- Taxes are Complicated, “Free” is Not - August 19, 2011
- Pennsylvania Works Toward Privatizing Liquor Sales - July 21, 2011
- Wireless Tax Fairness Act is a Step in the Right Direction - July 19, 2011
Pennsylvania House Majority Leader Mike Turzai is leading the charge to privatize the state’s liquor sales. Pennsylvania can count only Utah in its company in terms of states that retain total control over both wholesale and retail liquor sales within their borders.
In Pennsylvania, this monopoly is the legacy of Gov. Gifford Pinchot, whose goal in the post-prohibition world of 1933 was to make sales of alcohol “as inconvenient and expensive as possible.” This dated goal is laughably at odds with all current and advisable economic policy- especially during a recession.
House Bill 11, would do away with the current state-run system in favor of 1,250 independent stores, which are twice as many as exist presently. Licenses would be sold to on an open market by an independent third party. Recent polls conducted by Quinnipiac University show that over two-thirds of Pennsylvanians want to see this plan come to fruition. Besides unreasonably high prices and poor customer service, state residents are very limited in their selection under the prevailing program.
This has been especially troublesome in circles of wine enthusiasts, and undermines the admirable goal of promoting a cultural respect and appreciation for alcohol that can help prevent its abuse. Rep. Turzai points out the conflict of interest that exists within the Pennsylvania Liquor Control Board (PLCB), w ose primary purpose is to promote and regulate alcohol consumption. Under Turzai’s reformed system, the PLCB would be responsible only for regulation and other safety and health-minded operations. Enforcement at state-run stores is minimal today, and there are few measures in place to protect teens or others who might abuse the substance.
The proposed legislation would strengthen law enforcement’s hand in alcohol sales, and prioritize alcohol safety and awareness efforts. Additionally, there would be harsh penalties for any private retailers not in compliance with these regulations.
Opponents to these reforms point to lost revenue and lost jobs for those employed in state liquor sales as a reason to oppose government getting out of the liquor store business.
In terms of revenue, it’s true that the Liquor Control Board handed over nearly $500 million to the Pennsylvania treasury this fiscal year. However, the new system would involve restructuring taxes, in part by implementing a fairer gallonage tax, in a way that would help bridge this gap. More importantly, the business and growth that would be generated by having twice as many stores operating in the state at more competitive prices and standards should ensure that the state-run program is never missed.
Certainly, with a system that is, by design, as expensive and cumbersome as possible, there is nowhere to go but up. Enacting Turzai’s proposal could prove to be a much-welcome change for Pennsylvania’s taxpayers in this climate of struggling economies.