A previous version of this article used part of a quote from Christie Scott that did not fully explain hers or OLCC’s position. The current version more accurately explains the legislative process should the liquor measure pass.
This November, Oregonians will vote on whether grocers that are licensed to sell beer and wine will also be allowed to sell liquor. Currently, only state-certified stores are allowed to sell liquor. This is the first time that such a measure has actually made it on the ballot, though grocery associations have lobbied for a bill for years.
Pat McCormick, a spokesperson for Oregonians for Competition, the main petitioners for the ballot measure, says that the current state-run monopoly system is bad for the government and for residents.
“It makes little sense for the government to be responsible for enforcement of alcohol laws on one hand and to be promoting the consumption of liquor by selling it on the other,” McCormick said.
If passed, this measure would prevent the state from selling liquor and instead make its largest function liquor law enforcement. This entails everything from drunk driving laws to making sure that stores aren’t selling to minors.
McCormick says that the measure has been received well by Oregonians.
“They like the idea of being able to buy distilled liquor at the same place that they already can buy beer and wine,” he said. “It leads to more convenience for the consumer and less hassle for the government.”
Liquor sales are the third biggest source of money for Oregon, behind revenue from taxes and the state lottery. Losing this revenue source will mean a lot of restructuring of programs that directly benefit from liquor revenue, as well as the potential for a liquor tax in the future.
“It’s inevitable that the legislature will try to change programs and try to share in that revenue source,” said McCormick. “We wanted to make that process more transparent and revenue neutral.”
The Oregon Liquor Control Commission breaks down where each portion of liquor sales currently goes.
Almost half of the costs are absorbed by manufacturers, meaning half of each dollar goes into making the liquor itself. Thirty seven percent represents revenue for the state, county and city. The rest goes into OLCC’s operating costs, bank card transaction costs and commission for the sellers.
Christie Scott of OLLC describes what may happen due to the measure passing.
“This is a challenging decision the legislature will have to make since this measure doesn’t replace the revenue,” Scott said. “It could result in an added spirits (liquor) tax that would replace the current liquor markup. However, if the result is increasing manufacturing costs and higher commission, the result could also be higher prices for consumers, as was the case in Washington.”
Scott says that a tax somewhere else could be used to account for this loss in state revenue. A third option is that services that directly benefit from state-run liquor sales may be reduced.
Liquor retailers will still need to buy and renew licenses issued by the state, a fact that McCormick said will not take away from state revenue. Scott pointed out however that the revenue from licensing does not amount to half of OLCC’s operating costs.
If passed, the measure would take effect in July 2017.