Democrat Paul Costs thinks state stores are great (Pittsburgh, Penn: to buy, taxes)

[ossewa]

A nice compromise solution would be to simply do what Canada does and maintain strict gov. control of hard liquor or "spirits" and liberalize beer and wine sales. The PLCB would remain in existence, satisfying unions and most Dems, entrepreneurs would be able to open wine stores, and small groceries would get a real boost with beer sales. The market would determine whether or not a small wine shop really could provide better service and selection than the government.

[gg]

Originally Posted by Mr. Mon

Honestly, I find it asinine that not only does the state own all the alcohol in the state, but that they feel the need to advertise and pretend that that they're a private business with competition. How much in tax revenue goes toward advertisements and upkeep of stores with bad wine selection?

I also find it equally asinine that energy companies have been given so much free reign in regards to environmental regulation and taxation. A very modest tax to pay for future environmental restoration is not going to send these companies fleeing across state lines. As a State we may want to evaluate what where doing when even West Virginia has tougher environmental standards than we do.

So what we have here is the interest of an entrenched agency and large corporations being considered above that of the citizens of Pennsylvania.

I would prefer no state stores, but I do want to point out that PA's liquor prices are probably better in most cases to our neighbors. Being a single malt drinker, I keep tabs on this stuff. Florida has some better deals, but that is pretty far away. At the moment prices in PA are better overall than most anywhere around here.

I agree that there is no tax on gas drilling. Just a little money to prepare for the inevitable disaster that WILL no doubt happen. I just hope when it does happen, we are informed about it and don't all get cancer from our lovely water supply.

[squarian]

Originally Posted by ossewa

do what Canada does

Beer, wine and spirit sales aren't federal jurisdiction in Canada, so each province decides its own policy. PQ allows private sale of wine and beer. ONT sells "vins et spiriteux" in provincially-owned shops and you buy beer at "The Beer Shop", also owned and operated by the provincial gov't.

[hempfield mania]

"Many myths continue about the privatization of Pennsylvania's state-owned liquor stores. One is that the state government would lose annual revenue from liquor sales. See Wendell Young, speaking on behalf of those who profit from the status quo, cited in a recent editorial:

The current system already brings in more cash than it costs taxpayers, according to Young, some $500 million a year.

Young made similar comments about the revenue from state stores in another article (which noted that the champagne served to celebrate the opening of a state store had to be bought from out of state)

But over 80% of that revenue for state government is from tax revenue - both alcohol taxes and sales taxes. That same tax revenue would be there with privately owned stores. In fact, there would likely be more tax revenue, due to increased sale from improved service and lower prices. In fact, by eliminating the state stores mark-up, the Commonwealth could even charge a higher alcohol tax rate, and still offer lower prices.

Not only would higher tax revenues make up for the state stores "profit" that is returned to the General Fund, but privately-owned liquor stores would pay the state Corporate Income Tax, sales tax on their (taxable) purchases, and local property taxes, offsetting. Not only would privatization net a one-time boon of $2 billion or more, but would likely increase annual revenue for government.

We get all that from privatization, while improving service and having little social impact."

http://www.commonwealthfoundation.org/policyblog/blog_detail.asp?id=4329


Another tidbit using 2006 figures:

"The primary concern to most Pennsylvania policymakers is how any alteration of alcohol
policy will affect revenue flows to the state. The following are top-line observations from the
Pennsylvania Liquor Control Board’s financials to better understand the cash flows inherent to
Pennsylvania’s existing control scheme and where state revenues would be replaced—or
enhanced—under a privately run system:

1. 54% of the PLCB’s reported 2006 revenue to the state is in the form of excise and sales
taxes—which, without any tax changes, would be unaffected by a retail privatization.
This represents a total of $849,471,331.32.

2. The 2006 reported profit of $80 million equates to a profit of $124,416 per state store or
an 11% average profit margin rather than the reported 30% average profit margin.

3. However, the cost to the state of funding PLCB operations (calculated at 5% interest)—
equals $16,341,655—or $25,414 per store. As a result, the real average profit drops
below $100,000 per store and below 10% profit margin ($99,000 and 9%, respectively).

4. PLCB 2006 operating costs (totaling $326,833,110) capture 84% of the revenues from
the state’s mandated 30% liquor tax mark-up—with the remainder being termed ‘profit.’
Under a private system the state would collect 100% of the mark-up.

5. Under a private system, a 5% mark-up would generate the same revenue to
Pennsylvania—$80 million in 2005—as the current system; along with $377.5 million in
state and local tax revenue.

6. It should be noted that to fully understand the total operating costs of the PLCB an
analysis of additional liabilities related to PLCB employees is necessary—including
pension funding liabilities. For example, the 2004 PLCB audit reported a $15 million
liability for workmen’s compensation. Under a private system the state would no longer
be responsible for thousands of PLCB employees’ pensions and other government
employee liabilities.

7. Pennsylvania currently collects no corporate or real estate taxes on the more than 643
state stores—a significant source of revenue replacement or enhancement under a private
system.

