The Pennsylvania Liquor Control Board needs to go

The Pennsylvania Liquor Control Board (PLCB) is a governmental agency who has been in debt for the past three fiscal years. For the 2011-2012 Fiscal Year, the PLCB was in debt $9,818,525. The PLCB's only job is regulating the sale of liquor. It is beyond my comprehension how anybody can fail to make money selling liquor, with a monopoly, in a recession. It has long been known that there is an inverse relationship between economic strength and alcohol consumption and at the peak of the Great Recession the PLCB lost money selling liquor. Pennsylvania should privatize the sale of liquor for the following reasons:

First, the people support privatizing liquor. A poll conducted by the Commonwealth Foundation found that 61% of people favor ending governmental control over liquor sales. Of the people who favor privatization, 33% are support because they believe less government regulation is best. 29% of people support privatization because it is more convenient. 17% of people supported privatization because it worked in other states. Now it could be that the people polled had never used alcohol. It is a very good point, but people polled had used liquor. Data shows that there is a direct correlation between the time spent in a state-run store and the support for privatization. Of people who purchase alcohol weekly, 77% support privatization. Of people who purchase it monthly, 71% support privatization. Of those people who only purchase alcohol a few times a year, 66% support privatization. On the flip side, of the people who never purchase alcohol, 35% support the measure while 58% oppose it. Even people we think would oppose privatization support it since privatization would diminish their power. 58% of union households are in favor of privatizing liquor stores. In the end, the privatization of liquor stores is supported by the populous and elected officials have an obligation to listen to their constituents.

Second, the privatization of liquor stores will increase the sale of liquor in Pennsylvania. I am not saying that more liquor will be consumed, only that the consumed liquor will be sold in Pennsylvania. The PLCB's numbers show that consumers purchase about 25% of all their liquor out of state. Surveys have shown that in Philadelphia 45% of residents purchase much of their liquor out of state. Out of state sales represent the loss of $180 million from the Pennsylvania economy. In other states which privatized liquor, it was seen that more liquor was bought in state with the same consumption. In Washington, the in state sale of liquor increased from 13.2 million liters to 13.6 million liters in the days after liquor was privatized. The privatization of liquor would bring out of state liquor sales instate.

Third, Pennsylvania should privatize liquor stores because the PLCB does not make any money. The PLCB wants you to believe that without them, money will dry up. Ending the PLCB's control over the sale of liquor could be good for citizens. Over 80% of the PLCB's "profits" are created by taxation. The remaining "profit" comes from artificial markups. The PCLB produces absolutely nothing. Every single dollar it collects is taken from taxpayers and consumers. It's funding goes to extremely wasteful initiatives. There are hundreds of examples of waste, but these are some of the biggest: 

1. Mission conflict: the PLCB is tasked with both promoting alcohol consumption and educating people about overconsumption. They operate like a pyromaniac teaching about fire prevention.

2. Advertising campaigns: the PLCB ran advertisements implying that rape victims who drink to much should be blamed for their rape. The cost: $656,000. 

3. The "Wine Shrine:" Taxpayers pay for a beautifully crafted room where "experts" can go to taste wine. The cost: $35,000. 

4. Free liquor for empty bottles: State liquor stores have the policy where you can drink a beer, break the bottle, and return it to the store. They will then give you a beer, free of charge, no questions asked.

5. No freedom to choose: we cannot decide what to drink. That must be the government's job now.

6. An iPhone App: the PLCB spent $100,000 creating an app which will compare the cost of a bottle of wine in Pennsylvania against the same wine in New Jersey or Delaware. Sadly, it does not give the quickest directions to New Jersey or Delaware. 

7. Breathalyzers: going against the recommendations of an advisory board, the PLCB invested in kiosks so state employees could determine the sobriety of a person before they bought liquor. The program costed tax payers millions of dollars with absolutely no benefit.

In contrast, privately owned liquor stores could produce more revenue because they are more efficient. At the same time, private industries must pay taxes to Pennsylvania. In sum, private companies have an incentive to not be wasteful. Every dollar they lose is a dollar out of their pockets. Every dollar the government loses is a dollar out of somebody else's pocket.

Fourth, the PLCB does not make citizens of Pennsylvania safer or using less liquor as was its intent. Pennsylvania has the strictest government control over the liquor industry and there is no correlation between state control and alcohol use. A study by Dr. Antony Davies and John Pulito of Duquesne University concluded that there is no positive link between state control of liquor and underage drinking, binge drinking, and DUI fatalities. Another study examined 49 states over 21 years. It found that states with privatized alcohol markets have much lower alcohol-related fatality rates. The privatization of alcohol sales in Pennsylvania could save lives. State control over liquor does not cause less consumption of liquor and can correlate with higher alcohol related fatalities.

Fifth, the privatization of liquor in Pennsylvania could create hundreds of jobs and cause investment in private industry. If liquor stores were privatized, first the state run stores would be taken out of operation. There is a demand for alcohol and private industries would rise. The private stores need money to operate, so they find investors. Private liquor stores have economic potential, so banks and individual investors would likely invest in them. The stores need workers to operate. According to a study conducted by the PFM Group, private businesses will likely hire many current PLCB employees. Assuming each store only hires three employees, it could still replace the entire workforce in the current system. For example, if the state issues 2,000 liquor sale licenses and each business hires three workers, then 6,000 jobs are created and there is a gain of 2,300 jobs. By privatizing the sale of alcohol, millions of dollars would be invested into the economy and hundreds of jobs could be created.

Pennsylvania House Bill 790 calls for the privatization of the sale of liquor in Pennsylvania. On March 21st, 2013, it passed the Pennsylvania House and is now going through the Senate. HB 790 will likely meet opposition. Every Democrat in the House opposed the measure and it is not likely the opinions of Democrats will change. There will also going to be opposition from the Senate Law and Justice Committee which oversees the PLCB. It's chairman Senator Chuck McIlhinney has recently stated: "if I were still in the House, I would have voted against [House Bill 790]." Reasons why this is have been stated. Democratic Representatives voted against the measure. They believe that privatization will cost state store clerks their jobs, it will cause the state to lose out on 170 million dollars annually, and it will cause confusion pushing customers to travel to different states to buy liquor products. The first two arguments have been refuted. The third argument against privatization is a characteristic of the current system. Keeping the system offers no opportunity for change. I believe Representative Warren Kampf (R., Chester) sums it up: "[he] support[s] this legislation because [he] think[s] it starts treating Pennsylvanians like the adults that they are." The the privatization of the liquor industry treats people like they can make choices for themselves. While the current legislation is not perfect, it at least offers an opportunity for change.

Marc Connuck

Libertarian Party of Bucks County