Not a Mistake, Not perfect...Good Enough

Last post I asked if we would be calling Senator McIlhinney's privatization proposal "McIlhinney's Mistake." Here's what I thought we'd see in it:

Best guess at that, from things he's been saying: bars and restaurants should be allowed to sell full bottles of wine and spirits to go, the State Stores stay open, the case law stays and the beer in grocery stores situation remains in its ridiculous "cafe needed" state, and the PLCB remains as the state's sole wholesaler...and that's going to be "privatization," McIlhinney's Mistake-style.

Here's how that went when we got a revamped version of his SB100, yesterday:

• Beer distributors and bar/restaurant/deli/hotel license holders can sell wine and spirits to go (for an $8,000 annual fee ($4K for just wine/just spirits, and $2K for "specialty spirits," single category), and a limit of four bottles per sale unless you're a distributor); there are about 14,000 such licensees, and another 1,000 in escrow (some kept there deliberately by anti-drinking types).
• The State Stores stay open
• Distributors can sell sixpacks (as packaged by the manufacturer...killjoys); taverns can sell up to a case
• Grocery stores still need a deli license -- no new licenses created -- and a cafe area, some minor restrictions on what can be sold at each register area are loosened
• The PLCB remains as sole wholesaler; study of situation required after 2 years, if divestiture will not have "significant impact on the fiscal stability of the Commonwealth," the Legislature may consider selling the wholesale operations
• PLCB as wholesaler is required "to buy any specific liquor or alcohol requested by a permit holder"
• PLCB will ship to "permit holders" by the case for a fee; manufacturer/distributor can drop-ship directly to permit holders 
• State Stores get "flexible pricing"
• Licensees get an 18% discount on PLCB prices
• Elimination of the Johnstown Flood Tax!
• Direct wine shipment to citizens
• "Windfall" money goes to senior citizen property tax relief
• All retail liquor stores (State and private) to have consistent hours: 8 AM to 11 PM.
• PLCB and permit holders are prohibited from selling private labels (buh-bye, TableLeaf!)
• Creation of a Wine Industry Promotion Board (nothing about brewers or distillers)
• Did I mention that the State Stores stay open?

 Well...My major issues, in another bullet point list.

• The State Stores stay open, and with NO formula in place to close them. That's left to the discretion of the PLCB. Bad idea, verging on very bad idea. Rip off the band-aid.
• Why stop at sixpacks? Take away all restraints on volumes: distributors and taverns can both sell everything from single bottles to kegs. And why "as packaged by the manufacturer"? Why no mixed six? They'll be pulling the wings off flies, next. If they do keep the stupid "compromise with no one" sixpack minimum, I nominate "as packaged by the manufacturer" as the first thing to go in the amendment process. It's just petty. If the store doesn't want to sell mixed sixes, they can make that a policy. Doesn't have to be a law.
• Limits on wine and spirits sales for taverns/hotels/delis. If you're going to charge everyone $8,000, everyone should get the same deal.
• Kick the licenses out of escrow with a "use it or lose it" clause. Any license unsold in escrow for more than two years reverts to the state.Why should they be wasted just because some Mennonite doesn't want me to have a drink?
• Kill the cafe: this is an advantage for large supermarkets and hurts small grocers. 
• End the police-enforced monopoly.
• Privatize wholesale. Period.

Now...what I think we might get? Not much. I think this bill is either going to pass with relatively minor tweaking, or it's going to die. I'm hoping for more complete "package reform," and I'd really like to see an end to the insulting police-enforced monopoly, but I'm not holding my breath.

Actually, my hat's off to the Senator. I'd love to see all my major issues dealt with, and I do think that leaving the PLCB as wholesaler is going to be a disaster, but...he always said the hard part was coming up with something that could pass. I think he may have finessed that. He won't get any Democrat votes -- and bad cess to them, and especially the mule-mouthed Senator Ferlo -- but I think this could get 26 Republicans. I've got my fingers crossed.

And on that note...write your senators! Urge the Republicans to vote for this, and beg the Democrats to abstain. CC the Governor and make sure the Republican Senators you write to know that he needs this bill; CC your local representative to they know how you're pushing your senator. You know the union's doing it. Get off your ass and make it happen; this is the best chance privatization's had in 75 years. Don't let perfect be the enemy of good.

Here's what I wrote to my Senator:

Dear Senator Tomlinson,

Senator McIlhinney's proposal for eventual liquor privatization is out, and I'm sure you have the details. The proposal doesn't close the State Stores, doesn't slash jobs, keeps the wholesale monopoly, covers the revenue, provides for senior citizen tax relief, gives Pennsylvanians at least some of the beer package reform they've been begging for, and gives beer distributors an affordable way to add wine and spirits to their businesses. Most importantly, it ADDS competition, choice, and convenience to wine and spirits retail for Pennsylvanians, without harming family-owned beer distributors.

It seems like a very good compromise, one that the House can approve, and that the Governor can sign for a much-needed legislative victory for the Republicans. I hope I can count on your vote for this proposal in its final form; it is, as I've told you, very much a ballot box issue for me.

Sincerely,
Lew Bryson

Feel free to use some or all of it. DO IT!

Joe "CEO" Conti weeps for his threatened empire

Philadelphia Daily News political columnist John Baer writes on Representative Turzai's privatization plan here, and it's a good one. His first reaction to Turzai's idea: "I'll drink to that." It gets better from there.

Baer talks to Joe "CEO" Conti at the end of the piece. It's too good, too delicious not to quote Conti's "Why me, Lord, why me?" cri de couer...so I will.

