Sunday, October 13, 2013

What they made, what they say they made.

Finally, a full 6 weeks later than last year the PLCB released their un-audited numbers to the public.  Now we all have heard that they made $660 million in a record sales year. That is like saying the PA Dept of Revenue "made" $23 Billion. Collecting taxes is not making money. The PLCB collected $520,483,384 in taxes and then overcharged the people of Pennsylvania $128,365,957 for the privilege of going to a state store.  To be fair they did pay for the BLCE to enforce the state monopoly that prevents the citizens from going anywhere else to purchase wine & liquor and to keep track of the all important beer registration list, neither of which they seem to do all that well.  They also paid out $2,567,319 or about half of their advertising budget to drug and alcohol programs. You would think that an agency charged with, "...exercise of the police power of the Commonwealth for the protection of the public welfare, health, peace and morals of the people of the Commonwealth and to prohibit forever the open saloon..." (PA Liquor Code 1-104) would at least spend less on advertising and more on education but that's not how they roll.

So what else does this latest set of numbers tell us?  I noticed that for the first time in at least two decades that they didn't take an advance from the state ($110 million the last few years) to get things going.  We'll have to wait and see if they can keep it up or if this is just a one time thing to make the numbers look good under the threat of privatization.  Liabilities would have gone up 10% if they had taken it verses the normal 2-3% for the past few years.  History isn't on their side.  Bailment was also something that would control costs but inventory, the thing bailment was supposed to reduce, went up 11% from the previous year.  Cash went down 44% from 2012 and Accounts Receivable decreased a whopping 94% which may be a good thing if other entities are paying their bills almost immediately or it may not be that good if the business isn't selling as much goods or services.  The published reports don't provide enough information to figure it out. Store operations only went up $2 million but they closed 8-10 stores (PLCB audit 2012 lists 608 stores, testimony in May says 596) and the Chairman says that they are short at least 250 employees so I guess that is one way to keep it even but how long can they keep this balancing act going is the question.

While record sales are nothing new to the PLCB I wonder why the record profits don't follow the same pattern.  It took 5 years for Operating Income to beat the FY 2008 total, There were record sales in FY 2009 and profits went down 24%, there were record sales in FY 2010 and profits went down another 36%. Three of the last four years ended with negative assets which had never happened before. Total Net Assets still hasn't passed 2006 levels. In terms of percent of Income Before Operating Transfers the BLCE and Drug and Alcohol programs get less now than they did in 2000.

At some point next year we'll see the official audited report and know exactly what happened but until then we have to deal with what little is released.

I, like the majority of Pennsylvanians fail to see the need to keep a exceedingly small minority in place to the detriment of 12.75 million residents. The numbers just don't justify the continuation of the state in the retail and wholesale spirits business.

Privatization is the Ultimate in Modernization.

1 comment:

Lew Bryson said...

Such a huge contribution to the state budget...