Wednesday, April 21, 2010

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?


Rich said...

I wonder if they take into account other taxes going into the system, like business income taxes...which I would assume the state does not pay.

Rich said...

More info on Turzai's site:

Anonymous said...

I read the proposed bill and on turzai web site. wow those poor employees will get screwed. only a 3point advantage on a civil service test for other state jobs and tax credits for employers only three years to employ them! those people got families, and all you care about is getting your booze, what is wrong with you people

Lew Bryson said...

Actually, Anon, I don't really care that much about the booze; I just want to end this public jobs program and patronage hole in the most humane way possible. Turzai's bill is the best deal the clerks are going to get, and they should wise up and take it.

Look at it this way: if the State was paying people, thousands of people, to snap their fingers and wiggle their thumbs to keep wild wolves from roaming the streets of the state's towns, and someone finally wised up and realized that this was completely unnecessary...would you want to keep them employed because they have families? Or would you want them to do something useful?

Come up with a better plan that privatizes the system without breaking the bank; I challenge you.

DFields said...

I'm curious to know how this effects out of state purchases of wine through the mail. Currently, you can purchase wine from out of state wineries through the State Stores. How will this be done now? Do you have to go through a licensed retailer, or can you now order directly from the winery?

Overall, I'm pretty excited about this, and plan to write my local Rep and Senator.

Lew Bryson said...


I don't know! Wine like that is kind of under my radar. I'm very much a connoisseur when it comes to spirit and beer, and I want small production labels, but when it comes to wine...I don't know enough to want that, and it's not something I think about. So I don't ask about that in a law.
That said, I don't seen anything in Turzai's proposal about that. That's all up in the air right now -- despite Granholm -- so I suspect Turzai may have purposely avoided it. That's too bad, because the time to hammer it out is while the State is still the wholesaler. Once wholesale licenses are issued, the wholesalers will not want this to happen. Good point. Let's work on that.

sam k said...

I am still against the concept of selling state-issued licenses as public property. The state should not be in the business of creating wealth, and that is exactly what the "selling licenses" model accomplishes. Look at liquor licenses or casino licenses.

They are sold in limited quantities and become personal property that, because of their exclusivity, instantly increase in value once in private hands, and generally continue to appreciate in value. I don't know what a liquor license costs when it is purchased from the state, but the going rate on the secondary market here in Centre County is about $250,000, many times the initial cost.

Why do we not LEASE licenses so that when the holder decides to get out of the business, ownership reverts to the state for reissue and further revenue gain for the state?


Otherwise, I like Turazi's bill just fine!