Privatizing the OLCC is just plain ‘non-cents’

Oregon has a state budget deficit of $ 2.5 billion. Other than the Oregon Lottery, there is one agency that actually makes significant money for the state – it turns a “profit,” for lack of a better term.

So, why are some people so anxious to get rid of the Oregon Liquor Control Commission?

As Oregon lawmakers struggle to balance the state budget, there is again talk of privatizing the OLCC. Why? As state legislators are looking under every rock for every cent they can find, why would anyone want to eliminate this cash cow? It simply doesn’t make sense – or “cents.” And it also won’t save the state any money. Consider:

OLCC “profits” are spread statewide. It costs $16.8 million a year to operate the OLCC – that is over 200 family-wage jobs that would be eliminated. But when you add liquor sales, license fees, and beer and wine taxes, then subtract inventory purchase and commissions paid to liquor agents, there is still a healthy $104.2 million profit.

OLCC excess revenues are distributed as follows: state general fund, $54.8 million; city revenue sharing account, $13.7 million; cities, $19.5 million; counties, $9.7 million; mental health, alcoholism and drug services account, $6.2 million; Oregon Wine Advisory Board, $200,000.

Shutting down the OLCC does not save all of its costs. Indeed, if you privatize the OLCC, the state is still left with virtually 75 percent of its operating budget. How? Because the business of buying and distributing liquor is only a small portion of the OLCC’s mission. The agency has other functions, which would need to be picked up by other state agencies. These include liquor establishment licensing; alcohol education programs; alcohol service permits; liquor law enforcement, including specific programs aimed at ID verification; “minor decoys”; and underage drinking collection of beer and wine taxes. These functions would have to be divvied up between the state police, the Department of Revenue, the Department of Education and others. All of these agencies are already stretched thin and facing budget cuts of their own; they do not have the capacity to absorb duties currently performed by the OLCC.

Who gains from privatization? Think about this: The current OLCC-licensed liquor agents are Oregon business people and Oregon taxpayers. Eliminate the OLCC and where will all that extra money go? Here’s a clue: Fred Meyer, Safeway, Albertson’s, Costco – none of these companies are based in Oregon. Incidentally, while some recent reports have said current OLCC agents were “split” on the privatization issue, our own survey shows over 90 percent of those agents statewide are against privatization.

Privatization proponents also argue that booze would be more readily available without the current OLCC-licensed outlets. This is good? Somebody go ask MADD members what they think about making hard liquor more available around the clock. Responsible drinkers don’t have to buy vodka at a 24-hour convenience store at 3:30 a.m. – problem drinkers do!

Here’s a final mental image. Tool down I-5 and look to the west as you pass through Redding, Calif. You’ll see a huge building with a bright neon sign that says “Liquor Barn.” Is this a sign we need dotting our own landscape? Barns in Oregon typically house farm animals. Let’s keep it that way.

Mary Botkin is the senior political coordinator for the Oregon chapter of the American Federation of State, County and Municipal Employees. AFSCME Local 2505 represents most OLCC employees.