Oregon Public Broadcasting

In Washington state you can't get hard liquor without going to a state-run store.

It's been that way since 1933 when prohibition ended. But this year lawmakers are grappling with a $2.6 billion budget nightmare. And that has state lawmakers wondering whether selling booze is worth the cost.

But as Chantal Anderson reports state liquor regulators are pushing back.

It's a Friday night at this state-run liquor store in Olympia and the place is busy.

Steven Knight is a liquor store clerk from Lacey.

Twenty-two-year-old Zack Nelson searches the shelf for a bottle of Jameson Irish Whiskey. He made a special trip off the freeway to get here.

He'd much prefer it if he could find whiskey at his local grocery store. He likes the idea of privatizing liquor stores.

Zack Nelson: "I think it's actually a great idea. I think it's interesting that wine is able to be sold in a lot of grocery stores. I think a lot of other states have instituted this as kind of a policy. And you know I think it would be a great deal for Washington."

In fact, 32 other states including California have privatized liquor sales. Oregon and Idaho sell liquor like Washington does.

Democratic state Senator Tim Sheldon says Washington's latest budget crisis is forcing lawmakers to think of creative ways to save money.

He points to estimates from the state auditor that it would save $317 million over five years to privatize state-run liquor stores.

Tim Sheldon: "It's an antiquated system; it's about as efficient as the Denver airport was when it was first built. So we can make a lot of improvements if we start talking about it."

Sheldon's been talking about privatizing the liquor biz every year since 1998. And even before that in 1994, Governor Mike Lowry backed a bill for liquor privatization.

Washington has moved in this direction somewhat. It has 154 privately-run liquor stores in rural parts of the state. But as for full privatization Sheldon's bill has never received a hearing until now.

Rick Garza: "Our youth compliance rate in our state liquor stores and contract liquor stores is 94 percent. In the private sector it's 76 to 84 percent so why would we choose to go from a system that works right to a system that provides more youth access to alcohol?"

But State Senator Sheldon is skeptical of the Liquor Control Board's data.

Tim Sheldon: "I think that's an exaggeration of their success. Of course since they're in the business and they tax and they regulate they are going to give you the best story, because it's a monolithic monopoly that wants to always protect itself."

But this will be a tough sell for Sheldon. Five years ago state lawmakers invested $31 million to open new stores and started allowing liquor sales at some stores on Sundays. They also spent another $10 million on a new distribution center.

Last year, liquor stores earned $332 million for the state. That's despite the bad economy. 

If privatized, Sheldon says the state would still get these returns through liquor taxes.

But there's another issue at stake: if Washington made this change some 800 liquor store employees would lose their jobs.

One of them is Steven Knight, a liquor store clerk from Lacey. With two daughters to support, he tells me he doesn't want to lose his livelihood.

Steven Knight: "You know, I wanna keep my job. I don't want it going out to the public. And then how much attention are they gonna pay to the people out in the parking lot, or to the minors that are coming into the store? I think it's all about their bottom line. Here it's about keeping people safe. And that's what I like to do."

Knight thinks he gets better benefits from the state then he would from a private company.

Steven Knight: "Thank you, you have a wonderful day."

Knight's job has support from Governor Chris Gregoire. She has said she's not interested in privatizing liquor stores because it would not produce any direct savings this year -- the estimates are all in the long term.

But advocates of privatizing say they're not giving up. And they believe the issue won't go away anytime soon.