Governor Corbett is pressing the Senate to send him a liquor privatization bill as part of his administration’s right wing agenda. Liquor privatization would result in a loss of thousands of jobs and a large cut in revenue for the state.
Privatization could mean the loss of 5,000 family-sustaining jobs. Hard working Pennsylvanians depend on the Wine and Spirits stores to make a living. If they were to close, these jobs would be eliminated, putting the financial security of former employees and their families at risk.
The Liquor Control Board (LCB) will provide $700 million in taxes and profit this year alone. Last year, the LCB contributed over $530 million to the state treasury. All taxes are collected 100% at the point of sale, unlike private retailers. With the state underfunding education and other services, we cannot afford to take this large of a cut in revenue.
The safety of Pennsylvanians could be compromised with a switch to privatization. With the possibility of 18,000 new outlets, there will be a higher risk of drunk driving, consumption by minors, and social problems related to alcohol like domestic violence. In April 2012 the U.S. Centers for Disease Control’s (CDC) Task Force on Community Preventive Services stated that privatization leads to increased consumption and increased excessive consumption, and recommended against privatization of alcohol sales. Pennsylvania currently has the nation’s lowest rate of deaths related to alcohol diseases in the country according to CDC.
While the Governor and supporters of the bill insist that privatization will increase convenience, it will have the opposite effect. Big wholesalers will stick to selling the top-selling brands, decreasing variety of selection for consumers.
There is an alternative that would improve convenience: modernization. If the system was modernized in a way that did not force Wine and Spirit Stores to close, consumer satisfaction could be improved while generating $75-$100 million more in revenue for the Commonwealth. This legislation would enhance selection, increase hours, and allow pricing flexibility without costing any jobs.
Even if legislation passes that does not call for the dismantling of Wine and Spirit stores, legislation that expands sales will be just as detrimental. Such legislation would result in less revenue for the stores and would eventually force us into dismantling the system.
Republicans in the Senate are currently working on a privatization bill that will probably be considered sometime within the next week.