PASCO — Pasco could lose up to almost $1 million annually depending on what voters decide on two liquor privatization initiatives on the November ballot.
City Manager Gary Crutchfield said during a city council meeting this week that initiatives 1100 and 1105 would break the state's monopoly on the sale and distribution of liquor.
But the city could lose $460,000, or all $735,000 of the annual state liquor income it receives, depending on which initiatives pass, he said.
Both initiatives would eliminate the state's liquor profits, which are shared between the state, cities and counties. I-1100 would keep the liquor control tax, while I-1105 would eliminate the tax on April 1, 2012, according to the Association of Washington Cities.
The loss of the liquor revenue would affect the city's general fund on top of revenue decline from the recession, Crutchfield said.
Pasco used about $700,000 of the city's $6 million in reserves to balance its $30 million operating budget for 2010. Sales tax revenue, one of the city's major funding sources, plummeted by 17 percent in 2009.
"We are already in delicate financial shape," Crutchfield said.
Although sales tax has improved, it remains about $500,000 to $600,000 below 2008 levels, Crutchfield said. And it has been a good construction year, with more than 400 building permits for new homes issued so far.
Mayor Pro Tem Rebecca Francik said the initiatives would put $735,000 of what has gone to the city into the coffers of private businesses. And it's private businesses that are asking for the initiatives, she added.
Modernize Washington has raised about $1.8 million to support I-1100, according to the state Public Disclosure Commission. Costco, Walmart and Safeway are the group's largest donors.
Washington Citizens for Liquor Reform has raised about $2.2 million to support I-1105, according to the state Public Disclosure Commission. The group's only donors are liquor distributors Odom Southern Holdings of Bellevue and Young's Market Company of Los Angeles.
And Protect Our Communities has raised about $6 million to oppose both initiatives. The group's main donors are the Beer Institute, the National Beer Wholesalers Association and the Washington Beer & Wine Wholesalers Association.
Mayor Matt Watkins said he is wrestling with the initiatives due to the question of the state's monopoly. However, he feels the public needs to know the ramifications that either initiative could have on local government.
The council will hold a public hearing on the initiatives during its Sept. 27 meeting and could take a formal position after the hearing.
-- Kristi Pihl: 582-1512; firstname.lastname@example.org