Confidential memo outlines details of state proposal to lease liquor distribution

Washington House Democrats are considering a plan to lease the state's liquor distribution system for $300 million cash up front. But it wouldn't come cheap.

Initially, the deal could cost the state 80 percent of what it currently collects from the wholesale distribution of booze. That's according to a memo marked "highly confidential." It comes from a newly formed company called Washington Beverage and outlines a proposal to take over from the state the distribution of hard liquor throughout Washington.

The windfall the state would get right away could save programs like Basic Health and Disability Lifeline. In turn Washington Beverage – or whatever company won the lease - would retain the bulk of the annual revenues from wholesale distribution.

Governor Chris Gregoire is not convinced this is a good deal for taxpayers.

"I understand its purpose. Its purpose is to be a bridge for the Basic Health Plan and Disability Lifeline. I don't know that it will work," says Gregoire.

But the confidential memo from Washington Beverage outlines three potential benefits:

• the state would share in the profits
• the newly formed company would pay taxes
• over time overall state liquor revenues would go up significantly