For people looking to understand Initiatives 1100 and 1105 on the November ballot in Washington State, in the next series of posts I will attempt to summarize relevant background information. While I have tried to make the information as accurate and succinct as possible, the details of these initiatives are quite complicated. Beware people who say otherwise. Posts are broken up as follows:
Part I: Initiative Titles, How We Got Here, and a Quick Summary of Initiatives 1100 and 1005: ‘Initiative Titles’ states what voters will be reading on their ballots. ‘How We Got Here’ discusses how these initiatives got on the ballot in the first place. ‘Quick Summary of Initiatives 1100 and 1105’ gives a quick overview of similarities and differences between these initiatives.
Part II: Initiative 1100 Breakdown: Gives an in-depth look at Initiative 1100.
Part III: Initiative 1105 Breakdown: Gives an in-depth look at Initiative 1105.
Part IV: Other Issues to Consider: Discusses other issues of relevance and gives some summary thoughts. Without further ado…
In the Crucible – Boiling down Initiatives 1100 and 1105: Part I of IV
This is what voters will be reading on the November ballot.
“Initiative Measure No. 1100 concerns liquor (beer, wine and spirits). This measure would close state liquor stores; authorize sale, distribution, and importation of spirits by private parties; and repeal certain requirements that govern the business operations of beer and wine distributors and producers.”
“Initiative Measure No. 1105 concerns liquor (beer, wine and spirits). This measure would close all state liquor stores and license private parties to sell or distribute spirits. It would revise laws concerning regulation, taxation and government revenues from distribution and sale of spirits.”
How did we get here
Initiative 1100 – Six years ago, Costco, which is responsible for the lion’s share of the funding for Initiative 1100, sued Washington State on the grounds that its alcohol system violated federal antitrust laws. Among a long list of aims, Costco looks to eliminate state liquor stores and dismantle the three-tier distribution system.
A federal judge sided with Costco in 2006; a federal appellate court subsequently sided with the state two years later. With both the Washington State legislature and the Supreme Court unlikely to take up the matter up, Costco went to the initiative process to try to make the legislative changes it is looking for.
Initiative 1105 – Initiative 1105 was created in response to Initiative 1100. The initiative was initially promoted by Washington Beer and Wine Wholesalers. Like Initiative 1100, 1105 would privatize liquor sales and distribution. However, it retains the three tier distribution system.
Suffice to say that numerous companies and municipalities across the country are watching these initiatives closely – and throwing around a lot of money one way or the other – anticipating that what happens here may set a precedent for laws in their states.
Quick Summary of Initiatives 1100 and 1105
I have attempted to summarize here significant similarities and differences between these two related initiatives. Please note that both initiatives propose substantial additional changes not listed in this section many of which will affect YOU. If you are voting on these initiatives, I implore you to read the subsequent posts for more detailed information.
In short, Initiative 1100 privatizes liquor sales, closes state liquor stores, eliminates the current three tier system of producing, distributing, and selling alcohol, and makes substantial additional changes to the state liquor laws (see subsequent posts for details). It also changes taxation.
Initiative 1105, on the other hand, privatizes liquor sales and eliminates state liquor stores but maintains the three tier distribution system. It also makes changes to taxation.
Table #1 compares the two initiatives.
|Initiative 1100||Initiative 1105|
|Privatizes liquor sales and distribution and closes all state liquor stores||Privatizes liquor sales and distribution and closes all state liquor stores|
|Eliminates the current three tier system of producers, distributors, and retailers||Retains the three-tier system. Requires that spirits be sold through a middle person (wine and beer can currently be sold directly in addition to the three tier system).|
|Allows volume discounts on sales of wine, beer, and spirits||Retains laws that prohibit volume discounts for beer and wine. Volume discounts for spirits would be allowed.|
|Makes substantive additional changes to the state liquor laws||Does not make substantive additional changes to the state liquor laws|
|Retains liquor excise tax||Eliminates liquor excise tax|
|Eliminates liquor profits (i.e. markup)||Eliminates liquor profits (i.e. markup). Recommends the legislature create new taxes|
|The Office of Financial Management estimates that Initiative 1100 is revenue negative at the state ($76 to $85 million) and local ($180 to $192 million) level.||The Office of Financial Management estimates that Initiative 1105 is revenue negative at the state ($486 to $520 million) and local ($205 to $210 million) level.|
The next post will give a breakdown of Initiative 1100.