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Originally published Wednesday, June 15, 2011 at 8:17 PM

State moves closer to privatizing liquor

Gov. Chris Gregoire signed a bill Wednesday opening the door to privatizing the state liquor wholesale-distribution system, but said she doubts any decision would be made until after the November election. That's a key point because supporters of an initiative that would get the state entirely out of the liquor business have accused the Legislature of attempting to undermine their measure, which they hope to put on the November ballot.

Seattle Times Olympia bureau

quotes What is the state doing in the retail business? The state doesn't sell us food, or... Read more
quotes I want Massachusetts style Liquor Super Stores, and I don't even drink alcohol, I only... Read more
quotes The state has no business being in the business of selling liquor. Read more

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OLYMPIA — Gov. Chris Gregoire signed a bill Wednesday opening the door to privatizing the state liquor wholesale-distribution system, but said she doubts any decision would be made until after the November election.

That's a key point because supporters of an initiative, I-1183, that would get the state entirely out of the liquor business have accused the Legislature of attempting to undermine their measure, which they hope to put on the November ballot.

I-1183 supporters asked the governor to veto an emergency clause in Senate Bill 5942 that allows the state to expedite its efforts. Gregoire did not.

The legislation requires the governor's budget office to solicit competitive bids to lease the state liquor warehouse and wholesale distribution system, but the state would retain control over retail liquor stores.

If there's an acceptable bid, the state Liquor Control Board can grant a contract. The board is appointed by the governor.

When asked if she could rule out getting a contract done before the November election, Gregoire said it would likely take until the first of the year to get through the vetting process outlined in the legislation.

"I'm telling you I can't see having a contract" before the election, Gregoire said, "but I've learned never say never."

The bill's emergency clause precludes a referendum and lets Gregoire's budget office start work immediately. The governor said that vetoing the emergency clause could have pushed the process toward the end of March "and potentially too late for the Legislature to do anything in a short session."

Critics of the measure said the emergency clause showed lawmakers wanted to get a contract signed quickly to undermine I-1183.

"There's no reason to have an emergency clause on that bill," said Joe Gilliam, president of the Northwest Grocery Association, which backs I-1183 along with others, including Costco.

"They shoved this into the mix and put an emergency clause on it in order to confuse people about the initiative out there," he said.

I-1183 would privatize the entire state liquor system, including retail stores.

Supporters say it would bring in $200 million from the sale of assets and millions more by requiring stores with liquor licenses to turn over a certain percentage of their gross liquor revenue to the state each year. Licenses would be limited to larger stores.

Sen. Joe Zarelli, a prime sponsor of Senate Bill 5942 and the ranking Republican on the Senate Ways and Means Committee, also said he didn't expect a contract to be ready to consider until the end of the year, well past the election.

"There's been no attempt to try to get something done before the election," he said, calling the critics' assertions "hogwash."

The legislation gives the governor's budget office 120 days to solicit and review bids. After consulting with an advisory council it can decided whether to recommend an offer to the Liquor Control Board. There's additional time built in for legal challenges and review by lawmakers.

Marty Brown, the governor's budget director, said: "If anybody thinks we're going to game the system, think again. This is a contract. This is request for proposal. You have to play it all the way along by the rules or it doesn't work."

It's not clear what would happen if voters were to approve an initiative privatizing the state liquor system while the state was still considering bids.

House Ways and Means Chairman, Ross Hunter, D-Medina, said he thinks the state process would be dead, at least politically.

"I think this thing would die on the vine if voters approved the initiative," he said.

Andrew Garber: 360-236-8266

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