If the state is looking for a place to save money AFTER THE PASSAGE of I-695, how about we privatize the liquor distribution business. Why DO we have state liquor stores? Most states don't. We would have a one-time windfall as we sold out inventory, then continuing savings on personnel expense, leases, etc. The current system makes no sense whatsoever. Is hard liquor more of a problem than wine or beer? I don't think so. Either the state selling booze is necessary, and they ought to be selling all the beer and wine as well (maybe cigarettes,too), or it is not necessary and the whole kit and caboodle could be privatized. Partial privatization just doesn't make sense.

-- Mark Stilson (mark842@hotmail.com), October 25, 1999

Answers

The privatization of the hard liquor sales in this state could certainly be discussed, but it's not going to save the state any money. The liquor stores actually bring in money(imagine the outcry if taxes were going to subsidize the sale of hard liquor!) so privatizing them wouldn't save any money at all.

You also wouldn't see a one-time windfall of money from the sale of inventory. The state had to buy the alcohol in the first place, so it would just be replacing the money it used to buy it. In fact, it would actually cost the state money. Money from hard alcohol sales goes towards funding things like drug enforcement and education, alcholism research, and to the UW and WSU (oh the irony for WSU). And you're right, most states don't have state run liquor stores, but 17 other states do. Not exactly a small minority.

-- Patrick (patrick1142@yahoo.com), October 25, 1999.

"The liquor stores actually bring in money(imagine the outcry if taxes were going to subsidize the sale of hard liquor!) so privatizing them wouldn't save any money at all. " Of course they bring in money! That doesn't mean that privatizing them wouldn't SAVE money. If the same taxes were collected without the personnel and other costs, you could even make MORE money. And you could fund the same things with the revenue as you do now. You are REALLY showing your bias on this one Patrick. What makes liquor distribution special? If you support retail liquor sales by the state, how about a state airline (AeroWSDOT?), how about the state get into the highly lucrative software industry (WashSoft?). How about we get into the pharmaceutical business (ImmuWash?) or sell books (Washazon.com?). I say again, it makes no sense to partially privatize the booze business, either the state or the business community is artificially losing economies of scale. And either we REALLY believe that monopolies are inefficient and cost the consumer (in which case we ought to drop the hard liquor monopoly) or we ought to get the restraint of trade laws off the books. Whether 17 other states chose to be stupid (generally because of historical links to religious based temperance movements) ought not to be a factor in OUR decision making.

-- (mark842@hotmail.com), October 25, 1999.

While your at it how about the ferry system and also what about those Mariners can't we privatize them too?

-- no chance (kingoffools_99@yahoo.com), October 25, 1999.

It has been my experience that when governments engage in what should be commercial activities, they don't do them particularly well. Case in point, from KOMO News: - - - SEATTLE - Two state agencies are investigating possible fraud and illegal timber sales involving the City of Seattle.

KOMO 4 News Investigators learned of the investigations as we uncovered the sale of timber on land owned by Seattle City Light.

We were astonished to find the City of Seattle sold acres of mature forest for a fraction of what the timber is worth.

In the new clearcut that stretches for miles along the Seattle City Light transmission line, the stumps reveal cedar, Douglas fir and hemlock. Back in 1995 City Light decided timber along there had to come out for fear it would blow into the transmission lines. Thats when a group of City Light employees offered the city a deal.

Dave Howell with City Light says, One of the employee groups decided that they would be able to remove the timber and offered a price for the timber and we accepted their offer.

The group paid City Light over $5,000 back in 1995. The next year they paid $1500 for timber.

In 1997 they offered $6,000 and this year another $8,000. All told they paid a little more than $20,000 to log more than 87 acres of timber. City Light never put the timber out for bid.

Tom Hanson, a timber appraiser says, It doesnt appear to me that the seller was well informed.

He looked at photos we got from the state that show the timber before harvest. He knows there was commercial value. KOMO Investigators hired Hanson to evaluate the clearcut.

So how much was the timber worth?

Hanson reviewed these state documents on the four timber harvests. They show more than 1.6 million board feet of timber was sold to various mills.

After logging costs here's the estimated profit : at least $668,000.

A pretty good return on a $20,000 investment.

But City Light says its not concerned with profit. "I'm not concerned with the level of profit. As I said we are not in the timber business. Our concern in with the reliability of the transmission system, says Dave Howell.

So we asked Tom Hanson to evaluate that as well. City Light claims the trees were a danger to the power lines but Hanson could find no evidence that trees were blowing down and he says most of the trees cut this spring were not a danger.

Tom Hanson says, "Because the power lines are up hill and the trees are simply not going to grow tall enough to reach the power lines.

Remarkably, the city even has timber appraisers on staff for the sales in the Cedar River Watershed but they were never contacted.

Now, City Light has cancelled the permit for any more logging on the right of way. There was about a mile of mature forest left there to be harvested. They cancelled the permit after KOMO 4 News Investigators called it to their attention. They say they're investigating further and theyre not alone.

