

A forgotten aspect of Prohibition, memorably described in Daniel Okrent’s Last Call, is the role of the rich in funding repeal efforts.  Wealthy magnates like Pierre S. du Pont hoped excise tax revenue from liquor would reduce their income taxes.  When President Franklin D. Roosevelt disappointed them, they founded the Liberty League to defeat him – du Pont regretted not trying to repeal the income tax amendment to the Constitution instead of Prohibition.

I-1183 promises something similar.  If the middle class and poor pay more for liquor, it may spare the rich from real, progressive tax reform.  Ignore the elephant in the room – look at the mouse instead!

Perhaps not surprisingly, the phony I-1183 revenue message is being spread by the spokesperson who represented tax repeal initiative I-1107 last year.

In other words, the same woman who blew a $108 million hole in the state budget for next year alone is, effectively, promising to buy it back for as little as $5.4 million.

Smiling police officers?  I-1107 takes $23.4 million from local governments and public safety next year – I-1183 may bring back as little as $6 million for local governments in 2012 (more than consumed by extra DUI and aid calls).

A reeling state government has proposed ending alcohol and substance abuse services for all adults except for pregnant or parenting women – a $97 million cut.  I-1183 would just add to that misery.

Intoxicated by the prospect of new liquor advertising revenue (lucre from liquor!), newspapers have largely ignored these facts.  Instead they have swallowed attacks the I-1183 campaign has made on liquor and wine distributors’ “self-interest” (as if Costco and anti-union grocer Trader Joe’s are acting without self-interest).  In so doing, they ignore all the other casualties of I-1183.

Those casualties include family wineries – in a state full of them – that would be flattened like grapes in the first crush.

Northwest distilleries would be pushed off shelves by various Kirkland Brand liquors or Wal-Mart’s French-outsourced vodka brand Rue 33.

Other casualties would include wine shops that can’t compete with big box store “pay-to-play” deal-making, as well as mom-and-pop liquor contract stores in rural areas that, like one in Yelm, would suddenly have a liquor-selling Wal-Mart down the street.

But forget about what’s good for you and all your fellow “99-percenters.”  It’s all about the 1% and making the rich richer, right?  And when I-1183 fails to deliver on all of its promises of budgetary salvation will it be Costco that’s blamed?  No, it will be the politicians.

Brendan Williams is a former State Representative from the 22nd Legislative District.