Here is why liquor privatization failed: Wendell Young IV

By Wendell W. Young IV

Having lived through the liquor wars for better than 30 years now, a handful of constants persist, most notably the Capitol’s late night equivalent of k-rations: greasy pizza and cold coffee.

Privatization produced plenty of tired sport clichés and countless rumors of deals for votes, some of which were actually true. And, once again, after the smoke cleared, a few interest groups promised that the “fight is not over.”

But this go round was different. For the most part, lawmakers waged more of a debate and less of a battle. Those who paid attention learned some valuable lessons about the Pennsylvania Liquor Control Board and the potential impact of privatization.

I believe that, this year, lawmakers can build on the work that has been done and make some important and lasting changes for consumers and all Pennsylvanians.

We learned that privatization will not deliver a huge windfall, as was promised by some proponents, who promised that an auction of the licenses was going to generate between $2 billion and $6 billion.

Those rosy estimates dropped and dropped to $800 million before ultimately disappearing entirely. Any ‘”windfall”’ will not make up for the lost revenue provided each year by the LCB.

In the fiscal year that just ended, the agency transferred more than $700 million in profit, taxes and other transfers, including, for instance, funding for the PA State Police Bureau of Liquor Enforcement, to the state.

The Liquor Control Board is too valuable to auction off in pieces, which is why a majority of the state Senate opposed dismantling the agency’s wholesale operations.

We learned that privatization will not ensure lower prices, greater selection and more convenience. Lawmakers from Pennsylvania’s rural areas are now keenly aware of what happened to consumers in West Virginia and Washington State after privatization.

Prices increased across the board, but especially so in rural areas, where few retailers purchased liquor licenses.

We learned that there is no single definition of privatization. The House and Senate considered two radically different pieces of legislation – both dressed up as privatization.

The chambers were not close to agreement – and for good reason. For some, privatization would force hundreds and hundreds of family-owned beer distributors out of business. Thousands of employees who work for these family businesses would land on unemployment, as well.

Dozens of lawmakers agreed that crippling small businesses makes no sense.

We learned that Pennsylvanians are paying attention. Throughout the debate, after each legislative hearing and debate about what privatization would actually do to our state, support plummeted.

Today, more Pennsylvanians support proposals to modernize the agency and/or keeping our current system intact than privatization, according to polling.

Modernization is not complicated – and it’s not ideological. It’s just common sense and, at one point in time, the Corbett administration agreed that it makes sense to improve the system we have in place.

Consumers have every right to demand direct shipment of wine to their homes – and we can give it to them. Sunday stores are a welcome improvement. We should have more stores open seven days a week and we should be able to expand Sunday hours.

Consumers want more convenience, and we can give it to them by having stores inside and next to grocery stores and beer distributors.

Many Pennsylvanians play the lottery, so why wouldn’t we offer self-service lottery ticket sales in our stores?

The Liquor Control Board should be allowed to take advantage of the same flexible pricing that virtually every other retailer uses to price goods based on consumer demand. The agency’s procurement guidelines need to be updated, as well, to generate more savings.

These are just a few of the many common sense and bipartisan proposals that were floated in recent months.

I am not naïve enough to believe there is universal agreement on what to do with the Liquor Control Board; or how beer, wine and spirits are sold in our Commonwealth. We barely have consensus on what day of the week it is.

On behalf of the 3,500 United Food and Commercial Workers union members who work in the wine and spirits shops, I am hoping that this year ends differently. Consumers and all Pennsylvanians deserve as much.

Wendell W. Young IV is the chairman of Local 1776 of the United Food and Commercial Workers Union.

Go To: http://www.pennlive.com/opinion/index.ssf/2013/07/heres_why_liquor_privatization_failed_wendell_young_iv.html