Ringside: Here's one to privatize Pa. liquor stores

It's hard to find something good to say about Pennsylvania's state stores. But it's harder still to get rid of the government-run liquor and wine shops.

So here's to 2011. With a new governor and House leadership, this could finally be the year Pennsylvania moves out of its Prohibition-era backwater. That's something the majority of shoppers trapped in this bureaucratic monopoly will drink to.

Indeed, there's serious political support building in Harrisburg to privatize the state stores. Incoming House Majority Leader Mike Turzai (R., Allegheny) is the main sponsor of the effort. Having the guy in power as the bill's backer is a good way to secure votes.

The Republican-controlled Senate seems on board with the plan. Gov.-elect Tom Corbett supports the idea, which could instantly boost his popularity and shape his legacy.

A poll last week found that two-thirds of the state's registered voters want the state out of the liquor and wine business.

But don't pop any corks yet. Not even from the champagne purchased out of state.

Efforts to privatize the state stores have failed before. Once under Gov. Tom Ridge, when the Republicans also controlled the legislature. And in the 1980s under Gov. Dick Thornburgh.

Once lobbyists with blank checks start slithering through Harrisburg, anything can happen.

The strongest opposition to privatizing the state stores will be the unions that represent the roughly 4,000 state store employees.

Turzai's bill deals with that by offering tax credits to employers who hire displaced workers, giving preference to workers for other state civil service jobs, and providing tuition assistance for career training.

Of course, over the long run, the elimination of the state store jobs (including patronage hires) will also save taxpayers money when it comes to funding pensions and health benefits.

Opponents of privatization argue that the Liquor Control Board transfers nearly $500 million to state coffers each year. But about $400 million of that comes from taxes that could be generated whether the stores are run by the state or private operators.

The remaining $100 million is what the LCB contributed to the general fund last year. That's a slim profit margin on revenue of almost $1.9 billion. Turzai's bill aims to offset the loss of that revenue with other fees, while also reducing administrative costs.

If anything, Pennsylvania will see more tax revenue because fewer shoppers will travel across state lines to buy alcohol.

Opposition is also expected from anti-alcohol groups, like Mothers Against Drunk Driving, who fear there will be greater access to alcohol and increased sales to minors. This argument doesn't hold a cup of warm beer.

A study by Duquesne University economics professor Antony Davies (fine name, but no relation) found that privatization does not lead to increased DUI deaths and no statistically significant difference in underage drinking or binge drinking.

If anything, having the state in charge of selling alcohol and policing the sale seems like a conflict of interest. Turzai's bill offers several commonsense ways to bolster enforcement.

In the past, issues surrounding the loss of tax revenue and the sale to minors have been enough to kill any efforts to privatize the state stores. But the times are different. The state is facing a budget deficit of about $4 billion next year. Corbett has pledged not to raise taxes.

That means the state needs new ways to generate revenue or cut spending. Turzai estimates the sale of the wholesale and retail wine and spirits licenses could raise $2 billion. That's real money.

Of course, the best argument for privatization is that consumers should enjoy lower prices, better selection, and friendlier service.

Granted, the state stores have made some efforts to become more customer-friendly during the last decade. Hours have been extended and the selection of wines has improved.

But most state stores still look and feel like military commissaries. At the store near my house, many of the wines on sale are often out of stock. The clerks offer little help beyond a muted checkout. And the automatic exit door is broken every couple of months.

Compare that with places like Total Wine just over the state line in Delaware. The store is bigger than a Home Depot, and offers 280 wines just from Napa Valley, often at lower prices. Friendly employees patrol the aisles offering assistance.

And you can purchase wine, liquor, beer, and soda in one place. What a concept. Unfortunately, Turzai's bill does not go that far.

But for Pennsylvania, just privatizing the state stores would be a giant leap forward. Happy days may finally be here again.

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