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Proposal is toxic policy

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By Lee Schalk & Brandon Arnold
Thursday, April 10, 2014, 8:55 p.m.

After Harrisburg's failed attempt to privatize liquor sales last year, Keystone State politicians are now considering partially liberalizing the sale of alcoholic beverages. Pennsylvanians shouldn't pop any corks just yet, as this compromise legislation would come at a steep cost to taxpayers.

With this effort, the Senate is indeed taking a few steps toward increased convenience. Consumers would be able to purchase beer and wine from grocery stores or have wine delivered.

But the plan does not account for the reduced need for state-run stores. Rather, the proposal's authors have blundered into an expensive and distasteful mix of policies.

If passed in its current form, the compromise legislation would unleash a flood of new state spending, pad the rolls of government employee unions, and empower the corruption-tainted Pennsylvania Liquor Control Board (PLCB).

The proposal's most troubling provision could dramatically expand the number of government-run stores, which currently cost approximately $400 million per year to operate. By requiring the PLCB to create new state-run establishments within or near grocery stores “whenever possible,” the plan effectively writes a blank check for the PLCB to create an unlimited number of new stores.

But couldn't this overhead be easily offset by increased alcoholic beverage sales? Not quite.

In reality, the plan would make that next to impossible. Ramping up the number of state-run stores would actually reduce the amount of sales that occur at each location by spreading business across more outlets. Expanded hours for new and existing stores would necessitate additional taxpayer money to hire more employees. And yes — workers at state-run stores would find themselves with a decreasing workload as consumers have their needs met by private establishments.

The proposal's authors, in an attempt to satisfy all stakeholders — or perhaps to pay off existing powers uninterested in serving consumers — would approve hiring new government workers and opening new state-run stores at the exact same time that the demand for both would fall due to competition from privately run outlets.

Of course, this competition would be limited by price mandates on wine, as set by the PLCB, and the entire spirits portfolio would remain under the government's thumb.

Keep in mind: The PLCB's former leaders were found guilty of corruption just last month!

Responsible lawmakers should not empower a scandalized agency whose officials lined the pockets of their friends and family on the backs of taxpayers.

It's no secret that government employee unions have had a dominating impact on the privatization debate. If this proposal passes, they would stand to make huge gains. While consumers would see some benefits like the changes in laws dealing with wine sales, these modest gains would be negated by the expanded role of state stores and the strict rules limiting the flexibility that retailers could provide.

Ultimately, this expensive and illogical concoction would allow lawmakers to kick the can of true privatization down the road for years to come — maintaining the state-run system and pitting its stores against private businesses. It's time to serve taxpayer and consumer interests first.

Lee Schalk is state affairs manager and Brandon Arnold is vice president of National Taxpayers Union, which has over 17,000 members in Pennsylvania.

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