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Published on Friday, September 28, 2012

Looking at the impacts of liquor privatization

On June 1, 2012, private retailers began selling liquor as a result of the passage of Initiative 1183. Many cities remain concerned about the impacts on public safety and underage drinking.

For the first three months of privatization, the Liquor Control Board (LCB) reports compliance rates of over 90% at stores they have checked. However, according to the LCB, the issue seems not to lie with clerks and sales personnel selling, but with the patrons who are using a variety of methods to steal the products.

AWC recently surveyed police chiefs to find out more about local experiences and impacts related to liquor privatization. Here’s what they said:

  • 63% report an increase in liquor theft.
  • 30% report an increase in alcohol related crimes near grocery stores.
  • 40% said they needed more officers for liquor enforcement and alcohol-related crimes.
  • 25% said they needed more support for liquor enforcement from the Liquor Control Board.

AWC will continue to monitor and report on the impacts of liquor privatization.

How much liquor revenue will my city receive going forward?

AWC continues to receive questions about how much liquor revenue cities will receive. We are in the process of updating estimated liquor revenue by city and will post that information as soon as it is available.

City liquor revenue is decreasing as the result of ESHB 2823, which passed in the early morning hours of the final day of session. ESHB 2823 directed existing state revenues from the Liquor Revolving Fund and the Liquor Excise Tax Fund into the state general fund. Specifically impacting cities:

  • Liquor Excise Taxes – In fiscal year 2013, all liquor excise taxes that would normally be deposited into the Liquor Excise Tax Fund for distribution to local governments will be deposited into the state general fund. Beginning in fiscal year 2014, and every year thereafter, quarterly distributions from the Liquor Excise Tax Fund of $2.5 million will be made to the state general fund. This is a permanent diversion of $10 million per year for cities and counties.
  • Liquor Revolving Fund – Beginning July 1, 2012, the distributions to cities and counties from the Liquor Revolving Fund are modified. Instead of distributing moneys to cities and counties by a formula based on amounts deposited in the Liquor Revolving Fund, distributions will be made as provided under Initiative 1183 (revenue of a “comparable period” plus $10 million per year for public safety purposes). Any revenue remaining in the Liquor Revolving Fund will be permanently distributed to the state general fund.

The permanent diversion of the liquor excise tax and liquor revolving fund revenues is distressing, and AWC will be working to have these revenues restored in the 2013 legislative session.

Categories: Law & justice, Liquor