Corbett failing on liquor store privatization
Gov. Tom Corbett said during his budget address earlier in the month that he wanted this year to be the “last call” on state-owned liquor stores. But to date, the legislature is unwilling to act, mainly because of poor strategy on the governor’s part.
Corbett’s plan estimated the state would have gained around $600 million to $1 billion from privatization. He said the state also loses around $80 million a year because Pennsylvanians buy from nearby states like New Jersey, Delaware and Maryland.
Overall, in the 2011-12 fiscal year, the state-owned stores brought in a profit of $80 million. In total, the taxes and profits combined accounted for around $500 million for the state, about the same as the previous year. So, as you can see, the state-owned stores are not in the red like so many other government-run enterprises — for example, the U.S. Post Office.
There are 600 stores run by the state and an online website which monopolize liquor sales and they employee more than 3,000 state workers, mostly sales clerks. In late January, the Pennsylvania Liquor Control Board opened one of its newest stores in Philadelphia, a 6,000 square foot store on Bakers Centre 3413 Fox St., which replaced one previously located at 3414 Ridge Ave.
Pennsylvania is only 1 of 17 states that still controls some portion of liquor sales. It’s an antiquated idea that other states appear to be moving away from. So why isn’t Pennsylvania? It’s mainly because of a lack of leadership and poor strategy on part of the governor and because of a Democrat party that is stonewalling Corbett due to an upcoming election year.
A similar proposal for liquor store privatizations failed last year. If this had been a Democrat governor’s proposal, a deal would have already been made by the legislature. If it fails again, this would be the second main privatization push of his to be set aside by the legislature, after his plan to privatize the state lottery failed recently.
Corbett’s idea to privatize liquor stores is not a bad one. Pennsylvanians would most likely see a decrease in liquor prices and have easier access to stores in general. Nobody likes driving across town to buy a bottle of liquor that should be on the nearest street corner — like every other product we buy. And if we cross the state border to buy liquor, we can be fined. The law treats us like criminals and not like customers.
Most importantly, it would leave the government with more tax revenue and more time to focus on important issues. The state should prioritize to do less so that it can be efficient with important issues.
Corbett should have made an offer that sounded like this: People who buy state-owned liquor stores would have to agree to keep state employees on the payroll. This would have gone over better with Democrats and United Food and Commercial Workers unions who have been opposed to the idea mainly for this reason. Instead, he made a fiscal argument, that although is perfectly reasonable, did not address Democrats’ concerns.
Pennsylvanians largely approve of privatization, which they don’t see as a dirty word but just plain old business as usual. If the legislature can’t agree on privatization, at the very least they should get rid of the fine for bringing liquor across the state border.
Matthew M. Turner is a columnist for Metro Philadelphia. His opinions are his own. You can reach him at email@example.com.
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