Some of this timber was sold to mills that export logs, violating state law. The State Department of Revenue is investigating that and the state auditor's office has a fraud investigator examining how these workers got these logging permits in the first place.

We'll keep digging and let you know what we find.

PS:

ac, did you get any of the money, or did your coworkers leave you out????

-- Craig Carson (craigcar@crosswinds.net), October 25, 1999.

Heck. Seattle can't even do parking meters right:

URGENT: Lawsuit Filed Over Cheating Parking Meters October 25, 1999 SEATTLE - A class action lawsuit has been filed against the city of Seattle over the issue of parking meters that short-change those who plunk in the coins.

Local attorney Steve Berman, well known for his work against the tobacco companies and AOL, among others, filed the suit after he was contacted by a client who had seen reports on KOMO 4 News. Our investigation revealed that as many as 40 percent of the city's meters short-time drivers -- giving them less time than they bought.

City officials admitted they have known about the problem for at least a year and it has actually gotten worse.

Last year, the Seattle Transportation Department told us about 30 percent of the meters cheated drivers. Now they say it's more like 40 percent. The city has more than 8,700 meters.

Berman's suit is on behalf of anyone who has had a parking ticket in Seattle over the past six years.

The suit seeks unspecified damages. But Berman may seek injunctive relief. If he does and it's granted, the city would have to stop using all of its meters until they're fixed.

In the meantime, KOMO 4 News has learned the State Attorney General's office is checking to see if it can take legal action against the city of Seattle over the cheating meters.

If this were a private business, the A.G.'s office would clearly have jurisdiction. "This is the city of Seattle so we have to approach it a different way," said Regina Cullen of the State Attorney General's Office.

The city will collect more than $13-million in parking fines this year.

-- (craigcar@crosswinds.net), October 25, 1999.

No Mark, the state wouldn't save money. The liquor stores do charge sales tax and whatever other "sin" taxes there are. But of course that money goes to the general fund and other specific accounts. The liquor stores DON'T get any of that tax money. Like any other business, the stores set the price on their products based upon the price they pay, plus a certain amount over that to cover the costs of doing business like rent and payroll. The revenue generated from sales pay for these things, and anything left over, last year about $120 million, is distributed to specific sources. Privatize the liquor stores and the state still receives the same amount of tax revenue as before, but that extra revenue is GONE. Let me repeat. The state does make a nice profit on the liquor stores. Privatize them, and there still will be a profit, but it will be to private businesses.

Now I don't know what bias you are reading into my messages Mark, but all I'm saying is that your theory that spinning off the liquor stores will save the state money IS FALSE. I'm not trying to make a comment on the idea of privatization. That is a subject that has little to do with I-695. But the fact is that the state makes money from operating the liquor stores (NOT factoring in the tax revenue). So the state WOULD NOT save money by privatizing them.

-- Patrick (patrick1142@yahoo.com), October 25, 1999.

Craig, Of course the parking meters cheat everybody. They are made by Park-o-meter which is owned by one of Bill Clintons best buddies.

-- maddjak (maddjak@hotmail.com), October 25, 1999.

So Patrick-

Are you saying that the state ought to get into ANY profitable business, or just liquor?

-- (craigcar@crosswinds.net), October 25, 1999.

To Patrick: Explain how the state would NOT save money by releasing all of its employees, terminating all of its leases, eliminating all of the "retail overhead", selling all of it's owned fixtures and shutting down it's warehouses, while at the same time collecting the same amount in taxes and fees on the products it was once selling?

Secondly, regardless of what 16 or 17 other states do, the government should not be in the business of private enterprise. If the state liquor stores are actually turning a profit (gee, how could they do that when they have an absolute monopoly????) it means they are taking advantage of the citizenry.

The government controlled liquor stores are throw-back to the Prohibition era where attempts were made to legislate morality and control exactly who has access to the products. Face it, if kids want to get their hands on hard alcohol, they will and if drunks want to drink more, they will. No amount of government control is going to change that fact.

I would bet a case of single malt scotch on the fact that tax revenues would actually increase if the liquor stores were to privatize. Like many people, I don't like paying state prices and simply avoid the "hard stuff". If, like so many other states, there were some competition to bring prices back to a reasonable level, I'd be more inclined to buy. For now, I pick up the occasional bottle in the duty free shops or when I travel to other states. Why pay $35 for a good bottle of single malt in WA when I can get the identical product in another state for under $25. Free enterprise is an amazing concept!

-- just a guy (torijosh@yahoo.com), October 25, 1999.

"Craig, Of course the parking meters cheat everybody. They are made by Park-o-meter which is owned by one of Bill Clintons best buddies." Gee, thanks jak. But next time, why dont you spare this forum, and just email craig with these intellectual responses.

I'm sure that you two would have alot to talk about re: "Clinton is a (fill in the blank)"

Here's a good excercise for you jak:

The next time you get the erge to post a "witty Clinton comment" on this forum, think about how much you would rather be eating @ Dick's...

