Delaware County Times
The Pennsylvania House of Representatives recently took a historic step in getting Pennsylvania out of the liquor business. I was proud to join my colleagues in supporting House Bill 790, which privatizes the sale of wine and spirits in Pennsylvania. House Bill 790 gives Pennsylvania residence the convenience enjoyed in neighboring states, raises tremendous amounts of revenue and ends the current Liquor Control Board conflicting responsibilities of enforcing state liquor laws and increasing liquor sales.
The House privatization plan generates approximately $1.2 billion for the commonwealth in upfront money. It would take the current system over 15 years to generate a similar amount of profit. The $1.2 billion is on top of the $465 million in taxes (sales tax and liquor tax) the state-store system currently collects, which are also expected to increase after privatization. These figures don’t even consider all the revenue that will be captured when Pennsylvania residents no longer feel like they need to cross the state border to buy wine and spirits. Moreover, total annual license renewal fees will generate nearly $45 million in recurring revenue and can be increased to cover operating and enforcement costs as necessary.
Altogether, the House privatization plan continues to collect all the revenue that is currently collected, allows fines and license renewal fees to be adjusted to cover future expenses and generates substantial funds from the initial sale of licenses that can be used at the General Assembly’s discretion. Additionally, the state will begin to collect increased business taxes under a private system as the state-owned system is not required to pay business taxes.
The House privatization plan also increases accountability on those who sell wine and spirits. Under a privatize system, the license requires a substantial investment and is tied directly to the livelihood of the license owner. If a licensee is caught illegally selling to a minor or intoxicated person, they face the penalty of losing their license. This creates a great incentive for private licensees to prevent the sale of liquor to minors, a safeguard not inherent with the state-store system. The House privatization plan also removes the conflicting LCB responsibilities of enforcing liquor laws and selling more liquor to generate revenue for the commonwealth. Privatization allows the private sector to deal with the sale of wine and spirits and the LCB to focus on enforcing state liquor laws.
Looking at enforcement, critics who argue a state-run system helps prevent alcohol related incidents ignore recent data reported by the federal Centers for Disease Control and Prevention in January 2012 which indicated Pennsylvania has a higher percentage of adults who binge drink than all of our neighbor states — despite our state-run system.
Ironically, those who oppose privatization have also advocated for loosening current LCB regulations and allowing the LCB to sell more liquor to generate additional revenue. Such a proposal is in direct conflict with concerns about increased access to wine and spirits. Those opposed to privatization are grasping at straws to hold on to an archaic system that only serves a select few.
Pennsylvania residents are smart. A sizeable majority of state residents agree it is time to join the 48 other states that allow the private sector to sell wine and spirits. Commonwealth citizens overwhelmingly support privatizing the sale of wine and spirits because it is the right thing to do.
State Rep. William F. Adolph Jr., R-165 of Springfield, is the majority chairman of the House Appropriations Committee.