The governor has made no secret of his objective to privatize more and more of the commonwealth’s public assets. Even efficiently operated assets that are thriving revenue generators aren’t safe from his ill-advised proposals, most recently to privatize liquor sales.
On many occasions, the governor has claimed to be a champion of Pennsylvania’s small, family-owned businesses, but the plan he and his privatization allies have promoted to overhaul the current system threatens those very businesses.
Many of the state’s beer distributors have criticized Gov. Tom Corbett’s plan because they would be put at a competitive disadvantage against big box retailers like Wal-Mart. Under the Corbett plan, a license to expand into wine and spirit sales would cost beer distributors $150,000, while giant retail competitors with enormous profit margins would only pay $25,000 to $35,000 — small change for Wal-Mart or Target.
Further allocating funds from liquor license sales for education may seem generous and even politically savvy, but Pennsylvanians recognize that $1 billion over four years fails to offset the two consecutive billion-dollar cuts to education in Corbett’s budgets. Remember, the governor was critical of what he labeled as a “one-time earmark” of federal stimulus funds for education, but his proposal is exactly that: a one-time injection of cash. Tying the proliferation of alcohol sales to short-term education funding is not only poor fiscal planning, but also irresponsible and dangerous.
There are other problems with the governor’s plan. Currently, every resident has reasonable access to a wine and spirits store; there is at least one in every county. Experience in other states has shown that private operators locate where the market is, which means the liquor selection in rural areas will decline, as was the case in West Virginia when it privatized. This has sparked opposition from rural lawmakers, including the Republican president pro tempore of the Pennsylvania Senate.
The commonwealth also would lose its bulk purchasing power, which is used to leverage lower wholesale prices; this will drive consumer prices up. Evidence from other states also points to skyrocketing costs to combat social ills associated with increased alcohol consumption, like law-enforcement costs related to violence, burglary, vandalism, drunk driving, teen pregnancy and addiction.
I believe improving the customer experience should be the objective — and there is an easier way of meeting that objective without sacrificing millions of dollars in annual revenue to state coffers, 3,500 family-sustaining jobs or the prosperity of Pennsylvania’s family-owned beer distributors. Modernization.
The modernization plan would offer state stores the flexibility to extend Sunday hours and offer consumers deeper discounts and wider product selections. Some of these initiatives already have been introduced in the state House and have garnered bipartisan support. And according to the PLCB, these options alone would generate an estimated $35 million in the first year of implementation.
Consumers don’t want higher prices and smaller selections. Pennsylvanians want increased convenience and reasonable prices. Quick action on the modernization plan would give consumers both, without jeopardizing jobs or family businesses. ••
State Rep. Ed Neilson represents the 169th Legislative District.