The Time is Now. This Stay-at-Home Mom is officially involved.

Thursday, October 28, 2010

I-1100 and I-1105---thoughts?

I'm sorting through our almost record number initiatives here in Washington state and am wondering what you're thinking. My question with I-1100 and I-1105 is whether or not this is a MORAL issue or a GOVERNMENT MONOPOLY issue. For most, I doubt this is a moral issue, but for me personally, as one who does not consume alcoholic beverages, I'm trying to decide if my moral stance affects my choice. 

Here are some facts about I-1100 and I-1105 (as I see them...)

  •  Our state has a monopoly on the sale/price and distribution of hard liquor.
  •  Currently, the state sets the price of hard liquor by two facets: markup and taxes. Last year, rather than increase taxes on liquor, they chose to increase the markup (from 39.2% to 51.9%), to allow greater generation of tax revenue. Either way, the government holds all the cards.
  • Private businesses would love the opportunity to sell liquor, which is what I-1100 would allow. Should 1100 pass, businesses would apply for a general liquor retailer's license, meet the requirements, pay the fees, and be in the game.
  • Costco and Safeway have contributed millions to this campaign. Most supporters are private businesses knowing they could expand and grow their companies with the addition of hard liquor to their inventories.
  • Opponents of I-1100 express concerns with safety, foreseeing that if prices become cheaper, which is inevitable, people will drink more and children will be able to get their hands on liquor easier. 
  • Smaller liquor producing businesses believe they will be forced out of the business altogether because they will not be able to compete with the volume discounts larger retailers will receive.  
  • I-1100 provides a timing window to close the state-run liquor stores and authorize the operation of new privately managed liquor stores.
  • Opponents of I-1100 are obviously concerned about the loss of revenue, which would provide a gap for our state....but this is where I-1105 comes in. 
  • I-1105 directs the state legislature to create a "new tax on the sale of spirits to spirits distributors." AKA...bring in the middle man.  
  • I-1105 also requires contracting retailers to pay the state 6% of their gross annual spirits sales during the first five years of sales. 
  • Between a new tax code and the retailers paying 6% of gross sales, I-1105 states the revenue to the government must at least stay the same, plus add an additional $100 million over a net 5-year period.

A SUMMARY OF REESE'S THOUGHTS:

As a conservative thinker, I love the idea of taking the government out of most anything. A bureaucratically-run "business" is usually not run very efficiently. What's in it for the government to cut costs when they can simply raise taxes and/or markups? Private businesses must sell at a certain profit level and manage their costs enough to make the sale worthwhile. I want private businesses to grow, which in turns add jobs. Sure, state-run liquor stores will close, but how many more private jobs will be created? All without taxpayers footing the bill.
  
On the other hand, as a non-drinker, do I really care/want liquor to become cheaper? Do I care that hard liquor may be more visible as I take my daughters to the grocery store with me? As of now, we usually just avoid those aisles. My children are well aware about my choice of not drinking alcohol and it's not something we revisit weekly. I doubt I will ever point out the distinction between wine vs. beer vs. liquor in terms of one being "better" than the others. They are all off-limits in my book.

Do I think liquor will become more accessible to minors if 1100 and 1105 pass? Not really. Retailers are still on the hook not to sell to minors, lest they lose their license. And as proponents of 1100 point out, without a monopoly to run, the State Liquor Control Board can focus on just that...control and enforcement. 

Initiative 1105 makes it necessary to adjust the tax code to maintain the existing revenue stream to the state (plus a little extra). So as far as the government feeling a pinch, I-1105 makes it so that won't happen. 

So, I'm leaning to Yes to I-1100 to take the government out of the business of selling liquor, and Yes to I-1105 so that taxes are still a big part of the equation. I am a believer that taxes influence choice and just like I don't mind cigarettes being expensive, I won't mind if liquor continues to be on the pricier side. Prices and taxes mold behavior in all facets of life.

So what are your thoughts on these two initiatives???  

Sources:
State of Washington Voters' Pamphlet Guide
King5 News Up Front with Robert Mak, Voters Guide

2 comments:

  1. I have been on the fence too..over these exact same things. I think I am leaning the other way on I-1100. We have had a lot of press from the police/fire stations opposing this initiative on grounds of increased sale to minors and a rise in drunk drivers. That scares me. I think theft will be more prevalent too in stores like Safeway. I just don't like the idea of hard liquor being so accessible. But then I HATE government run entities too for the exact reasons you stated. This is a tough one, I agree.

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  2. Another aspect to consider is that if the government doesn't benefit from the "monopoly", where are they going to try to make up the funds lost if they have to turn over the state run liquor stores? How much money are we talking about, and will I-1105 be enough? Where else will they try to replace the lost revenue?

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