Article by Erik Smith. Published on Friday, November 06, 2011 EST.
Gregoire Opposes Liquor-Store Privatization Measure, but it’s One Way to Keep Millions Flowing – 115 Mayors Sign Letter
See Also: Governor Offers Backhanded Boost to Liquor Campaign – Threatens to Yank Money From Cities and Counties That Initiative Would Save
By Erik Smith
Staff writer/ Washington State Wire
OLYMPIA, Nov. 4.—Mayors are in a boil over the governor’s plan to cancel millions of dollars in liquor money that now goes to local governments, and many are saying she just made the case for an initiative that would shutter the state liquor stores.
In a letter signed by more than a third of the state’s mayors – 115 in all – they call the cuts “intolerable” and “simply unacceptable.” And while the letter to the governor, on the letterhead of the Association of Washington Cities, doesn’t come right out and make the obvious political point, there are plenty of city officials who are willing to do it on their own.
What Gregoire did, they say, is really the big political backfire of the year. The governor says she opposes Initiative 1183, the measure on next week’s ballot that would shut down the state liquor stores and allow booze sales in supermarkets.
But whatever the claims being made about the measure – and there are plenty of them – the measure would keep at least three-quarters of the current liquor-sales money coming to county and city governments. That’s $45.4 million out of the $61.8 million they now get every year. Actually, they might get as much as $75 million, depending on what the Legislature does if the measure passes.
Under the governor’s plan, they get nothing.
“This would be a huge hit on cities, and so we were all a little surprised when she released her proposal,” says Nancy McLaughlin. The Spokane city councilwoman is president of the Association of Washington Cities this year, though she takes pains to point out that her opinion is her own and not that of the association.
Said McLaughlin, “It was her choice to get rid of our state shared liquor revenues, so with that I was going, ‘Go 1183!’ We’ve got to get this thing passed.”
Strategies Got Crossways
The best way to explain it may be that a couple of high-level political strategies got crossways at the governor’s office. For the last month, Gregoire has been campaigning against the liquor measure, claiming that the only way the state makes money under the proposal is if hard-liquor sales increase.
“The only way we get money is if we sell a whole lot more,” the governor told an interviewer for KCPQ-TV. Why, hard-liquor sales might go up threefold or fourfold if booze is sold at supermarkets, she said.
It’s worth mentioning that her own budget office has come to the opposite conclusion. Even if sales remain flat, the Office of Financial Management says revenue for state and local governments would increase $400 million to $480 million a year. And in states like California, where liquor is sold even at the tiniest of gas stations, alcohol consumption is no higher than it is in this state.
By campaigning against the measure, the governor is aligning herself with her traditional allies in labor, a relationship that has become a bit strained during the late economic unpleasantness. The unions have been battling privatization plans for decades – some 1,000 union jobs are at stake in the stores, and another 100 at the state liquor warehouse in Seattle.
But here’s the problem. At the same time that Gregoire has become a leading spokeswoman against the measure, she also is setting the stage for one of the more brutal legislative sessions since the Great Depression. When lawmakers return to town Nov. 28, they must cut $2 billion in spending, after making whopping cuts over the last three years that didn’t leave any fat behind. The governor released a budget-cut plan a week ago that may be aimed at provoking a tax increase – seemingly every program for children that could be cut was cut, right down to state funding for the yellow school bus.
The scream-o-meter is already rising, and one of the biggest yelps is coming from city and county governments. The cities and counties have proven effective forces in moving public opinion in the past, whenever they stand united. Under the governor’s plan they stand to lose a total $91 million. Two-thirds of what the governor proposes to take is liquor money, which has been split between the state and local governments ever since the liquor stores were established in the wake of Prohibition.
The political calculation didn’t figure on one thing: I-1183 offers them an alternative.
Position Stunned Mayors
Bothell mayor Mark Lamb said he was stunned when the governor proposed slashing the liquor revenues in the $2 billion budget-cut proposal she released last Thursday. He counts himself a supporter of I-1183, and so perhaps he was watching this one a little more closely than most. But the governor’s position is baffling, he said.
“I was extremely surprised, because frankly it makes the case for 1183,” he said. “The status quo, prior to the governor’s proposal, was to share revenue. One could argue back and forth about which was better. But I think 1183 is unquestionably better, given the governor’s proposal. I think the governor’s budget is a mistake. At this point, the only option you have is passage of 1183.”
Bothell hasn’t run the numbers yet, but under the governor’s plan, the city stands to lose hundreds of thousands of dollars, Lamb said. Meanwhile in Spokane, they’ve checked the numbers – Gregoire’s plan means a $2.5 million hit, McLaughlin said.
That’s at a time when the city faces an $8 million shortfall of its own next year.
Cities are Squeezed
Cities are frustrated, McLaughlin said, because the Legislature has proven reluctant to consider legislation that might get at the heart of their problems. Union-backed collective bargaining procedures are one of the biggest cost-drivers they face. Last year the cities backed a bill that would have tweaked binding-arbitration rules for firefighters, she said. That one went to the Senate labor committee, where it died a quiet death.
“Everybody’s tenderfooting their way around this, and we are trying to be so careful, but the fact of the matter is that when you look at the issue squarely, it is personnel costs that have been driving up out general fund costs. Our general fund has been going up approximately 6 percent a year while our revenues are only going up about 4 percent a year. That structural gap is the personnel costs. We can’t seem to get them under control, because of our lack of ability to bring public-sector wages and benefits more in line with the private sector. So we’ve been told, basically, that in this next election year, this is not going to be a year they’re going to deal with it. I think cities are going to get more and more squeezed.”Your support matters.
Public service journalism is important today as ever. If you get something from our coverage, please consider making a donation to support our work. Thanks for reading our stuff.
