Privatizing liquor sales — ‘hangover’ on the horizon?

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“Private sector retailers, on average, are not likely to provide comparable salary and benefits to those that the PLCB employees receive,” stated that “Liquor Privatization Analysis.”

The issue of liquor privatization ignites supporters and opponents.

The Pa. Manufacturers Associations favors privatization while Mothers Against Drunk Driving opposes it. The Commonwealth Foundation supports privatization citing such PLCB ‘boondoggles’ as creating its own private label wine using wines bottled in California not Pennsylvania. The head of Pa.’s Fraternal Order of Police opposes privatization, telling state legislators in testimony that privatization will spawned higher crime rates and drain police resources, a contention disputed by the head of the Pa. State Police.
PLCB revenue to state coffers, averaging hundreds of millions annually, funds the Pa. State Police $20-million yearly cost for enforcement of the state’s liquor laws that include monitoring compliance in 20,000 establishments currently with liquor licenses like bars and restaurants. Under privatization state government would have to find enforcement revenue elsewhere, like from privatization licensing and renewal fees.

Privatization supporters said costs for alcoholic beverages will decrease, selections will increase and the Pa. residents going to out-of-state to buy will lessen. Yet, such claims are disputed. When the state of Washington privatized a few years ago prices increased 10-20 percent and selection decreased in many stores. While Pa. residents crossing-borders to purchase liquor may decrease in NJ or Ohio, Delaware still has an advantage with no state sales tax.

Bilal Qayyum, president of the anti-violence Father’s Day Rally Committee, said his key concern with privatization is controlling the volume of liquor in communities already reeling with problems of joblessness and poverty.

“The current system is not perfect but now there is more control over sales. We remember what happened with those Stop-&-Go’s selling beer to teens,” Qayyum said. “Look at casinos. Those businesses were supposed to be windfalls to cities and that hasn’t happened.”
Qayyum, a former economic development official for Philadelphia city government, raised a little discussed issue: economic/ownership opportunities for minorities under privatization.

“If privatization goes through, what are the opportunities for minorities?” Qayyum said. “Are we going to be locked out of this also?”

While powerful entities and prominent individuals wrangled over privatization, the general public places that issue in low priority status according to a recent poll by the respected Franklin & Marshall College Poll.

The poll, released May 8, found Pennsylvania residents placed privatizing liquor next to the bottom of 11 priorities, far behind improving the state’s economy, creating new jobs and improving public schools. Further, that poll found public support for privatization slipping since the beginning of 2013.

Gov. Corbett announced that he wants to direct revenue from the sale of wholesale and retail liquor operations to increased funding for public schools statewide. But major cuts to K-12 education made by Corbett during the past two years has placed many public school systems in a financial tailspin, like in Philadelphia which will close 23 schools and perhaps enact deep cuts in educational services to reduce a massive budget deficit.

State Senator Vincent Hughes, Democratic Chair of the Senate’s Appropriations Committee, supports increased government funding of public education but notes the Corbett’s liquor privatization funding is a one-time deal not sustained, states Hughes’ spokesman Ben Waxman.

“With privatization the state loses control of ensuring full collection of all sales and other taxes involving liquor store sales. This is not a problem with state stores,” Waxman said.
“I have not seen a credible study stating that privatization will lead to higher revenue and taxes for the state.”

Reprinted from the Philadelphia Tribune

Vincent Hughes Shalimar Blakely Tom Corbett Bilal Qayyum

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