Another Shot at Pennsylvania Liquor Privatization
Ah, Pennsylvania: home sweet home. The state known for its soft pretzels, Hershey’s chocolate and Sylvester Stallone statues. Unfortunately, it has also become known for its archaic alcohol regulations. However, with a new governor who supports privatization and a state senator who is hell-bent on dragging the Key Stone State out of the 20th century, kicking and screaming if necessary, all of that could quickly change.
Last week, Republican State Senator Mike Turzai unveiled legislation that would privatize the ownership and management of the state’s liquor stores. Pennsylvania is one of only two states in the union where government controls the wholesale and retail operations of alcohol.
The proposal would privatize wholesale operations and sell off all of the state-owned and -operated liquor stores. It would also eliminate the 18 percent Johnstown Flood tax, the ridiculously outdated mandate I wrote about earlier. It would also end the state’s 30 percent mark-up on products and institute a per-gallon excise tax between $8.25 and $12 a gallon, depending on product type. That’s quite a bit lower than the current $55 per-gallon tax the state currently draws from liquor.
And while those who would be directly affected by the change are crying about jobs and revenue losses, proponents of privatization insist that the sale will have a greater net benefit than any revenue loss and that residents are fed up with the state’s Liquor Control Board.
The sale of the state stores would net a one-time windfall profit for Pennsylvania, as would the auctioning off of 1,250 retail licenses — to be conducted by an independent party. Currently there are only 620 state stores where Pennsylvanians can purchase liquor. Union members oppose the proposal, claiming that it will result in a loss of jobs. Of course, Turzai’s plan gives those employees first dibs on other government jobs or they can use their experience to get a job at one of the new liquor outlets. Additionally, proponents of the bill argue that the increase in availability and variety of alcohol, and competitive pricing, will increase in-state purchases of liquor rather than residents driving to Delaware or New Jersey. Yet, even if there ultimately is a decrease in revenue to the state, lawmakers and residents — me included — are ready to take the risk to bring Pennsylvania into the 21st century. As Ron Bartizek of the Wilkes-Barre Times Leader wrote: “It’s time to let the free market in on this lucrative trade. I’d rather deal with my choice of 1,250 entrepreneurs than with one government monopoly.”