The Idaho State Liquor Division has seen a steady rise in profits during the past few years, and director Dyke Nally said lawmakers should not consider privatizing liquor sales. “Why would the state give up $45 million?” Nally asked the Joint Finance-Appropriations Committee Thursday. Liquor sales brought in that amount to cities, counties, and the state general fund in the last fiscal year. “The only way I could support [privatization] as a taxpayer and a citizen would be if I got the contract.”
Rep. Darrell Bolz, R-Caldwell, asked Nally about privatizing liquor sales because Washington state is considering a similar measure. Virginia is also looking at a potential one-time windfall of $500 million from privatizing stores, according to the Wall Street Journal. Idaho’s liquor division has $15 million in annual operating costs. Nally said a down economy usually spurs this idea. “During these tough times, privatization is being talked about more and more and more,” he said. Nally said most other control states, which have state agencies in charge of the distribution of alcohol, usually decide not to privatize. Nally said it’s also about more than economics. “Our mission is to promote temperance first and foremost, and second is to promote profit.”
The 57 percent increase in Idaho liquor sales comes from two factors, according to Nally: an increasing population and a shift to higher-end, costlier spirits. He said he’s seen some customers go back to cheaper brands in the worsening economy, and said the state is trying to profit on that trend. The liquor division raised its prices 15 to 20 cents on bottom shelf alcohol, which could bring in up to $268,000 in the current budget. “We saw that our prices (for these brands) were lower than surrounding states,” Nally said.
[...] ID: State liquor director opposes privatizing stores [...]
I am continually amazed at why control states wish to keep their reign over liquor. Some kind of puritan residue of a long lost prohibition era I guess. Coming from a state, Arizona, a licensing state or some might call it a privatization state and comparing to Idaho might be appropriate.
First, Nally comments about a $15 million agency budget. Arizona’s licensing budget is under $3 million.
Second, Nally asks about giving up $45 million to the state. Arizona generates approximately $65 million to the state general fund annually in alcohol taxes; all while regulating the industry at a cost of 5 times less than Idaho. (Current alcohol taxes of $3 per gallon on spirits, 84 cents a gallon on wine and 16 cents a gallon on beer)
I understand that the 21st amendment gives states the right to regulate alcohol. What I don’t understand is the thinking at control states whereby there must be some devilish thought that alcohol is evil and cannot be adequately “controlled” in a privatization manner. It is that very thought, I believe, that hampers a true and open conversation regarding alcohol in America.
Yes, it’s true that alcohol can have detrimental effects when self-restraint has gone into hibernation. But the number of times that occurs compared to the number of times the lawful imbibing occurs is so remote as to hardly register.
Nally says, “Our mission is to promote temperance…”, temperance is vitally important but is something that should be taught as a matter of personal responsibility and each individual must be held responsible for their own actions. The state should not have that burden. It would be the states responsibility to REGULATE only, not to PROMOTE temperance. If some licensee were to be irresponsible in the selling of alcohol then the state would revoke their license etc; that is to say regulate the industry only. That’s what the state’s should be doing not moralizing to the public about temperance or limiting the public about what alcohol they can buy.
That being said, I do want to comment on the Marin Institute. I think they do a fine job for a much needed purpose. I may not always agree with some of things they do, but that is hardly worth mentioning. Fine organization. And thanks for their efforts and mission.
Myron,
I won’t argue which model or goal is better, but it’s important to keep population in mind. Trusting your numbers, it looks like Arizona’s liquor sales bring in about $68 million ($65 million in profit, $3 million in operating expenses), while Idaho brings in about $60 million ($45 million in profit, $15 million in operating expenses.) Given that Arizona is about four times the size of Idaho, it looks like Idaho is generating more profits through being a control state. Of course, those profits can also be called liquor taxes.