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Grocers drop liquor privatization plan to fight corporate tax measure

TRIBUNE FILE PHOTO - An initiative to bring liquor sales to grocery stores has been dropped as the group behind it turns its attention to a corporate tax measure on the November ballot.A grocers coalition says it plans to withdraw an initiative to privatize liquor sales in Oregon so the group can focus resources on defeating a corporate sales tax proposed for the November ballot.

Oregonians for Competition, led by the Northwest Grocery Association and Distilled Spirits Council, suspended Wednesday, April 27, collection of signatures in support of Initiative Petition 71. The measure would end state sale and distribution of distilled spirits and allow grocery stores to sell the products alongside beer and wine.

"We know Oregonians want to buy liquor in grocery stores alongside beer and wine, like consumers in most other states," said coalition spokesman Pat McCormick in an April 27 statement. “Right now, we are shifting our focus to defeating IP 28, the unprecedented $5 billion tax on Oregon sales that would increase costs for working families and consumers.”

Initiative Petition 28 would tax certain corporations 2.5 percent on their annual Oregon sales above $25 million.

The Distilled Spirits Council has yet to decide whether to participate in the campaign against the corporate sales tax measure, said Eric Reller of the Distilled Spirits Council.

McCormick said the grocers coalition would continue to advocate for allowing sale of distilled spirits in grocery stores in the next 12 months.

The grocers coalition is hoping lawmakers will pass legislation in 2016 to privatize the sale of distilled spirits or that there will be more movement incrementally by the Oregon Liquor Control Commission toward allowing sale of distilled spirits in grocery stores.

'Doing our part to defeat it'

Oregonians Against the Takeover, which campaigned against liquor privatization, celebrated the news.

"We are pleased the national grocers have decided to withdraw their unpopular ballot initiative to take over Oregon's thriving liquor marketplace," said Ryan Frank, the group's spokesman. "Keeping liquor local will protect revenues that support critical government services, will ensure consumers are not subjected to unreasonable price increases and will allow Oregon beer, wine and spirits businesses to continue to succeed and grow."

McCormick declined to discuss what kind of of resources the grocers coalition will dedicate to defeating the corporate sales tax measure.

"Suffice it say the members of our coalition are very concerned about the $5 billion tax on sales and its implications for consumers and increasing costs, with no exemptions for food, medicine and other kinds of essentials," McCormick said. "It is certainly is going to have an effect on prices and costs so we want to make sure we are doing our part to make sure it is defeated."

Laura Illig, a chief sponsor of the corporate sales tax initiative, said she doesn't anticipate any major changes in the campaign in the wake of the grocers' decision.

"Our plan is to continue to focus on what we always have focused on, which is is explaining the need for and importance of what IP 28 is going to do and why it is the right way for the state."

Pushing for alternatives

The grocers' decision to end their liquor privatization campaign came after members concluded there was insufficient movement toward a special session on coming up with an alternative to the corporate sales tax, McCormick said.

State Sen. Mark Hass, D-Beaverton, who has been pushing for the governor and lawmakers to negotiate an alternative, lower corporate sales tax bill, has said the ballot measure could result in a bitter fight between unions and businesses with tens of millions of dollars spent on political campaigns.

Hass and some other lawmakers have been trying to get the Legislature to hold a special session before the November election, in order to pass an alternative measure to increase corporate taxes. The moment of truth for that effort will likely come in late May, when lawmakers hold interim committee hearings in Salem. Legislative economists are working on an analysis of the economic impact of Our Oregon’s tax measure, and lawmakers expect the economists to release the findings during the May hearings. Our Oregon, the political action committee that raises money for the union-backed coalition — A Better Oregon — which is campaigning for the tax — also paid consultants to analyze the potential economic impact of the initiative, but so far the group has refused to release those results.

Defend Oregon recently reported its first major contribution in the campaign for the corporate tax measure.

Oregon AFSCME Council 75 gave $100,000 to Defend Oregon on April 19, according to the secretary of state’s campaign finance database.

By Paris Achen
Portland Tribune Capital Bureau Reporter
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