Closing time for OLCC?

Byline: The Register-Guard

The Oregon Legislature created the Oregon Liquor Control Commission in 1933 at the end of Prohibition for two specific - and often competing - reasons: to produce revenue, while also controlling the sale of hard liquor and combating alcohol abuse. Over those 70 years, legislators and others have attempted, unsuccessfully, to end the state's hard liquor monopoly. Another run is being made in that direction in the current Legislature. It should meet the fate of its predecessors and be quietly laid to rest.

The basic arguments for doing away with the OLCC and privatizing liquor sales center on two points: 1) Consumers are smart enough to control their own liquor consumption and don't need the state to do it for them. 2) Liquor retailers chafe under state mandates governing the hours their stores can remain open, what products they can sell and the rate of return the state guarantees them.

The OLCC's defenders contend that if the OLCC vanished and liquor sales were privatized, Oregon would have more problem drinkers, it would be easier for minors to obtain liquor and the state would probably lose revenue.

A little history might be useful. By 1934, one year after the OLCC's creation, there were 22 state-owned liquor stores and 117 contract stores (those in which private agents contract with the state to sell booze under state rules). In 1952 - 19 years after the creation of the OLCC - Oregon's voters approved an initiative authorizing the sale of liquor by the drink. Seventeen years later, in 1969, state-owned stores began the process of converting to privately owned stores operating under state liquor sale mandates. This conversion was completed in 1983. Six new liquor stores opened in 2000, the first increase in 15 years. And in 2002, liquor stores were authorized to remain open on Sundays and holidays. Some, but by no means all, liquor stores have taken advantage of that freedom.

Now for some numbers: In the 2001-02 fiscal year, sales in the state's 239 liquor stores totaled $254 million, with another $16 million coming from licenses, fines and other sources of income. Of that $270 million total, $128 million went to cover wholesale liquor costs, $104 million was deposited in state coffers to help fund state, county and city programs, $22 million went to compensate liquor store agents and $17 million was used to cover OLCC operations - including its central warehouse expenses and liquor law enforcement.

The OLCC's critics contend that the state could raise just as much revenue by privatizing the liquor operations and taxing booze sales. Opponents doubt that, citing the risk that store owners would gravitate toward cheaper brands to maximize their profits. OLCC-generated revenue is put to good use, and there's no overriding reason to jeopardize that flow of funds.

As for temperance, the current system may annoy some people who wish they could buy liquor at odd hours or at the corner market. It also frustrates those who believe private enterprise can outperform government-run programs in all respects. But Oregon's system works. The 11 a.m. to 7 p.m. hours of operation all but eliminate the liquor-store robberies that are a staple of police reports in other states. Liquor is available in Oregon to those who want it. The main effect of a privatized system would be to make hard alcohol more easily available and loosely controlled, with resulting increases in the sale of alcohol to minors and other social problems.

The efficiency of the current system has been proven over the years. Why dump it? If a few adjustments are needed - such as increasing liquor agents' compensation rates from the current 8.54 percent of sales to 9 percent, or even 9.5 percent - the Legislature should make them. But overall, the OLCC doesn't present problems that would be solved by making hard liquor more readily available.