Tuesday, July 29, 2014
Inquirer Daily News

Liquor Control Board once again threatened with death

State House Majority Leader Mike Turzai will this week introduce a bill to kill off the Liquor Control Board, the state agency charged with selling liquor and wine in Pennsylvania while competing with no one except maybe New Jersey, Delaware and sobriety.

Liquor Control Board once again threatened with death

State House Majority Leader Mike Turzai will this week introduce a bill to kill off the Liquor Control Board, the state agency charged with selling liquor and wine in Pennsylvania while competing with no one except maybe New Jersey, Delaware and sobriety.

We'll dig into this topic as the debate builds, but at the offset it's worth making the point (one we've made before) that the question on liquor privatization is not just whether to privatize but also how. It's crazy that the government is a monopoly seller of booze in Pennsylvania. But it is. And the state stores are, consequently, a publicly owned asset that taxpayers shouldn't just give away without considering the value of the return.

Value can mean several things here -- it can mean revenue for sale of stores or licenses or it can mean quality of the private industry that springs up to replace the state stores. But these things need to be considered if privatization is going to take place.

Here's one concern along these lines we expressed when Turzai floated a plan for privatization last year:

In order to reach the magic revenue goal of $2 billion, each license the state auctions off will need to go for about $2.6 million. No one's going to pay that much for a license just to compete with lots of other stores. That means the number of licenses will have to stay low . . . and that means Pennsylvania will be replacing a state monopoly with a state-authorized private-sector monopoly, with no incentive to lower prices or widen selection.

Turzai is still estimating $2 billion in revenue from auctioning off liquor licenses, though opponents of privatization say no way.

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Every year, city government spends slightly more than $4 billion. Where does all that money come from? More importantly, where does it go? Are we getting the most bang for our tax buck? “It's Our Money” is a joint project between Philadelphia Daily News and WHYY, funded by the William Penn Foundation, designed to answer these questions.

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