Measure would harm small business and taxpayers

The Seattle Times’ weekend editorial endorsing I-1100, the liquor privatization initiative backed by Costco, contained a major factual error [“Reset 2010: Statewide initiatives tackle taxes, taxes and drink,” Opinion, June 18]. I-1100 will not, as The Times claims, “replace all the revenue” from liquor sales, which currently contribute $330 million annually to fund vital services like health care, law enforcement and community programs.

In fact, just the opposite is true. Read the fine print — I-1100 wipes out more than $230 million per year of the state’s revenues from liquor sales, replacing it only with a flat $1,000 licensing fee per outlet that will raise almost nothing. The truth is, this initiative is deliberately designed to transfer hundreds of millions of dollars per year that pay for needed services for taxpayers and transfers those funds to the pockets of Costco, Walmart and the big grocery chains.

The initiative is also written in a way that will put smaller retailers, independent grocers and mom-and-pop small businesses at a huge competitive disadvantage to the big corporate chains. Do we really want to replace the current system with a Walmart monopoly that will harm small businesses and cost taxpayers hundreds of millions in funding for schools and other services?

Buyer beware. The Seattle Times needs to take a second look at this misguided initiative, rather than accepting the false claims of its proponents at face value.

— Jim Cooper, vice president of communications at Washington Association for Substance Abuse and Violence Prevention, Spokane Valley

Tooth Fairy economics at its worst

I believe you and your readers have been terribly misled into the belief that Initiative 1100, if enacted into law, “replaces all the revenue the liquor monopoly earns for the state and will lower prices besides” [“Reset 2010: Statewide initiatives tackle taxes, taxes and drink”, Opinion, June 18]. While it is true that Initiative 1100 would lower prices, it would do so at a horrendous loss in revenue. The state’s total liquor business will be around 4 million cases in 2010.

On an average case priced at $19 a bottle and an average liquor tax of $54.22 per case, Initiative 1100 would return just slightly more than $216 million in annual liquor tax revenue. That figure falls over $100 million short of the $321 million the liquor monopoly returned to the state, cities and counties in 2008 after expenses. Even an additional $20 million in B&O and retail sales taxes does not close that gap.

Initiative 1100 is Tooth Fairy Economics at its worst. There has to be a better way to privatize our liquor business.

— Bob Stevens, Seattle