December 2010 Whip Report - State-Owned Liquor Stores are a Relic of Pennsylvania’s Past
By Stanley Saylor (R-York),
Pennsylvania House Majority Whip
The new year will bring enormous change to Pennsylvania. A new administration will take the reins of state government and offer a new agenda to solve the fiscal crisis we are facing. As the new majority in the House of Representatives, my Republican colleagues and I must offer innovative solutions to our problems. We must examine every option for downsizing state government, reducing our spending and increasing revenues without raising taxes. One solution that will top our agenda and is supported by Gov.-elect Tom Corbett is a proposal offered by House Majority Leader Michael Turzai (R-Allegheny) to privatize the sale of wine and spirits under the Pennsylvania Liquor Control Board (PLCB). I am proud to be the co-sponsor of this important legislation.
State-owned liquor stores are a relic of the past. Only one other state, Utah, owns and operates all wholesale and retail sales of wine and spirits. We need to ask ourselves if this is a business in which the state should be involved. Does it make sense for the PLCB, which is responsible for enforcing Pennsylvania’s alcohol laws and trying to curb alcohol consumption, to also be responsible for trying to increase alcohol sales in Pennsylvania? Clearly, the answer is no, and according to a recent Quinnipiac University poll, a majority of Pennsylvanians agree. According to that poll, 66 percent of Pennsylvania voters are in favor of selling the state’s 625 liquor stores.
House Republicans have a plan to get Pennsylvania out of the liquor business. This proposal would generate a minimum of $2 billion in upfront revenue through the auctioning of 750 retail licenses and 100 wholesale licenses. In addition, under this proposal the influx of annual revenues to the General Fund will be maintained or even increase.
Pennsylvania has operated for years under a myth that the PLCB provides a large infusion of money to the General Fund. On average, the PLCB has transferred only $90 million annually to the General fund over the last decade. Taxes on the sale of wine and spirits currently generate $375 million annually. Those taxes will be generated regardless of whether the state or private industry is in control of liquor sales. Our plan will bring in an estimated $500 million annually by eliminating the current tax structure, including the 18 percent “Johnstown Flood” tax, and replacing it with a structure for taxing the sale of wine and spirits that is similar to those used by the majority of other states.
It is important to note that our plan would not eliminate the PLCB. Instead, it refocuses the PLCB’s mission on enforcement, licensing, inspection and alcohol education. Our proposal strengthens law enforcement supervision of sales and enhances alcohol safety and awareness programs for buyers and sellers. As an additional safety measure, state and local police will have concurrent jurisdiction to enforce state liquor laws.
Our plan also recognizes that a shift to privatization will have an impact on current PLCB employees. With that in mind, we would put in place a number of opportunities to offer employment support. PLCB employees who want to continue being employed by the Commonwealth would be given preference in applying for vacant state jobs by receiving three extra points on their civil service test score. We would provide tax credits for any private sector employer who hires a former PLCB employee. In addition, we would provide tuition assistance for employees who attend college or technical school.
If we are to move the Commonwealth forward, we cannot cling to ideas from the past. Allowing the private sector to sell wine and spirits will result in better selection, cheaper prices and more convenience for consumers. And, in the long term, it will generate the revenue we need to address the tremendous fiscal challenges we face.
Rep. Stanley Saylor
Pennsylvania House of Representatives
Contact: Sean L. Yeakle
House Republican Public Relations