The Fight for Privatization Starts Today

Well. I've been silent, and I regret it...but I've been really busy (and, I'll admit, doing more on Facebook and Twitter than here, which was probably a mistake and all my blogs have suffered for it). Still and all...

Hot damn! We appear to have hit the election jackpot, if only in terms of the abolishment of The State Store System. It's been a wild time since election day. Here's what's happened.

•                     Governor-elect Corbett (who is inaugurated today) confirmed that he is not only in favor of privatization, he's in favor of rapid privatization;

•                     Senator Dominic Pileggi and Representative Mike Turzai both confirmed that privatization was at the top of the legislative agenda;

•                     Turzai, who has the most comprehensive privatization legislation on the table, was elected House Majority Leader; Pileggi, who supports privatization, is Senate Majority Leader.

•                     Almost every newspaper editorial staff in the state has come out in favor of privatization;

•                     The groundhogs at the PLCB stuck their noses out into the harsh new light and decided that they didn't really need to put through that across-the-board price increase they'd told us they needed;

•                     And...the wine kiosks blew up, and the PLCB finally had to admit there were problems and took them offline right in the middle of the holidays, possibly the biggest impulse-buy season for wine in the whole year.

Whew. It's enough to make a man weep for joy. But you know...it wasn't complete until Wendell W. Young IV (president of United Food and Commercial Workers Local 1776, the PLCB employees union) came out of his cave to shake his booga-booga stick and warn us of all the terrible things that will happen if we privatize.

That's how I knew this was serious. Okay, serious in a funny kind of way, because the only players in this whole spectacle that are goofier than WWY4 are the loonies at the Independent State Store Union, the union that represents the PLCB managers (is it just me, or is the idea of a union for managers just so indicative of what's wrong with this whole clusterf – er, mess?). They babble and hoot, and release their manifestos about the evils of alcohol and long hours at the State Stores (guys...if you don't like alcohol, maybe you should consider a different line of work?), and sound a lot like late-night AM radio preachers.

But WWY4 at least plays it a bit serious, trotting out scary (irrelevant and incorrect) numbers, savage (ad hominem) arguments, and managing to insult the motives of everyone in favor of privatization. You can tell it's going to be ugly – he's decided to call people who support privatization privateers, get it? Like pirates? If that's the way it's going to be, get me my letter of marque, and give me clear seaway, I'm after some prizes.

One of his biggest arguments is that the sale of the system -- which is really the sale of retail and wholesale licenses; the stores and two of the three warehouses are leased -- won't really raise $2 billion as Turzai claims. Over and over, he repeats (and so do his UFCW drones) that those licenses will cost $2.3 million if Turzai's going to get $2 billion, and that's going to shut out mom and pop stores, and big box stores will get a monopoly on liquor and wine sales in PA. 

Okay...first, I don't really care about the money. It's about getting rid of a ridiculous state retail monopoly that doesn't work. It's about service -- Joe "CEO" Conti was recently quoted in the New York Times as pleased that State Store employees “aren’t incentivized to sell”, and by God, he's right -- it's about selection, it's about this is ridiculous in 2011.

Turzai agrees. “The fact is, government is not private business. It simply cannot compete with private industry by pretending it is something that it is not. When it comes to the PLCB selling wine and spirits, we all need to ask: ‘Should Pennsylvania really be in the business of selling alcoholic beverages?’ How can the government agency charged with educating the public and regulating the industry, be in charge of maximizing sales of wine and spirits in the Commonwealth?”

But look. Say those licenses go for $400,000 each; not unreasonable, and a once-in-a-lifetime opportunity to get part of a former monopoly. The 620 stores we have now are not enough; you can see that by looking at other states (that have no better or worse a record with alcohol problems than Pennsylvania). So let's say a nice round thousand stores. That's still half as many -- proportionally -- as they have in New York, and the alcohol problem stats there are about the same as in PA. So, a thousand stores at $400,000 each is $400 million, plus 100 wholesale licenses is another $100 million. $500 million. It's not $2 billion. 

But instead of making them pieces of property -- like we did with tavern licenses, which is stupid -- make them non-transferable. The license is issued, and you have to pay a reasonably substantial fee every year to maintain it -- $10,000? $20,000? -- and if you sell the business...the new owner pays the state for the license. Not you. The state charges for the new license whatever the going rate was in the initial auction, plus inflation.

Don't want big box stores owning all the liquor licenses? Simple: Massachusetts says no one/no business can own more than a small number of liquor store licenses (can't remember if it's one or three off the top of my head); do that here. Why not, the 21st Amendment says we can! That keeps mom and pop in the running.

Here's one that Wendell and his minions trot out all the time, flash it by you fast so you don't think: 

"If the privateers do their homework, they'll see that selling the Wine and Spirits stores can't replace the nearly $500 million a year they generate for Pennsylvania taxpayers. And they'll see that selling the state stores would be a onetime money grab at the expense of an asset that generates reliable, growing revenues."

The Wine and Spirits stores don't generate nearly $500 million a year. They collect about $400 million in taxes; they 'generate' about $100 million in profits. The taxes -- not in exactly that form, but still about the same amount -- will be collected by private stores, and the loss we're currently experiencing in "border bleed" will likely go away, resulting in higher tax collections in-state. I mean, if Canal's opens a store in Fairless Hills, I'm not going to Jersey any more (which, by the way, means I won't be buying gas in Jersey, or lunch, or groceries while I'm at Canal's...)!

The point he brings up that's honest is about the union jobs that will be lost: over 4,000. That's what he's really concerned about, and he should be: that's what he's well-paid to do (about twice as much as Joe "CEO" Conti gets, BTW). I get that, but...those jobs should never have existed. The state should never have been in retail. A bad decision 75 years ago, and we should keep paying for it forever? 

No. Cut the payroll, cut the never-ending pension benefits (how many of you have a guaranteed-benefits pension? Know any retail clerks that do?), cut that all out. Give them help finding work (and Turzai's bill does that), and if they're any good at what they do, they should be able to easily find work in a new private system -- good-paying work, with their years of experience -- or even open a store themselves. But running this big a jobs program for unnecessary work makes no sense in 2011.

Wendell smears the motives of everyone in favor of privatization: we're all in it for money. As a citizen, I take that as a deep personal insult. I want nothing more than to be treated like an adult, to have the simple freedom of being able to buy something in a store 15 miles away and bring it home without fear of arrest, to be able to shop in my home state in a way I can currently only do in another. I want to support local business, not a government fossil.

Today is inauguration day. Privatization starts today.