Why funding for the enforcement of regulations is essential

Former Michigan Liquor Control Commissioner and former Michigan House of Representatives Floor Leader Pat Gagliardi has authored a new report, “The Need for State Alcohol Regulatory Funding: Fighting Deregulation by Defunding,” made possible by a grant from the Center for Alcohol Policy. “The fervor to cut budgets and anti-regulatory sentiment can lead to ill-considered changes in alcohol policy,” the report notes.  “There is a real danger that state alcohol control will be reduced to the point of ineffectiveness by overburdening the regulatory system that, to date, has been successful and has enjoyed overwhelming public support."

The report notes that the number of Washington State Liquor Control Board agents dropped from 86 in 2003 to 55 in 2012.  The Washington State budget allocation for alcohol control decreased from $15.5million in 2007 to $10.9million in 2011.  It goes on to discuss the changes in our state's alcohol control system, including a quote from former WASAVP president Jim Cooper.

"With the passage of Initiative 1183, the Washington State Liquor Control Board (WSLCB) will cease state liquor store and liquor distribution operations . . . The initiative permits retailers to act as their own distributors for wine and spirits and circumvents the three-tier system that has long grown the industry.  In opposing the initiative, Jim Cooper, president of the Washington Association for Substance Abuse and Violence Prevention argued:

'If we're going to destroy our current system, we need to understand what will replace it.  I-1183 raises more questions than answers.  What we do know is this: at least 1,400 stores will be allowed to sell liquor under I-1183, without a penny for more liquor compliance officers.  The Centers for Disease Control and Prevention recently recommended against liquor privatization because it caused a sharp increase in alcohol consumption and problem drinking.  Our state stores have one of the best enforcement rates in the country when it comes to checking identification.  According to the Liquor Control Board compliance checks, grocery stores sell to minors who try to buy alcohol one time out of four attempts.  Studies show teens don't drink for the taste, they drink for the buzz.  And if they can get their hands on the hard stuff, they will."

The report goes on to say:

"The alcohol industry is motivated primarily by profit and cannot be left to self-regulate in this field.  The problems with alcohol can only be addressed by restricting the availability, accessibility, and marketing of alcohol through enforcement of regulations that apply to all."

"The need for adequate funding is essential for the regulation of alcohol to work.  A fully funded system will strengthen the regulatory framework that supports alcohol policy compliance and enforcement."

"Adequate funding is also essential to avoid other consequences of deregulation that are often overlooked, including money laundering, smuggling, Internet sales to minors, blind pigs (establishments selling alcohol illegally), gang activity, and underground economies, especially in urban areas with private clubs that go unchecked."  

Need for prevention increases with easing of alcohol-related regulations

The cumulative effects of recent legislation regarding alcohol promotion and advertising (see list below), coupled with the pre-existing pervasiveness of such marketing, must be considered from a youngster’s perspective. Many of these enactments permit a casual approach to alcohol use (just before driving a car and running errands, e.g.), others contribute to the overall normalization of alcohol use, and some allow promotions that will have an intended or unintended impact on youth.

Past and presumably future legislative trends in this regard are clear. WASAVP asks that the legislature help balance this situation by replacing some of the cuts to community and school based prevention services that have been simultaneously imposed over this same time period, due to revenue shortfalls.  Enactment of HB 2014 is one way to begin achieving this balance.

2011

SHB 1172, Creates a pilot project for beer and wine tasting at farmers markets.

SSB 5788,
• Allows spirits, beer, and wine restaurants and hotels to sell beer in a sanitary container brought to the premises by the purchaser or furnished by the restaurant/hotel and filled at the tap at the time of sale (e.g., growlers).

• Allows special occasion licensees to pay for beer and wine immediately following the end of an event and allows wineries and breweries to pay reasonable special occasion table fees.

• Allows branded promotional items to include the logo of a professional sports team.

• Removes the 40 per year limit on nonclub, member-sponsored events by private club licensees.

SHB 1202, Creates a pilot project for spirits sampling in state and contract liquor stores.

SSB 5156, Creates a liquor license allowing VIP airport lounge operators to serve spirits, beer, and wine for on premises consumption.

HB 1244, Allows a spirits, beer, and wine restaurant to sell beer in a sanitary container brought to the premises by the purchaser or furnished by the restaurant and filled at the tap by the restaurant at the time of sale (e.g., growlers).

2009-2010

SSB 6329, A grocery store licensed to sell beer and/or wine may obtain an endorsement to offer beer and wine tasting.

ESHB 5110, Wedding boutiques and art galleries may offer one glass of wine or beer without charge to customers at least 21 years of age for on-premise consumption

EHB 2040,
• Permits financial interests between liquor manufacturers, distributors, and retailers under certain conditions.

• Allows liquor manufacturers and distributors to provide branded promotional items to retailers.

• Eliminates the mandatory 10 percent minimum mark-up for beer and wine manufacturers to charge distributors and for distributors to charge retailers.

SHB 1415, Allows the Legislative Gift Center to sell wine produced in Washington to persons 21 years of age or older for off-premises consumption.

2007-2008

SHB 1047, Allows grocery stores licensed by the Liquor Control Board that have a snack bar license to sell confections with up to 10 percent alcohol to persons 21 or older.

SSB 5721, Allows a liquor manufacturer, importer, or distributor to enter into an arrangement with a sports/entertainment facility licensee or an affiliated business for brand advertising at the licensed facility or promoting events held at the facility.