Featured Post: “Top Six Lies About Pennsylvania Liquor Reform”
HARRISBURG — Republican Party of Pennsylvania Executive Director Mike Barley released the following statement regarding the PA GOP’s newest online project, the PA GOP Research and Rapid Response Tumblr:
“Pennsylvanians deserve to know that Kathleen Kane refused to answer media questions from the podium after holding a politically-charged press conference to reject the Governor’s lottery contract. Pennsylvanians deserve to know when a Democratic member of the Pennsylvania Senate calls selling liquor one of government’s “core services.” Pennsylvanians deserve to know President Obama’s pay-to-play policy where Democratic donors who give $500,000 to President Obama’s Organizing for Action group will get special access to the President. PA GOP Response will help do just that,” Barley said.
“In addition to holding Democrats accountable to their disastrous policies, PA GOP Response will also provide fact-based information to fight the numerous lies and distortions shamelessly promoted by the Pennsylvania Democratic Party and its allies. We look forward to vigorously investigating and debunking their smears one fact at a time.”
FEATURED POST: Top Six Lies About Pennsylvania Liquor Reform.
LIE #1: Our system is just fine the way it is and Pennsylvanians don’t want change. Opponents insist that our state stores are functional, or that a few “modernization” tweaks will be sufficient to get our Prohibition-era system into the 21st century.
- FACT: Two-thirds support liquor reform in Pennsylvania. Pennsylvanians are tired of being one of only 2 states without a modern system. Citizens in 48 other states enjoy laws that allow better prices, greater choice and consumer convenience when purchasing alcohol. Pennsylvanians are ready to join the 21st Century. (Tim McNulty, “Privatizing Pennsylvania alcohol sales broadly popular in poll,” Pittsburgh Post-Gazette, 02/12/2013)
- FACT: State stores are unprofitable. From 2001-2010, the costs of state stores outpaced the growth of sales by 2% per year. The agency actually ended the past fiscal with negative $9.8 million in net assets. (Office of the Budget, “Liquor Privatization Analysis,” Commonwealth of Pennsylvania, pg. 30-31, 10/03/2011)
- FACT: State stores so-called “profit” is actually just taxes. According to the Commonwealth Foundation, “more than 80 percent of the PLCB’s $500 million in “profits” is generated from taxes and the rest is taken out of the pockets of Pennsylvania consumers and taxpayers through “markup” charges.” (“Liquor Privatization: Myths and Facts,” Commonwealth Foundation, 02/21/2013)
- FACT: Pennsylvania citizens are leaving Pennsylvania to buy alcohol. Millions of dollars are lost each year in cross-border alcohol sales. Currently, Pennsylvania residents admit to crossing into New Jersey, Maryland, Ohio and other border states for greater selection, better prices and simple convenience to purchase alcohol. According to the LCB’s own survey, 45% of residents in Philadelphia and the collar counties will cross the border to purchase their alcohol needs. (“CF Study: Booze Border Bleed Loses Billions in Taxes, Sales,” Commonwealth Foundation, 09/01/2011)
- FACT: The LCB’s private-label wine program has been mired in controversy. The LCB decided to create a controversial private label wine that puts taxpayers on the hook for costs for marketing and production of a wine made in California. At the LCB’s direction, these government funded out-of-state wines are competing directly with Pennsylvania wines. (Kari Andren, “Lawmakers express sour grapes over LCB in-house label,” Pittsburgh Tribune-Review, 02/27/2013)
LIE #2: Thousands of jobs will be lost forever and unemployment will increase. A favorite claim by union bosses who profit from the status quo.
- FACT: Jobs will actually increase and shift to the private sector. Doubling the amount of liquor store licenses, in addition to increasing the sale, transportation and storage of alcohol, requires quality management and retail workers. Other states making the shift have seen these jobs come with comparable wages. (Office of the Governor, “Governor Corbett Announces Liquor Privatization Plan Highlighting Consumer Choice and Convenience; $1 Billion Proceeds to Education,” Commonwealth of Pennsylvania, 01/30/2013)
- FACT: Former state store employees will move to front of the line. Tax and other incentives will be in place to ensure hiring of former state employees, in addition to a demand for qualified managers at new stores. The plan also puts safeguards in place to transition LCB employees into other state government openings. (Office of the Governor, “Governor Corbett Announces Liquor Privatization Plan Highlighting Consumer Choice and Convenience; $1 Billion Proceeds to Education,” Commonwealth of Pennsylvania, 01/30/2013)
LIE #3: Privatizing state-run liquor stores will increase alcohol consumption and create problems.