8. Recently converted states—Iowa, West Virginia and Alberta—experienced growth in the
number of stores and the number of state residents employed each as high as 300%,
increasing each state’s tax base while shrinking unemployment.

9. The re-sale or reallocation of retail store leases would provide a revenue windfall to
Pennsylvania and potentially redistributing high value locations to purchasers/lessees
who more highly value them—again, improving Pennsylvania’s tax base.

10. A revenue-neutral private system is straight-forward to develop utilizing a make-whole
assessment and distributing it across the number of licenses to be sold/auctioned. A 1991
study calculated a required investment at 29.7% of a store’s current annual sales. 6
West Virginia’s auction realized make-whole revenues of 38.7% in its auction process. "

The first few years may see a net decline in revenue from "stores" until all the kinks are worked out which would be more than offset from the sale of the licenses and after that, with an increased # of stores, corporate and real estate taxes, more sales and excise taxes, reduced liabilities to unionized state store employees, the state will be making even more money than the current $105 million they reportedly netted in 2010.

And although I feel it is a stretch to expect 2 billion from the sale of state store licenses, if that were to happen and all they did with that money was invest it, all they would need would be a little over 5% ROI to exceed the yearly revenue from state stores. 5% is easy to get in a "safe" investment.

[pman]

Originally Posted by h_curtis

I would prefer no state stores, but I do want to point out that PA's liquor prices are probably better in most cases to our neighbors. Being a single malt drinker, I keep tabs on this stuff. Florida has some better deals, but that is pretty far away. At the moment prices in PA are better overall than most anywhere around here.

I agree that there is no tax on gas drilling. Just a little money to prepare for the inevitable disaster that WILL no doubt happen. I just hope when it does happen, we are informed about it and don't all get cancer from our lovely water supply.

I'm for a gas tax but that's seems a bit of a red herring in this thread. I'd just be happy if we had stores with a better wine selection, friendly and intelligent service, and I didn't have to worry whether the wine had been turned to vinegar because the state system didn't see fit to store it properly. If it came down to it and the only way to privatize was to sell off wine licenses and leave liquor in the hands of the state, that's a deal I'd do. there are other problems with the system, particularly the back end with the middleman distributors for both beer and wine/liquor. breweries should be able to self deliver and sell directly to retailers.bars should have complete freedom to choose their distributors. the beer registration should be eliminated. etc, etc.

[Aqua Teen Carl]

Originally Posted by h_curtis

I would prefer no state stores, but I do want to point out that PA's liquor prices are probably better in most cases to our neighbors.

New Jersey, Virginia, and Connecticut's prices are much better than hours. I'm not a whiskey drinker, but when I stock up out of state the prices are about 40% cheaper. Haven't got the same experience in Ohio though.

[gg]

Originally Posted by pman

I'm for a gas tax but that's seems a bit of a red herring in this thread. I'd just be happy if we had stores with a better wine selection, friendly and intelligent service, and I didn't have to worry whether the wine had been turned to vinegar because the state system didn't see fit to store it properly. If it came down to it and the only way to privatize was to sell off wine licenses and leave liquor in the hands of the state, that's a deal I'd do. there are other problems with the system, particularly the back end with the middleman distributors for both beer and wine/liquor. breweries should be able to self deliver and sell directly to retailers.bars should have complete freedom to choose their distributors. the beer registration should be eliminated. etc, etc.

I have not met one knowledgeable person in any state store that knew anything about wine at all. Some pretenders, but it doesn't fly. That is a shame people don't know the business they work, but they just took a civil service test and hoped to get hired someday. They don't care about wine or single malt.

Anyway I am always in favor of smaller government control and freedom. doesn't seem to be a trend in any level of government however, unless you fall for all the silly headlines the propaganda machine loves to spew for fear and votes.

[BrianTH]

I'm a big believer in looking at the latest talking points being spread through coordinated media campaigns to figure out current political strategies. Although is only one data point, when one of our conduits of right wing talking points connects the privatization issue with the extraction tax issue, that does suggest to me that a strategy of combining inaction on both issues may be unfolding.

[gg]

Originally Posted by Aqua Teen Carl

New Jersey, Virginia, and Connecticut's prices are much better than hours. I'm not a whiskey drinker, but when I stock up out of state the prices are about 40% cheaper. Haven't got the same experience in Ohio though.

Sorry, but I think I need to know what you are drinking? I have been pricing online, which you can do very easily, because I was hoping to get better deals on wine and single malts. I have come up empty. I have not tried Connecticut, but that is too far away.

[greg42]

It can certainly vary based on what you're drinking, because the markup here on everything is all the same 30%. If you're drinking something that is typically marked up around the same in other states, then you'll find the PA prices are pretty good. If you drink something that typically goes for a lower markup in other states, then the other states are going to be cheaper.

In fact this is one of the things the LCB chief trotted out recently as he tries to hold on to the power of selling booze across the state. He wants more leeway to set different markups; the fixed markup across the board is actually set by law. (They are allowed to do sales, but I'm not sure if that's LCB acting alone or if it's actually a pass through of a producer special or what.)