Dear Senator:
On behalf of more than 17,000 members of National Taxpayers Union in Pennsylvania, I write in support of true privatization of liquor, wine, and beer sales in your state. Unfortunately, details of a troubling compromise bill have emerged that would open the door to a massive increase in the number of state-run liquor stores and, consequently, the number of government employees staffing these stores—all of which would come at the expense of taxpayers. Though the proposal recommends a few positive steps toward privatization, it would maintain far too much of the status quo, including the current monopoly of liquor sales by the Pennsylvania Liquor Control Board (PLCB). The plan would also likely lead to higher taxes and overall costs to taxpayers because it would expand the state store infrastructure alongside permissible (but restricted) development of a private infrastructure. Further, the scheme would continue to vest great authority in the PLCB—an entity that has recently engaged in corrupt practices.
Pennsylvanians could be well-served from changes in the proposal that would allow grocery stores to sell beer and wine, as well as shipments of wine to private residences. But that convenience would come at a high cost to taxpayers over time. Early reports indicate that the compromise bill would require new state-run stores to open within or near grocery stores that sell beer or wine. A state-run store costs, on average, roughly $500,000 to operate each year—a fiscal burden that would increasingly be shouldered by taxpayers as these stores lose sales to private competitors. The proposal places no limit on the number of new stores that would be constructed. Rather it requires that they would be built “whenever possible.” Additionally, all state-run stores would be permitted to open on Sunday for 12 hours of business (currently, only 25 percent of state stores are open on Sundays, from noon to 5PM). These changes could lead to the hiring of scores of new government employees at the same time that competition with private businesses ought to reduce the need for more state stores and more government employees. In short, the use of Pennsylvanians’ tax dollars to pay for the state-run store system (which already costs taxpayers approximately $400 million annually) would skyrocket.
Another issue with the proposed changes would be the expansion of the PLCB. Just days ago, a state Ethics Commission investigation found that three former senior PLCB officials were guilty of corruption, such as accepting gifts from vendors and awarding government contracts to friends and family. While these former officials are required to repay the state for damages, the penalties represent little more than a slap on the wrist. Current PLCB officials understand that this type of corruption may continue with little consequence. Our members in Pennsylvania would benefit greatly from a privatized system that severely shrinks or eliminates the PLCB, rather than the proposed “reforms” that would expand its role.
Pennsylvanians deserve to be able to conveniently purchase a wide variety of beer, wine, or spirits at an affordable price, but the compromise package would primarily serve to increase state spending while failing to address most of the system’s of the current problems. Lawmakers would be wise to abandon this proposal and instead pursue true privatization, which would benefit both the economy and taxpayers.
Sincerely,
Lee SchalkState Government Affairs Manager