PA Democrats need to go to Iowa

When you're talking about getting a bottle of booze, and the words "freedom," "consumer choice," "selection," and "benefiting the citizens" are mentioned, Pennsylvania certainly isn't the first state that comes to mind.  But then, neither is Iowa, even though they are decades ahead of what our blinder-wearing Pennsylvania legislators have come up with for liquor policy.

Just like Pennsylvania at the end of Prohibition, Iowa instituted a state-controlled system for wine and liquor. Unlike the Commonwealth, they listened to their citizens and changed with the times. Maybe you're thinking that Iowa had a different societal outlook, that they were more likely to liberalize their liquor laws. Not even close: Iowa didn't even allow drinks by the glass until 1963. If you wanted a rum & coke, you drank at home or not at all. So for at least the first 29 years after Prohibition ended, we were doing better than Iowa.

Iowa also raised their liquor tax on licensees in the 60's from 10 to 15%, but they didn't hide it by calling it "temporary" for something that happened 30 years earlier as Pennsylvania did with the infamous Johnstown Flood Emergency Liquor Boondoggle Tax. They also didn't then bump it to 18%, either.

Since Iowa didn't have as many convoluted regulations and "interpretations," they were able to totally rewrite the liquor code in 1972, simplifying it from twelve chapters down to just one, all in one place in the code. When Pennsylvania "revised" The Almighty Liquor Code in 1951 they expanded it, and spread the regulations across multiple sections of the state code. Brilliant.

Kwik Star, Charles, Iowa

On May 4th,1972 the Iowa legislature decided that gas stations could sell beer...without having separate registers and cafes! Only 44 years ahead of PA, and they had hundreds of places instead of just nine. In 2011 they allowed gas station liquor sales, too. Don't hold your breath on that.

In 1981 Iowa, again decades ahead of Pennsylvania, allowed craft brewers to not only sell their own beer by the glass but ANY beer obtained from a licensed wholesaler for on and off premise consumption.  35 years later, we're just starting to catch up.

In 1985 the Iowa legislature started to unwind state control of wholesale/retail wine sales, acknowledging that they didn't have the knowledge or expertise needed to operate consumer-friendly outlets. The dual sale of wine in state and private stores took less than two years to show the clear winner, and the state closed state store wine sales in 1987. 20 years later, the Pennsylvania Legislature hatches McIlhinney's Mistake, and we're allowed to buy four bottles of wine at a time in a relative handful of grocery stores. Yippee, yay us.

Not in PA! You can only have 4, put one back.!

Shortly after wine was fully privatized in Iowa, retail liquor followed suit. The state transitioned from 221 state stores to 256 private stores in only four months. By the end of the four month period, Iowa had approved a total of 410 private stores. Even after lowering and eliminating some taxes — contrary to what State Store clerk union president Wendell W. Young IV says — the state of Iowa makes more money by not having state stores as reported by the state of Iowa itself.

Well before the U.S. Supreme Court Granholm v. Heald decision in 2005, Iowa legalized reciprocal wine shipping in 1996. It would be 20 years later, after almost eleven years of ignoring the Supreme Court's ruling, when Pennsylvania  finally came into compliance and allowed such shipments.

So here we are in the fall of 2016. Iowa and Pennsylvania started out roughly equivalent at Repeal, but the Hawkeye State has far outstripped the Keystone State in the race to booze normalcy. Iowa has far greater convenience, one stop shops, and no bureaucrats deciding which legal products are allowed to be sold in the state (the state still has a monopoly on spirits wholesale, but it isn't run in the draconian way the PLCB does it). Iowa is decades ahead in doing what their citizens want; in August, the governor announced another comprehensive review of the liquor code. Meanwhile, The Almighty Liquor Code has only gotten more convoluted and confusing (to legislators and licensees alike) since 1951. 

With over 1,400 retail liquor outlets serving a population a quarter the size of Pennsylvania's, do you know what else Iowa has? Less underage binge drinking, lower DUI fatalities (in both legal and underage drinkers), and lower DUI arrests.

What is the lesson of looking at Iowa? Simple. We don't need the PLCB: they're not convenient, they're not helping alcohol safety, and as we've been telling you for years, when you look at the entire financial picture, they aren't even making the state any money over and above the taxes that a private system could collect.

PRIVATIZE. It just makes sense.

How to lie like Wendell Young IV

We like to take UFCW Local 1776 president-for-life Wendell W. "The Haircut" Young IV to task for bending, breaking, and shattering the truth about booze sales in Pennsylvania. He's out in the public again as the budget impasse comes down to the close and Senator McIlhinney's Great Step Sideways "modernization" plan for the State Stores is in play. Windy Wendy is spreading the same old manure about changes to the State Store System: any change is bad, we need these jobs, private companies are evil. 

