Wednesday, June 5, 2013

Money from privatization rolls in out in Washington

Just sent this to the members of the Pennsylvania Senate Law and Justice Committee:
To the honorable chairmen and members of the Senate Law and Justice Committee,
Greetings. I've watched all three of the hearings your committee has held on privatization of the current state monopoly on wholesale and retail sale of wine and spirits. One concern that seemed to come up time and again was that of consistency of revenue. You were presented with a baffling array of projected numbers: how much the Commonwealth would lose under privatization, how much it would gain, the amount various other states have lost or gained by privatizing.

One number that seemed to have escaped notice, however, is this one: $78 million. That's the increase in revenue from spirits sales that the Washington State government has seen in the year since they privatized their state-owned monopoly. If you're interested, the details are here.
(Please note that the $425 million figure in this article includes the $38 million the state made from the auction of retail licenses; the $78 million increase is taxes only.)

So if you're thinking about how privatization will affect revenue, and if that important consideration has an effect on your vote, please remember that privatization -- if done correctly -- can indeed increase revenue. We don't need to speculate. Washington has provided us with a real world experiment, and the outcome shows the benefits of privatization.
Thank you, and I hope you will consider all angles of this issue. I have high hopes of a good outcome from your deliberations, as this is a very important issue for me.

Lew Bryson


Yeah, I know: Washington raised the fees/taxes/grab on liquor, and that may be some of the nut. Trust me: they know that too. But even with higher taxes/fees/blood money, the prices in Washington -- as you'll see if you read the piece linked above -- are still close to what they were before. Without the increases? Who knows how low they might have gone, but the fact is, what kept them down was competition.

10 comments:

Anonymous said...

Hi Lew
I check your blog virtually daily (being a PLCB employee who has posted before) and I've noticed that the comments have been waning. I can't help but wonder if the arch-enemy of privatization is beginning to show its face; antipathy. Now I know you can't judge that from a single blog, but I think people lost hope because, let's face it, it's become a very complicated political issue. And we all know how fast political issues are sorted out. Anyway, even though you and I are at slight idealogical odds, NO one can say you're not trying. Who knows, maybe the death knell of the PLCB is about to ring despite peoples' general loss of interest. If it does, I hope you get the credit you deserve.

Lew Bryson said...

I'm guessing you mean "apathy," but going by the vigorous debate going on in various newspaper site comment forums, I don't think that's the case. More likely it's that I haven't been posting as much, and my general readership has dropped off. Which is fine with me, so long as reporters keep reading the blog and getting ideas; my primary contribution. Don't really care about credit; just want to see this done. Thanks for stopping by.

Anonymous said...

Whoops, I did indeed mean apathy. Maybe you're right about the bustle moving from this blog onto the newspaper forums, but I still come here for the best source of unbiased news.

As a side note, I've been seeing pro-PLCB commercials on TV lately claiming that PA has the lowest drunk driving fatality rate. I don't think that's remotely true, so how are they able to say it?

Lew Bryson said...

I believe they're basing that on one type of accident -- head-on collisions? -- but I can't say for certain. They ARE cherry-picking data; overall, Pennsylvania is at best average.

Anonymous said...

Very well said Pumpkin Head,somethin is going to get done no doubt about it.People have not lost interest in the issue I think everyone is scared to death.

Anonymous said...

Seems like you got fooled like so many others by the press releases from Washington. Tax revenue was up but total revenue was about even. They don't include the profits the WLCB contributed. Google Washington liquor revenue 2012 and see for yourself. In a few years when some of the fees expire they will be in the hole like every other state that privatized. BTW This has been pointed out to the Senate, and they get it.

Lew Bryson said...

The Senate "gets it," eh? Must be why McIlhinney's proposal dumps the Johnstown Flood Tax.

Keep whistling in the dark, and remember what you said months ago: you have to win every time, we just have to win ONCE. Death by a thousand cuts? I'll take it.

Anonymous said...

I don't believe you've seen the proposal. Tell the truth have you? He hasn't even posted the amendments.
And what does that have to do with your BS blog post that says the state made more money post privatization?

Lew Bryson said...

I haven't seen an actual bill, no one outside the Senate has. The bill's still being tweaked till they have enough Republican votes to pass it; you know that, I know that. Meantime, I've seen the same thing everyone else has, the memo points on the changes to SB100:
http://www.senatormcilhinney.com/PDF/2013/061813.pdf

As far as "And what does that have to do with your BS blog post that says the state made more money post privatization?", hey, you tell me, Skippy, you're the one who brought it up here, not me. And it's not BS, Washington DID make more money. As prices come down, and the "fees" go down, they'll lose border bleed and they'll make more money. Your biggest argument -- privatization loses the state revenue -- will now be moot, and not just beside the point.

The point, of course, is that the people of Pennsylvania deserve the same freedom of choice that people in neighboring states have. Of course we do, because "control," the rationalization for this stupid, antiquated system, has been shown to be a humbug.

"Control" does nothing of the sort, and I can thank that disgusting ad with the little girl for bringing people to think about it, and realize that it's all lies. "Control" of retail wine and spirits has no real effect on negative alcohol outcomes; Pennsylvania is average. The annoyance of the State Stores is all for nothing. Keep it coming!

Anonymous said...

Washington liquor stores put $448M in the state coffers in fiscal year 2012. That was only for 11 months as privatization started June first.