Lawmakers introduced on Wednesday a measure that would gradually lower liquor sales taxes from 20.5 percent to 6.5 percent over eight years.
The measure, which is backed by Republican and Democratic lawmakers, is in response to Washingtonians crossing borders to buy cheaper booze in Idaho and Oregon. Last month Idaho regulators reported that Washingtonians boosted the Gem State’s coffers by $10 million.
“We are chasing our consumers out of our state,” said Republican state Sen. Janea Holmquist Newbry, who is sponsoring the bill along with Democratic Sens. Steve Hobbs and Marko Liias.
Backers say lowering taxes would stop those consumers from leaving Washington to buy booze, and the revenue to the state would eventually be at the same levels before privatization.
Washington voters privatized the state’s monopoly on liquor in 2011 after approving a Costco-backed initiative. Since then, many consumers have found liquor to be too expensive. While prices have decreased over the last 24 months, off the shelf liquor prices in 2013 were still significantly higher than pre-privatization prices. For example, average price per liter of liquor in October of 2011, a month before the ballot vote, was $21.61. Two years later that average price was $24.12 – an 11 percent increase, according to data from the Department of Revenue.
The bill is being introduced with only two weeks left in the legislative session, lowering its chances of being considered in both chambers and convincing lawmakers to reduce the state’s bite of revenue from liquor sales.
Holmquist Newbry said that at least the measure can start a “healthy dialogue” on liquor taxes.
According to fiscal impact estimates prepared by state agencies attached to the bill, cutting taxes for booze would cost the state $20 million in the first two years of implementation and more than $46 million two years later. Local governments would also lose about $20 million, according to those estimates.
David Ozgo, an economist for the Distilled Spirits Council of the United States, said at the press conference that Washington state pulled in about $300 million in revenue off liquor sales prior to privatization. That figure is now about $500 million, he said, despite the state no longer spending as much money operating the liquor system.
Source: The Seattle Pi