Tuesday, May 17, 2011

Time for Harrisburg to Get Out of the Liquor Business

Currently in the state of Pennsylvania, the state runs approximately 625 stores statewide that control and sell all liquor and wine in the state.  This has been the policy in the state since Governor Gifford Pinchot’s administration in 1933, which subsequently was the end of prohibition.  Governor Pinchot’s original intention of the Liquor Control Board (LCB) was to make buying alcohol as inconvenient as possible as he viewed alcohol as a drug.  The current Governor, Tom Corbett said in his first budget address, “My administration is committed to a study that looks at how best to get us out of a business we should never have entered.  I'm talking about the liquor business.”

The current system, which provides for the government monopoly of the business of selling spirits and wine, has been hotly debated as of late.  Just last month Representatives Mike Turzai and Dwight Evans debated the issue.  The Republican Turzai is the Representative in the legislature pushing privatization, while the Democrat Evans is pushing “modernization.”  This so-called "modernization" calls for allowing more government-run stores to be open on Sundays, expanding store hours on Sunday, allowing direct shipment of wine and liquor to consumer’s homes and allowing a flat 30 percent markup to vary from product to product.  The modernization plan also allows for more George-Orwell-1984-style “wine kiosks” that allow customers to buy wine in Red-Box-DVD-style machines by submitting their ID and a breathalyzer test where they must blow .02 or below.  If you’ve started either laughing hysterically or throwing your mouse against the wall, then you’ve joined the club to rid Pennsylvania of the LCB.  Critics of the privatization plan that Turzai has presented point to the loss of revenue as the primary reason to oppose the plan.  They claim that the current $500 million will be cut down considerably by Turzai’s plan.  The problem is not the potential lost revenue (a theory debunked by the Commonwealth Foundation), the problem is the very fact that the state, in a leviathan-like action is controlling an entire industry and using that industry to hoard money for the state.  Governor Corbett hit the nail on the head when he said, “This isn't about the money. It's about the principle. Government should no more run the liquor stores than it should run the pharmacies and gas stations.”  Representative Evans, in his argument for the “modernization” of the LCB, claims that one of the state’s functions related to the LCB is to “have a system that protects the public.”  In this argument, Representative Evans has gone completely off the tracks.  The Pennsylvania state government should not be hoarding money in the form of monopolizing a market, but it should be allowing for a free-market approach to liquor sales.  Privatizing the industry is true modernization.  So to all of you legislators in Pennsylvania who are on the side of government monopolies and public sector hoarding, it’s time to get out of the liquor business.


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