As a public service, we will now present actual statements by Mr. Young, showing the different types of lying and some of the nuances of the same. 

Never gonna happen is it?

The Flat-out Lie 
One of Wendell's favorite type of lie, the flat-out lie is best used in press releases or other forms of communication where the liar can't be questioned with any immediacy. This type of lie is best used to impress or intimidate by showing the supposed knowledge of the liar.

For example, you can find this lie on the union's website "...the PFM found that privatization will cost more than $1.4 billion in transition costs over five years,”

As one of Mr. Young's favorite lies. He has said this numerous times in numerous places, but saying it over and over doesn't make it true. The PFM report  on page 186 lists the Operating and Transition costs as $1.4 billion. Mr. young always seems to forget the Operating part, the costs that are incurred by simply running the stores while they're open. The normal costs of operation, not costs incurred by any kind of transition.

And on page 180 of the report it shows how much just those operational costs are. Remember: these are costs that would be incurred just to keep the state stores running anyway.

From this you can see that keeping the state stores would cost well over $2B over the same time period since there would be no reduction in Operational expenditures over time. (Take the first entry and multiply it by 5.) That's actually likely to be on the low side: current expenses are $470 Million per year and going up.

The Lie of Time Passed

Another favorite lie for Mr. Young is to "forget" that one, two, five, or ten years have passed since he came up with whatever statistic he is talking about, but he still presents that old and often outdated information as current.

In this example, eight years after this CDC report was current (the CDC doesn't even have it up on their website anymore), the UFCW Local 1776 webpage still says that in 2007, PA had the lowest death rate in the country associated with alcohol consumption. They are actually correct about this....for 2007.  By 2009 Pennsylvania's rate had increased over 25% (Page 87 in the report) and by 2012 had gone up even more (Table 19, Page 78), resulting in a rate 30.8% higher than the 2007 figures Mr. Young likes to use. If you imply that the union-run, state liquor stores are responsible for the low rate, then aren't they also equally responsible for the higher rate? 

Just to make things worse for Wendell, of the states with lower rates than PA for the past seven years, two of them are New Jersey and Maryland. (Damn those free privately-run states right on our border...that so many Pennsylvanians use.)

The Lie by Omission
Another favorite used to make statements sound better without telling the whole truth.  We'll start out small with this. "Pa. has Wine and Spirits stores in every one of the state's 67 counties; West Virginia had state run stores in every county; with private companies in charge, five counties now have no stores."

The implication is that some people in West Virginia have to go unreasonable distances to find a liquor store. The truth is that NOBODY in West Virginia has to drive as far as some residents of PA. Why? West Virginia is a much smaller state with much smaller counties. It only makes sense...unless you are a union boss.

Wendell likes to talk about West Virginia and Iowa a lot. Mostly he will tell you about how they lost so much money on privatization, using statistics from the Iowa Alcohol Beverage Division and West Virginia Alcohol Beverage Control Administration.

Only total revenue did not decrease in Iowa. Reading the same PFM report linked above, it was reported for Iowa that: "Privatization was deemed successful from a revenue standpoint, with profits increasing by $125 million over the first 11 years of privatization compared to estimates under State control of the stores. At the time of the 10-year review, the conclusion was that most of the increase in profits was the result of eliminating the state stores and the costs associated with them. " (Page 111)

Oh, and Iowa now has over 1000 outlets with a quarter of our population, and still has less DUI and binge drinking across the board.

How much did West Virginia save when they didn't have state stores to maintain, with salaries and pensions? What about the auction fees for licenses (over $60 million)?. Then there are the business taxes that are now paid which weren't before. I don't see any of that in Mr. Young's calculations.

You know what else he doesn't say?  For eight years, West Virginia state stores and private stores were in direct competition in wine...and the state was losing. If state run stores are better, how could that be? 

You want more? How about the 5,000 family sustaining jobs you hear him talk about being lost to privatization all of the time? Here is another example, and another from 2 years ago.  What he doesn't tell you is that the PLCB says that over 45% of their workforce is classified either part-time or seasonal (page 43). Hardly "family sustaining," and it's not 5,000, either.

So if you hear Mr Young say anything about privatization, it is time to fire up your google-fu and check to see how badly he is lying about it this time.

Privatization is Modernization.

Private Retail, Private Wholesale.

All We Want Is Normal.