Privatized liquor: 1 year later

Privatized liquor: 1 year later »Play Video
TRI-CITIES, Wash. -- The first of June marks the one year anniversary of Initiative 11-83 and the privatization of liquor in Washington.

While revenues are up statewide, locally, many mom and pop liquor stores are struggling to pay the high taxes the state put on liquor sales.

Mike Shemali and Rajive Malhan saw the potential for big profits when the state got out of the liquor business last June.

"Business has definitely picked up, which is a good, positive sign," Rajive says.

But, they didn't anticipate having to double the price of their liquor because of the state required liquor tax imposed as a result of I-1183.

"Our job title right now is glorified tax collectors. We're not business people right now," he added.

In the year since the initiative passed, the number of places you can buy alcohol jumped from 330 to more than 1,400. But, it hasn't been as profitable as Mike Rajive expected. They say the required fees leave a lot of small liquor stores earning just cents on the dollar.

"The business itself wouldn't have been bad if the taxes were reasonable," Rajive says.

The higher taxes translated into thousands of alcohol drinkers crossing state lines to get their hands on spirits.

"I just think all the taxes are, make it cheaper to go to Oregon," says Sally Barnes. She's not happy with the price of alcohol.

Mike and Rajive are anxious for January to roll around when the 17 percent retail tax on liquor is supposed to disappear.

"If that tax goes away, we'll be back in business. The bleeding will stop," Rajive says.

Until then, local liquor store owners will have to ride out the fees and smaller profits.

Since the imitative passed, liquor sales are up statewide since this time last year and drunk driving fatalities have seen a decrease.