- FACT: Studies show little correlation between government control of access to alcohol and alcohol-related deaths, health and social problems. Statistics from states where alcohol is available in convenience and grocery stores show little relation when compared to Pennsylvania. (Katrina Anderson, “Liquor Privatization: Just the Facts,” Commonwealth Foundation, 02/16/2013)
- FACT: Governor Corbett’s plan strengthens alcohol enforcement and penalties for violators. Government’s primary responsibility in the alcohol business should be regulation, not turning a profit. As a result, Governor Corbett’s plan strengthens alcohol enforcement and penalties for those who sell alcohol to intoxicated individuals or minors. Those who choose to violate the law for a second time will have their liquor license suspended. Alcohol enforcement funding for the State Police will be increased by $5 million, funding for treatment and prevention will see a 75% increase and the process to shut down “nuisance bars” will be restructured. Governor Corbett’s plan returns the state to its proper role as regulator, not seller. (Office of the Governor, “Governor Corbett Announces Liquor Privatization Plan Highlighting Consumer Choice and Convenience; $1 Billion Proceeds to Education,” Commonwealth of Pennsylvania, 01/30/2013)
LIE #4: State stores make money and benefit taxpayers. Democrats claim that the current state-store system is a revenue builder for state government and should be left in place.
- FACT: Liquor reform carries greater benefits than the current state-owned system. Through privatization and the auctioning of licenses to the private sector, more than $1 billion in revenue will be generated to commit to education. Tax revenues will still be collected by the state, including new revenues from doubling the number of liquor store licenses, increasing the number of jobs required to store, transport and sell and through greater convenience for buyers. (Rep. Ryan Mackenzie, “A Thoughtful Analysis of the Proposed Liquor Privatization Plan,” Pennsylvania House of Representatives, 02/14/2013)
- FACT: Though licensing fees, revenue to the state would increase. Compared to the state-owned system, privately-owned liquor stores would produce the same revenue if not more to the state from additional taxes and licensing fees. (“Liquor Privatization: Myths and Facts,” Commonwealth Foundation, 02/21/2013)
LIE #5: Prices will increase in the private sector. Opponents claim that prices for wine and spirits will be higher in the private sector because government won’t be around to regulate it.
- FACT: Competition benefits the consumer. This is a basic economic principle. The more competition among stores for consumers, the lower prices will go to generate business. Liquor reform benefits the consumer because it ends the government’s monopoly on setting the price for wine and spirits.
- FACT: Savings will yield other benefits to consumers.” While opening up liquor sales would lower prices, there is another key benefit of Corbett’s plan — time savings for consumers. Consider a light recreational drinker who makes 15 separate trips to wine and beer stores in a year. If that individual could purchase beer and wine when buying groceries instead of having to make a separate trip, he or she could easily save three hours per year. With an opportunity cost of $10 an hour, this individual is now $30 better off at the end of the year. Alternatively, you could think of the current system imposing an additional $2-per-trip tax on each buyer. (“Rousu, Matthew. “Op-ed: Lost jobs from liquor privatization not necessarily bad.”, Harrisburg Patriot-News, 2/17/2013.)
LIE #6: Beer distributors will go out of business. Opponents claim that beer distributors will suffer under this new plan.
- FACT: Beer distributors will be placed first in line to upgrade their licenses. Based on the current law, beer distributors are forced to only sell beer by the case. Under this new plan, beer distributors can upgrade to an “enhanced” license that will permit them to sell beer, wine and even spirits in one location. This “one-stop-shopping” model will make existing distributors competitive a post-reform world. “Tom Mehaffi, who owns Breski Beverage distributor in Dauphin County, says package reforms would help him satisfy more customers. He offered one example of why customers sometimes don’t want to spring for a whole case. ‘If you take Dogfish Head 120 Minute IPA, it’s over $100 a case. No one really wants to purchase and try that beer at $100 a case and take the risk and say, ‘ooh, I didn’t like this,’ he said.” (Wilson, Mary. At lager heads: Pa. beer distributors stoutly oppose Corbett privatization plan. Newsworks.org. 2/28/2013.)