Rep. Sims on Liquor Privatization: “This is the System We’re Stuck With”
During his Tuesday budget address, Gov. Tom Corbett reiterated his proposal to privatize Pennsylvania’s liquor monopoly and funnel the cash infusion thus produced straight to the school system. “I can think of no better use for the proceeds created by getting us out of a business we should never have been in than to put those dollars toward the essential responsibilities of state government,” he said. “That is why I have proposed that, as we phase the commonwealth out of the liquor business, we put that money toward education.”
As we noted last week, the administration estimates $1 billion would come from the sale of wine and spirits stores, in addition to revenue that would be generated by selling liquor licenses.
To many, Corbett’s suggestion makes sense. About 2/3 of Pennsylvanians, in most polls conducted on the issue, would like the state out of the industry. After all, we’re one of only two U.S. states in which the government controls the retail and wholesale of liquor. But the process of actually getting out of the business may be different—and much harder—than it sounds.
“Here is the truth of the matter,” says state Rep. Brian Sims (D-Philadelphia). “If you and I were going to sit down and rewrite our state’s constitution right now, we would never, ever put Pennsylvania in charge of selling liquor in the state. But it is so engrained in our system right now that I don’t think that selling it off for a billion dollars is going to see us recapture enough revenue in the long run to make it worthwhile.”
The governor’s plan has been rejected by the Pennsylvania State Education Association’s president, Mike Crossey, who argues that linking “liquor store privatization to school funding is just another way of holding students hostage to the governor’s political agenda.”
On the other side of the aisle, the conservative Commonwealth Foundation has endorsed Corbett’s plan, as they often do with his privatization proposals. “You would think that the Governor’s idea to dump $1 billion of the resulting revenue into public education would make the teachers unions jump for joy,” writes foundation president Matt Brouillette in an email blast. “It is evident that the only thing more important to the government union bosses than money is political power and ideological purity.”
Liquor privatization has been championed by a numerous state Republican legislators recently; Rep. Mike Turzai (R-Allegheny) introduced a privatization bill last session, but it never came up for a vote. Meanwhile, we’re hard-pressed to find a Democrat who might even consider voting for state alcohol reform.
“You mean booze on every block?” rhetorically asks state Sen. Vincent Hughes (D-Philadelphia). “That should pretty much sum it up. According to estimations from folks in the industry, it would take about 2,000 locations where you can buy booze in some form or fashion, and expand it to about 20,000 locations, and that is unacceptable.”
Hughes makes an expanded alcohol market sound like Season 3 of The Wire, in which drugs are legalized on Vincent Street in Baltimore and everything goes to shit. “You’d have to increase enforcement capacity to monitor all these different locations, from every 7-11, every Rite Aid, every neighborhood store, every hole in the wall that figures out how to get a license. You’d have to police that and monitor that,” he says.
Then there’s the big elephant in the room: the United Food and Commercial Workers Local 1776, whose members staff the state’s wine and spirits shops.
“[Privatization] almost virtually eliminates an entire union,” says Sims. “More than 5,000 really quality union jobs. And I think more importantly, the revenue that we see from the sales of liquor is just simply not going to be made up with one single sale. We get four, five, six years out, and then we have a massive budget gap again. And then what do we sell off to make up for that?
“I think this is the system that we’re stuck with,” he says. “But the system has worked really well for us.”