According to a report by released last month by State Auditor Brian Sonntag, the state could increase revenue from liquor sales and distribution by $350 million if it sold the state's single distribution center and auctioned off licenses to private enterprise. In many states, like California and Arizona for example, liquor is sold in grocery stores. In Florida, it's sold in drug stores like Walgreen's and Rite Aid, along with numerous Mom & Pop operations.
Sheldon was particularly critical of the state's distribution system at a recent Port Orchard Chamber of Commerce legislative forum, bluntly asking if Costco or Walmart for example, could operate with the inefficiency of only one distribution warehouse for the entire state. There are 315 state-operated and contracted liquor outlets — at least three times more than Costco and Walmart combined.
The report stated that the $350 million savings wouldn't be realized until the beginning of the 2012 fiscal year — which won't help reduce the current $2.6 billion budget deficit. Gregoire has seized on that as her excuse for continuing to maintain the current inefficient system, which would net state and local governments about $2.36 billion between 2012 and 2016. Approximately 60 percent of liquor revenues go into the state's General Fund, with 19 percent allocated to cities and counties.
Privatizing liquor sales is certainly not the single answer to solving the state's long or short-term budget woes. And yes, there would be hassles transitioning from a state-run monopoly on liquor to a competitive private sector business model. But it's the legislature's refusal to make the systemic changes necessary in good times, that have contributed mightily to the current bad times. Why not let this be a test model for private sector operation of other state-run services?
It's the re-opening of collective bargaining agreements with the state employee unions that I suspect is the true reason for Gregoire's opposition. They own her, and they have the Democratic-controlled legislature quaking in their boots, after making no bones about the fact there will be no campaign dollars for legislators voting against their dictates. And don't forget, the entire legislature is up for re-election this year.