Privatization Of The State Stores: It’s Now Or Never

Phoenixville Phoenix

On Thursday night, as much of the nation was focused on the excitement of the Harvard men’s basketball team making history, here in Pennsylvania we were making some history of our own. With my colleagues and I in the state House approving House Bill 790, it marked the first time either chamber of the state legislature has passed a bill solely designed to privatize our archaic, state-run liquor system.

The vote, while extremely noteworthy, is by no means the final step in what promises to be a long and arduous process. The bill is now poised to head to the state Senate before it would eventually go to the governor’s desk. However, approval by the Senate is not guaranteed and may be much more difficult than originally thought. Therefore, I am urging Pennsylvanians who agree with me that it is time to end the state monopoly on liquor to contact their state Senators and urge them to permit the free market to flourish in Pennsylvania.

It’s time for Pennsylvania to rebalance its policy portfolio, especially with continued challenging budgets. This starts with refocusing government on core public sector functions and off-loading those better left to the private sector. The state should relinquish its stake in this holding and reposition the adult beverage sector in the marketplace. Not only will privatization improve choice, convenience and cost for citizens, but also it will extricate the state from a product line that clearly is not a core function of government. Government should not be a purveyor of alcohol.

Supporters of House Bill 790, which I have co-sponsored, have gone to extraordinary lengths, nearly unprecedented even, to try to ameliorate ongoing objections of certain interests. For example, beer distributors, many of them small, retail businesses, will be given first opportunity to buy the new wine and spirits licenses before anyone else (literally, anyone else!). These licenses will be at a lower set cost than what other entities will pay. This provides more-than-fair opportunity for these local businesses to sustain themselves as they transition from business models in effect for years under the current system and business conditions.

Another area of considerable concern is the future status of employees in the state store system. Some assert too many jobs will be lost. This is a traditional argument in relation to this proposal, and one well predating the economic downturn. Most prominently raised by labor unions, this objection long has proved a major stumbling block toward privatization approval.

I empathize that current employees should be treated fairly, absolutely, and they will be. Privatization will yield more employment opportunities for workers, as a state store system with 600 stores gives way to a market-driven system of upwards of 1,800 outlets. These private operations all will be seeking to hire employees experienced in the adult beverage sector. Additionally, entities hiring employees of the state store system will be granted a $2,000 per year tax credit for each such employee hired. This credit could be claimed not just by private wine and spirits enterprises, but also by nearly any private sector business.

Second, for potentially displaced state store employees preferring to remain in the public sector, generous provisions will be in place. These state workers will be given boosts and priority opportunities to secure another position within state government. Either way, to support this transition, employees will be eligible for special grants to help further their education and/or receive specialized jobs training.

Finally, protestations that the state will lose a revenue stream are unfounded. Interestingly, some 80 percent of revenue generated by the state store system derives from state taxes. This revenue will remain at least the same, if not actually rise because of increased sales under more favorable conditions. The remaining 20 percent will be more than made up as the state gains from sales of the newly-created licenses and sheds the enormous costs connected with running the state store system.

I urge citizens of the Commonwealth to contact their senators to join in this cause.

Read more: