The Big Lies

Pro-PLCB arguments, fresh from the source

Updated 2/16/13: see last point

Privatization is on the way again, so this of course means that the anti-privatization forces will be beating the drums to keep things just the insufferable way they are, headed by UFCW Local 1776 President (for life) Wendell W. Young IV and every Democrat in the Pennsylvania Legislature, assisted by an unholy alliance of State Store clerks, beer distributors, teetotalers, social conservatives, and unaffiliated union members.

What that also means is that the same ludicrous lies will be trotted out in defense of the indefensible (see my recent post on Joe Da Ex-CEO Conti below). I can predict what will be said like I can predict the rising of the sun; these guys are nothing if not reliable in what they have to say, and they always, always stick to the script. Therefore, as a public service, I've undertaken to tell you what the Big Lies will be, why they're Big Lies, and how you can respond to them. If someone says them to your face, politely rebut them. If someone says them in a letter to the editor, write a response (not a comment on the newspaper's website: even fewer people read them than read the letters in the paper!). If someone uses them in an article or television story, SEND AN EMAIL IMMEDIATELY to correct them. You can't win if you don't say anything. We CAN win this, with the truth.

The $500 Million Lie: The PLCB makes $500 million in profits every year that goes into the State's General Fund. All of that money will be lost if the State Stores are privatized!

•  The Truth: This is a multi-part lie. First, of the roughly $500 million that wine and spirits sales (I'm going to refer to "wine and spirits" as "booze" from now on to save time) bring to the General Fund in a year, about $400 million of it is taxes. Those taxes will continue to come in; no change in that is proposed. (The pro-monopoly group will tell you private businesses don't pay their taxes: if that's true, then it's a much broader problem than just booze sales. Fix it at the Department of Revenue level.) Second, the remainder isn't actually "profit." The Legislature tells the PLCB how much it's going to "contribute," and they come up with it. If it's "profit," fine; if they don't have enough, they come up with it elsewhere, by selling assets, for instance. Finally, if privatization is done right (and the Corbett Plan is close), border bleed will decline significantly as people in southeastern Pennsylvania don't feel the need to cross the border to get better selection, service, and prices...which in turn will mean more taxes coming in, an estimated $140 million. Of course, the big lie is that all of that revenue will go away. It won't, not even a significant part of it. 

The 5,000 Jobs Lost Lie: If the State Stores are privatized, 5,000 "family-sustaining" jobs will be lost. Privatization will create no jobs, all sales will be absorbed by "big box stores" and grocery stores with no additional jobs.

• The Truth: Up-front: this is the toughest point. These are real people, and it's been the hardest thing to deal with: how do we see them back into the workforce? That said...we're not talking about 5,000 full-time jobs. There are around 3,200 full-time jobs involved. The rest are part-time and seasonal, hardly "family-sustaining." Also, while most grocery stores and big box stores will simply add the stocking of beer and wine to their current staff, with a bare minimum of staff added for purchase and selection, there are going to be 1,200 "all-alcohol" licenses under the Corbett Plan, twice as many booze licenses as there are now. Total Wine has said they'll be building stores in PA, and you can be sure that Canal's and Roger Wilco won't want to miss out. No jobs created? Pull the other leg. Will the jobs pay as well as the State Store jobs, with the benefits and pension? Probably not, because jobs in retail don't pay like that in the real world. The union will argue that they should, but the reality is that the union is doing nothing to use these jobs as leverage to improve the lot of average retail workers; they are an isolated island, restricted to those lucky enough to get one of these jobs. They are an anomaly. And when the system is abolished, there will be early retirement packages, there will be preferences for other state jobs, there will be training.

The Union-busting Lie: This is really about busting the union/really about privatizing every government function/really about anything other than doing away with this relic of Prohibition.

• The Truth: Privatization of the liquor stores is favored by over half of self-identifying "liberal Democrats" in the State, according to a recent poll. They clearly recognize that this is a unique case, a government agency that never should have had "control" of booze retail. It is not at all about busting the union (and it has nothing to do with the Governor's desire to privatize the lottery without the approval of the Legislature); it's about getting the government out of retail. The same agency should not be selling alcohol with an eye to maximum revenue, while at the same time "controlling" alcohol sales to "protect" the citizens. This also leads to the PLCB being the major regulator of its main competition: Pennsylvania's wholesale and retail beer business. Two clear conflicts of interest; privatization frees the agency to effectively regulate retail alcohol beverage sales.

The Control Lie: State control of wine and spirits sales keeps Pennsylvania's citizens safer than private sales could. 

• The Truth: In underage drinking, in DUI, in deaths attributable to alcohol, Pennsylvania's rank is only average; at best, on the high side of average. There may be a few categories where Pennsylvania does well, but it's a "cherry-picking" proposition; really, we don't do any better than the surrounding states, which have private sales. Control is ineffective, and anyone could guess that: "control" is only imposed on off-premise wine and spirits sales, not on-premise "by the drink" sales, and not on any beer sales. Those sales are all private. 

The Underage ID Lie: State Stores are the best defense against underage sales; employees check over a million IDs every year.

• The Truth: First, we only have the PLCB's word for this. The police are not allowed to conduct "sting" operations in the State Stores, as they are in bars and beer distributors. These numbers are all self-reported. Second, the State Stores don't even do as good a job as Wegmans. The New York-based supermarket chain requires an ID for every single sale of alcohol. They will not sell you as much as a sixpack of beer without swiping your ID through an electronic reader, no matter how old you are. The State Stores don't ID on every sale. Finally, research shows, over and over, that underage drinkers get the vast majority of their booze from family and friends, and from using fake IDs in bars...not by purchasing over the counter in stores. This is a very small problem, and private sellers are already on top of it. Corbett's plan includes carding for every sale. 

The Liquor Store On Every Corner Lie: Privatization will bring a seedy liquor store on every corner. Wendell W. Young IV has said it, and legislators have repeated it.  

• The Truth: First, they'll also tell you that all the licenses will go to "big box" stores: guess they don't really know what's going to happen. Second, competition will keep that from happening; a community can only support so many stores selling the same products. You don't see a gas station on every corner, or a coffeeshop on every corner. The very idea of a liquor store "on every corner" is ridiculous on the face of it; an obvious scare tactic. Third, local zoning laws will still be in effect. This is perhaps the hollowest of the Lies.

The Windfall Lie: Corbett says this will bring a $1 billion windfall. Last year they said it would be $2 billion. When (insert state that is nothing like Pennsylvania here) privatized, they only got (insert small number here). Why sell an asset?

• The Truth: It doesn't matter what the number is. The State Stores aren't worth anything, except for the value of the inventory and the fixtures. The stores are all leased, as are the warehouses. The monopoly is the only thing worth money, and honestly, it never should have existed. Corbett's plan will make a large sum of money, and continue to bring in more every year. And it's all gravy, above the continuing flow of revenue from liquor taxes and sales taxes. What is the asset that we are supposed to own? A patronizing, annoying monopoly that would be illegal if it weren't for a traditionally overactive interpretation of the 21st Amendment.

The Rural Deprivation Lie: Only the PLCB supplies the state's rural areas with a full selection of wines and spirits; private stores won't go to those areas because they won't make enough money, and Pennsylvanians will have to drive 50 miles to buy wine and spirits.

• The Truth: First, and foremost, it is not the function of government to supply rural Pennsylvanians with booze, anymore than it is to run a jobs program called the State Stores. The very idea is laughable. Second, has anyone had a look at the job the PLCB is doing supplying rural Pennsylvania now? Take a look at some of the rural counties: Adams: 1 store. Bedford: 2 stores (one of which is open 3 days a week, from 11 to 6). Cameron: 1 store. Clinton: 1 store. Columbia: 2 stores. Elk: 2 stores. Forest: 2 stores. Fulton: 1 store. Greene: 2 stores. Huntingdon: 2 stores. Juniata: 1 store. Mifflin: 1 store. Montour: 1 store (okay, that one's not so shocking!). Perry: 2 stores. Pike: 2 stores. Potter 2 stores. Snyder: 1 store. Sullivan: 1 store. Union: 2 stores. Wyoming: 1 county. That's 20 counties with 2 or fewer stores. What kind of rural service is that? Now...under Corbett's plan, these counties will get as many all-alcohol licenses as there are state stores, or as many as there are beer distributors, whichever is more. They may tell you that no one will take the risk of paying for the license, that they can't make enough in bucolic PA to pay it off. But remember: the demand for spirits at taverns in those counties would almost certainly mean that an all-alcohol license would indeed be profitable enough for someone to take that risk. And the proposal allows wine sales at supermarkets, restaurants and taverns, and "big box stores," which means wine would be much more available in these counties. Third, selection? Ever seen the "selection" at rural grocery stores? It ain't like Whole Foods, and people who live in the country are used to that. Private stores will stock in response to local requests and needs, instead of the top-down inventory currently imposed from Harrisburg with no attention paid to local preferences. This is a bogus point: things aren't that great now, and they'll actually get better. 

Got any more lies? Bring 'em on, we'll take them, and tell the truth.