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Dozens of mayors have signed a letter that the Association of Washington Cities plans to send the governor as early as today. The group said about 50 mayors and counting have signed on. Tacoma’s Marilyn Strickland and Olympia’s Doug Mah are among those who planned to sign.
Gregoire said last week that as falling revenue forced her to recommend ways for the Legislature to cut $2 billion – by slashing school districts and colleges and cutting off services that help the poor, elderly, disabled and mentally ill – she can’t afford to keep sharing state liquor revenue with local governments.
Cities and counties say the arrangement dates to the end of Prohibition and that the $62 million they stand to make from it in 2013 will be even more necessary as they react to state cuts that hit public safety and mental health.
“We’ll start to see those issues show up on our streets,” Mah said.
“I’m hopeful that all of the mayors around the state will sign on to (the letter) as well, because we’re all facing budget challenges right now,” Strickland said Tuesday, hours after hearing city officials explain the city might have to lay off 130 employees.
The wild card in the debate is Initiative 1183, the liquor-privatization measure voters could approve Tuesday.
PROTECTIONS IN LIQUOR MEASURE
I-1183 would replace the state’s marked-up prices on hard liquor with new fees that would go to state and local governments. It would require that cities and counties receive no less revenue from the fees than they received from state profits.
It’s a way to guarantee local governments that the measure won’t hurt them, and in fact they stand to gain – at least $57 million in 2013, Gregoire’s budget office says.
It also could blunt the impact of any cuts by lawmakers. The way the budget office figures it, state government could still choose to grab all new revenues from the I-1183 fees – except for $10 million the measure requires be spent on local public-safety programs – and would end up with even more than the governor has proposed taking. But the current amount that flows to local governments from profits would be protected.
The initiative doesn’t touch the 20.5-cent sales tax on liquor and the additional $3.77-per-liter tax. Those would be fair game for lawmakers to take.
And they could take the fee revenue if they could summon two-thirds majorities, but Senate budget chairman Ed Murray said that seems unlikely.
‘PRETTY BIG’ PUSHBACK
The Legislature cut local government’s shares of several revenues this year, including liquor taxes and profits, by 3.4 percent. Cities didn’t complain loudly after beating back an effort to take even more.
They might defeat this one, too. Every lawmaker has a city and a county government in his or her district, of course, and many once were local officials themselves.
“The pushback from local governments on legislators is pretty big,” said Murray, a Democrat who said he would consider cuts to local shares of liquor revenue. “Obviously we need to look at how we can fund state services, so everything has to be looked at.”
Everyone should share the burden of the cuts, whether it’s local governments or college students paying tuition state employees paying more for health insurance, Murray said – but he added the local officials also make a good argument for why they should keep the money.
Gregoire hinted that some local governments are in better shape than the state when she told reporters last week that cities and counties have hired away state employees, even as the state has shrunk its work force.
Officials in Pierce County, for one, dispute that they are better off. County Executive Pat McCarthy’s proposed general-fund budget for 2012 would spend $12 million less than what the county spent in 2008, before cuts began, her office said.
“To say that local government in general is well-off and the state is not, is not a fair picture at all,” said George Walk, who lobbies for Pierce County in the Legislature.
While Tacoma has avoided layoffs, that’s likely to change with the city’s falling budget predictions. A tentative plan to close the city’s more than $26 million budget gap calls for about 130 layoffs.
Pierce County brought in $2 million in liquor revenue in 2011 and Tacoma raised $2.5 million, with both now projecting slight declines next year. Now they’ll wait for the legislative session starting Nov. 28 to see how much they’ll keep.
“When the feds shift to the state and the state shifts to local governments,” said Randy Lewis, who lobbies for Tacoma, “we don’t have anybody to shift to.”
Jordan Schrader: 360-786-1826
jordan.schrader@thenewstribune.com
