Costco is trying to fix a liquor problem that doesn’t exist

THE OLYMPIANOctober 26, 2011 

The campaign led by Costco this year to place on the ballot a modified version of last year’s failed I-1100 to privatize liquor sales evidently set a record for most signatures ever gathered in the shortest span of time and last week set a record for the largest war chest ever assembled.

Of course, the citizens of our state would have been better served had Costco instead channeled its energy and signature hawking into something worthwhile.

Hands down, my choice for resuscitation would have been last year’s I-1098, promoted by Bill Gates Sr., where voters missed a chance to impose a state income tax on individuals with adjusted gross incomes of more than $200,000 per year, while reducing other taxes.

Sigh. In the real world, corporate and liquor interests have nothing to gain by that, putting the likelihood of it happening on par with the pope’s conversion to Scientology.

Granted, Costco Wholesale Corp. compensates its employees decently, relative to many of its competitors, and has thus earned my business. Still, like any other corporation, it is driven by what benefits its shareholders more than by what benefits society.

Costco has kicked in $22.5 million cash and in-kind donations, the largest sum for a ballot measure in state history, according to the Public Disclosure Commission, overtaking the $16.7 million contributed by the American Beverage Association in support of I-1107, a measure voters approved last year to repeal tax increases on candy, gum, bottled water and soda pop.

I-1183 would close the state’s 328 liquor stores and privatize its distribution system, permit large retailers to sell liquor and allow them to bypass distributors by buying directly from distilleries. Retailers too small to qualify for a license under the proposal oppose the measure, as do distributors. As of last week, the No on I-1183 campaign had amassed $11.7 million, mostly from wine and liquor intermediaries.

Exaggerated claims by opponents recall to mind the failed initiative attempts in the 1970s to bring greyhound racing into the state. “Don’t let poor Spot die,” TV ads were bankrolled primarily by horse-racing interests.

Proponents of I-1183 say the measure will increase revenue to the state because it adds a key provision missing from I-1100. To wit: in lieu of the state markup, the measure creates new state fees which, for retailers will be 17 percent of sales and 10 percent for distributors.

The Office of Financial Management evidently backs up their claim, forecasting an average annual increase of $42 million for state and $38 million for local governments, if adopted, hardly a blip toward solving the state’s $2-billion budget shortfall.

The No on I-1183 forces counter with a weak rebuttal that consumers, in effect, will pay an added 27 percent tax on spirits.

If it helps maintain adequate police and fire protection, and gives more children access to health care, I’m for the state squeezing revenue from liquor to the last conceivable drop. Whether you call it a fee or a tax, if you don’t purchase liquor, then you don’t have to pay it.

In weighing the pros and cons, however, I must ask what good can possibly come out of making purchases of hard liquor easier and/or less expensive. Moreover, what’s wrong with the state control we’ve had in place since the end of Prohibition?

My response to both questions is an emphatic nothing and that’s why I am voting no on I-1183.

Had I been the brains behind the No on I-1183 campaign, the pitch would have been, “It ain’t broke, so why fix it?”

David Rupel is a retired systems consultant with DSHS. A member of The Olympian’s Board of Contributors, he can be reached at

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