Also, CEO Joe Conti tells me that past studies say that over time the LCB provides the state more money than a private system promises. He adds, "The board and our agency work diligently to increase the revenue we return to taxpayers, and we let the Legislature and the governor deliberate over privatization." 

As if you could stop them! And let's not forget that you're fleecing the taxpayers to get that 'revenue' in the first place. But I like Baer's response to Conti's "and we let the Legislature and the governor deliberate over privatization" line:

"I hope they do - if not this year, then soon."

Yeah. That's about all this Repeal-era relic deserves.

Turzai Rides Again: new plan to dump the State's retail monopoly in the legislature

Representative Mike Turzai of Allegheny County has introduced legislation to eliminate the state's retail monopoly on wine and spirits sales. This is a well-considered proposal, one I can definitely get behind. Check the points (and my comments):

• Privatizes wholesale operations by auctioning off 100 wholesale distribution licenses to the highest responsible bidder (key point: we do not want to leave wholesale in the hands of the PLCB)
• Auction off 750 retail store licenses (more than we have now)
• A biennial license renewal fee and a transfer of license fee, similar to other license application and transfer fees currently in place, will be assessed by the PLCB (make them both substantial)
• Auction off the inventories of the current state stores
• PLCB would be required to divest itself from the retail sale of wine and spirits over a two-year period (smart; it will take that long (and give us the chance to snaffle some bargains))
• No person or business may own more than 10 percent of the wholesale distribution licenses statewide; no person or business can own more than 10 percent of state stores statewide (crucial, and I'd like to see provisions similar to those in the gambling licensing that keep felons out of the business, and state representatives, too; no paddling your fingers in this while you have influence).
  
• The state would move to a gallonage tax, which would range between $2 and $6 per gallon for wine and spirits (generally lower than what we pay now, and... No more Johnstown Flood Tax, no more Johnstown Flood Tax!)
• The PLCB will retain its enforcement, licensing, inspections and alcohol education authority (with, I hope, more oversight than they have now)
• State and local police will have concurrent jurisdiction to enforce state liquor laws (excellent!)
• All store employees must be 21 years of age (okay; not a problem, although 18 year olds can serve wine and spirits at bars now)
• PLCB employees who wish to continue being employed by the Commonwealth will be given preference in applying for other state jobs; there would be tax credits for private businesses who hire them, or tuition assistance for college or technical school (very fair, and a major point)

Honestly, the only quibble I would have is the number of retail licenses (but if you allow beer distributors to expand their license to include selling wine and spirits for a one-time fee -- a large one -- I see a beautiful solution). This covers almost everything I would put in a bill.

Discussion? And what can we do to help?

Action...maybe

Today's Inquirer reports that there is some action being considered in Harrisburg on the beer registration raids.

But in Harrisburg, several lawmakers are wondering whether the registration regulation - as well as other portions of the state's liquor code - are in need of updating. Rep. Robert Donatucci (D., Phila.), who chairs the House Liquor Control Committee, will be holding hearings to determine just that, Lynn Benka-Davies, the committee's executive director, said yesterday.

Well...that's a start. But what we should be doing is using this issue as the fulcrum to plant our lever to topple the whole thing, to bring down The Almighty Liquor Code.

Here's your course of action. First, instruct the BLCE to immediately stop enforcement activity on the registration law. Cut their budget, if necessary. Don't cry: this kind of thing happens all the time, it happened during Prohibition. It's an admission that a law needs fixing. The law serves no good purpose.

Next, quick-fix the beer registration part of the Code -- by deep-sixing it. Don't try to "fix" it, don't do the stupid Alabama thing where they lifted the 'cap' on beer ABV from a ridiculously low 5% to a higher but no less nonsensical 13.9% out of some misguided vision that they were preserving something. Brand registration is a relic, a fossil; the important thing is tax collection. Unless someone can come up with a really good reason to keep brand registration, dump it. Because the way it's being implemented and enforced is broken.

THEN...create a group to examine The Almighty Liquor Code with an eye to completely rewriting it. The group should include sitting legislators, PLCB reps, industry reps (brewers/importers, wholesalers, and retailers), a lawyer specializing in PA booze law, a rep from an anti-alcohol group (because their agenda has to be considered to get buy-in), and, most importantly, consumer representation...because we keep getting forgotten and locked out.

Rewrite the Code! Clean up the beer laws. Dump all the fossil relic crap that no one even remembers the reasons for why it's there. Privatize liquor and wine sales. Fix the licensing system. Level the market. If three-tier is left in place -- which I'm not against -- make it more fair to all involved. Break up the functions of the PLCB. Re-cast the Johnstown Flood Emergency Tax. Create new incentives for self-policing (stuff like rewards for seizing fake IDs, for instance).

Don't be afraid. Citizens: neighboring states don't have these laws, and yet their alcohol problems are not greater or worse than Pennsylvania's. Licensees: if you get involved in the process instead of balking it, you can help make it beneficial by freeing you to do more with your business (full-service "all-alcohol" retail stores, inventory delivered to bars by wholesalers at reasonable prices, the ability to amass wine cellars on par with New York restaurants, less paperwork). Brewers: you can stop looking over your shoulders. PLCB employees: jobs will be created, opportunities will be created, and if the process is at all fair, you will be provided for (early retirement packages, preferential hiring on state jobs, loan packages to open your own private wine stores, etc.).

We have put up with this shit for almost 80 years. It's time to reap the fruits of Repeal.