liquor.JPG

The group behind Initiative 71, Oregonians for Competition, announced Wednesday that it has withdrawn the ballot measure, instead focusing on defeating initiative petition 28, which would increase corporate tax rates.

(The Oregonian/Brent Wojahn)

Sponsors of a push to privatize liquor sales in Oregon have called off their attempt to get the measure on the November ballot.

The grocer-led group behind Initiative Petition 71, Oregonians for Competition, announced Wednesday that it has withdrawn the proposal. Instead, the group said, it will focus on defeating Initiative Petition 28, a union-backed measure that would increase taxes on corporations.

Grocers had floated a similar effort in 2014 only to pull back amid opposition from beer and wine distributors.

"There was a sense of disappointment to come once again to the brink and have to step back," said Pat McCormick, spokesman for Oregonians for Competition. "But there was a clear consensus that the specter of IP 28 required action."

Initiative Petition 28 would raise an estimated $2.6 billion a year by making companies pay a 2.5 percent gross receipts tax on sales over $25 million. Proponents say the funds would buoy the state's education budget and pay for other needs, while opponents say the tax would discourage businesses from investing in the state.

The tax measure, which has business and labor groups marshaling their resources ahead of a pitched fight this fall, could become one of the most expensive and divisive ballot measures in state history. It's expected to garner the 88,214 signatures needed by July to qualify for the November ballot.

The withdrawal of the privatization measure comes less than a week after the Oregon Liquor Control Commission announced it would allow 14 Portland-area retailers -- including four Walmart stores -- to sell liquor.

While McCormick said the commission's decision shows there's room for liquor sales in grocery stores, he said every Oregonian should have the same access to spirits, not just those in the Portland area.

The coalition, which shares offices with the politically influential Northwest Grocery Association, will see what becomes of the commission's new program, he said, but will continue to consider both legislative and administrative paths for opening up access to liquor.

Though he couldn't provide the number of signatures gathered for the liquor privatization measure, McCormick said the measure was well-received and on track to qualify for the ballot.

The measure would have asked lawmakers to come up with a new liquor tax, a provision designed to help it win support.

In a written statement, opponents of the measure said they were pleased with the sponsors' decision to withdraw it.

Ryan Frank, spokesman for Oregonians Against the Takeover, said keeping the liquor business in the state's hands will protect revenues for government services, protect against price increases, and allow local beer, wine and spirits producers to flourish.

-- Anna Marum

503-294-5911