Make the obvious decision

...and then, come back home, email craig with your nuance, or post it in the KVI forum (where people will actually care)

-- behemoth witness (jak8@veggie.wow), October 25, 1999.

Craig: what part of "I'm not trying to make a comment on the idea of privatization" didn't you understand? As someone who doesn't buy much hard alcohol I'm rather indifferent to the idea. However, the issue that Mark brought up was of the state saving money if it privatized the liquor stores. As I have stated several times now, the state wouldn't save money, it would lose money if it privatized them. I'm not saying anything else.

Guy: I can't believe I'm having to explain one of the basic concepts behind running a business, but here goes. When a company sets a price on a product, it factors in the costs of doing business like payroll, rent, and any other espenses, plus tries to add in a little profit. For better or worse this is what the liquor stores are doing. The prices they set cover those costs PLUS provide a little extra revenue OUTSIDE of what they also collect in taxes. Privatize them, and yes, they no longer have to pay those costs, but they also no longer are earning that profit. It's kind of like asking how Microsoft wouldn't save money by just packing up shop. Hey, they spent over $2 billion dollars last quarter that they wouldn't have if they weren't in business. Of course they had $4 billion in revenue at the same time. It's that entire gross vs. net income thing.

And Guy, I'd almost be willing to take that bet of yours. A Glenmorangie Port Wood Scotch aged 12 years is $52.95 at any liquor store and is $53.07 direct from Glenmorangie. A 10 year single malt is $41.95 at a liquor store and $46.55 direct (neither one includes shipping). I don't suppose you have any real evidence that the state is charging more than fair market value for hard liquor?

-- Patrick (patrick1142@yahoo.com), October 25, 1999.

Patrick, my point was that the state should not be in private enterprise, ESPECIALLY IF THEY ARE TURNING A PROFIT!!! I understand all too well about what goes into pricing a product for retail sale. I also understand that the purpose and function of government is to provide for the protection of its citizens, not control the flow and price of legal products by monopolizing an industry within the state boundaries. Let private enterprise and capitalism control the liquor. There will be more businesses from which the state can grab B&O taxes, and more sales tax revenue.

-- just a guy (torijosh@yahoo.com), October 25, 1999.

Of course the state would save a TON of money on privatizing liquor distribution. And anybody who thinks otherwise is certifiable.

Those people who work in the liquor stores are getting paid union wages. And there are usually three or four them in each store. Plus, the state has to rent all of these locations for the stores. And need I go into the bureaucrats overhead that run these stores that could be fired?

So, Patrick, we dump an entire cadre of state employees and a whole class of bureaucrats. Plus, the state won't have to rent the space for the liquor stores any more. This won't cause the state to save money? 'Splain that one to me. Or is your premise based not in fact but in your religious dogma that government can and should do everything?

"(As governor) I will raise taxes only as a last resort." -- Mike Lowry, running for governor, BEFORE proposing the largest tax increase in state history.

-- Joe Hylkema (josephhy@wsu.edu), October 31, 1999.

Joe:

Can you explain how they would save money, since they now make a profit on the sale? If they privatize it, I can see how a private operation could make a greater profit, but how would the state save money by doing that?

-- dbvz (dbvz@wa.freei.net), October 31, 1999.

To Joe Hylkema:

The main problem behind trying to privitize the liquor industry is that other little 'illegal' Washington State Law about providing jobs for the State Workers who might otherwise be laid off because their job no longer exists.

This is NOT a state, it is a kingdom.

-- maddjak (maddjak@hotmail.com), October 31, 1999.

Art.I Sect 1 of our state constutution states that the state was "...established to protect and maintain individual rights." It doesn't say anything about the state selling liquor and running numbers games.

I was recently in Indiana, and my favorite 90 proof sour mash was several dollars less than what I pay in our government liquor monopoly store. Also, regular unleaded gasoline was 106.9 per gallon. Indiana is the 25th highest taxed state. Even though they have both sales and income tax.

-- Art Rathjen (liberty@coastaccess.com), November 01, 1999.

DB:

"At Safeway on Seattle's Capitol Hill, a bottle of Washington Hills Cabernet Sauvignon costs $8.99. At the state liquor store across the street, the same wine sells for $6.59." (Seattle Times, October 31, 1999.)

First off, they can't be making too much on it if they're selling it below market rate.

Secondly, sure, they bring in some modest profits, but those costs are probably offset by the fact that the WSLCB is a "behemoth bureaucracy run by a wheat farmer, a disabled veteran and a gay- rights advocate." (ibid)

Your claim, therefore, that selling booze at below-market rate to fund a mammoth bureaucracy causes the state to make a profit is preposterous, like all of your other claims. Once again, it has no basis in fact - only in your religious dogma.

-- Joe Hylkema (josephhy@wsu.edu), November 02, 1999.