Thursday, February 12, 2015

Wendell Young Lies And I Can Prove It.... Again.

Wendell W. Young IV, president of Local 1776 of the UFCW (the union that represents the State Store System clerks (whether they want it or not)), sent a letter to the York Daily Record recently stating that doing what the majority of people want -- privatizing liquor and wine sales in Pennsylvania — would cost the state a fortune. Just to make sure everybody knew he was lying he said the same things again on February 11 after the new privatization legislation was announced. As I have done numerous times previously, I will prove that he lies and will say anything to prove his point. His letter is even more proof of that.

About the only true thing Wendell "My Daddy Was President Too" Young says is at the beginning, when he states the PLCB makes a "profit." That so-called profit (really an unspent use tax) is less than 0.4% percent of the state budget; less than Governor Wolf has asked the state agencies to save. That sounds like a good point for the PLCB. But can you really say you're making a profit when you owe over $600 million as your part of  the pension debt, or over $50 million in medical coverage charges? These costs are conveniently left out of the PLCB's accounting; real businesses have to make a profit without such bookkeeping magic.

Oh, yeah, baby, it's gonna be terrible. Trust me.
It goes downhill from there for The Man With the Silver Haircut. Young tries to tell us that losing the state monopoly would cause catastrophe, "Selling off this asset to big chain retailers, grocery and convenience stores would be a financial disaster for the state," he blusters. "Thousands of family-sustaining jobs would be lost and hundreds of millions in state revenue would vanish." Scary stuff, but how true is it? 

Not very. First, the Legislature decides how many licenses there will be, and how many licenses any particular business can own. For instance, Maryland doesn't have liquor in grocery stores (to be fair, there are four exceptions; four, in the entire state, which is about how many gas stations sell beer in PA, where that's, you know, supposedly against the law). There's a lot of "big chain" fear taken care of, and it's an easy fix, all you have to do is put license limitations on ownership...say between three and ten licenses per person or business entity, so there will still be some real superstores in PA, but also plenty of licenses for smaller enterprises.

Next, every place that has privatized has increased employment. In Washington State, the most recent to go to full privatization, category employment tripled under full privatization. The Washington State Office Of Financial Management report on Liquor Privatization (see that? Wendell gives you bluster and fear, we give you reported facts) from this past January says employment in the industry has increased 91%. That's just direct retail jobs; it doesn't count secondary jobs like transportation and warehousing, for example, which are not to be overlooked: warehousing jobs for just two distributors totaled more than the entire previous WALCB workforce  It isn't "spin," or "mythical," as Young claims; it is reported fact and it can happen here without obstructionists like Young and his troops. What the State Store System has done is cost us thousands of new jobs.

What else does he have wrong? Windy Wendy likes to keep quoting the report Governor Corbett commissioned back in 2011, even though it represents assumptions that are no longer valid; it doesn't match HB790 (the privatization bill that actually passed the House in 2013), any other proposal the Legislature has considered since then, or the real world examples of Washington or the province of Alberta (which privatized back in the early 1990s).

Still, if he's talking about it, we have to address it, and it's pretty easy. The UFCW's President For Life claims that the "transition costs" of privatization as laid out in the PFM report would be $1.4 billion over 5 years. That sounds expensive! What he leaves out is the part that says Operational and Transition Costs (page 180). The Operational part — keeping the state stores running while they're being phased out — is almost $1.2 Billion  While I have my doubts that Young actually knows what transition costs are, that same report shows that keeping the PLCB will cost OVER $2.2 Billion. Why? Because Operational costs will be higher since they won't be phased out. Is he dumb? Or deceitful?

If you're not scared yet, try this Wendell Wowser: "hundreds of millions in state revenue would vanish." Really? How's that? Just because the PLCB isn't collecting the Johnstown Flood Emergency Tax doesn't mean it won't be collected. In fact, it could be done at the wholesale level to make it easier, as Alberta did (and like Pennsylvania does with beer). Washington has increased their tax collection more over the last two years than we have, even though they have half the population, and only privatized liquor, not beer or wine (sales were already private). Not only that, they lowered their beer tax by almost 300% and still increased tax collections. (These numbers which can be found on the Washington State Department of Revenue website for taxes and the Washington State Liquor Control Board for fees: Google it.) The revenue ain't gonna vanish.

It's a record-breaking year!
Then he gets to the main course of his Dinner of Deceit. He boasts about how the PLCB "set new records for sales and profits" in each of the past four years. Check the Pinocchiometer: whoa, the nose grows! Sales records? Sure! It would be news if the police-enforced monopoly didn't increase sales. It has nothing to do with the job the PLCB is doing. Gross revenue increased every year back when the state had counter stores too. When you have a captive population that grows and the price of the product goes up, of course revenue from sales goes up every year. But profits? No, sorry. Operational income went down in FY 2014 compared to FY 2013. In fact, it has gone down in eight of the past fifteen years on a year to year basis (according to the PLCB's own financial reports; not all of them are still available on the PLCB website, but I have them if you need copies)...even though every year had "record sales."

Then the Big Man In Harrisburg starts beating his favorite (broken) drum: the majority of the people don't even want private liquor sales! He says that either "modernization" or leaving the System as it is is what the people really want. Modernization is a false choice. The question is not whether the people should shop at pretty state stores, but if the state should be selling a retail product at all. Given the choice of keeping the state store system or having a private system the citizens have always chosen the private system in every single scientific poll, every single time. There has never been a poll that shows the people want the state store system — ever.

In honor of Presidents Day, let me paraphrase Abraham Lincoln to remind you of this Wendell

You can fool all the people some of the time,
and some of the people all the time,
but you cannot fool all the people all the time.
And you can't fool us at all.

Let's tell some truths instead of Wendell's bold-faced lies.

We are not safer because of the State Stores. Look at the DUI stats and the alcohol related incidents compared to our border states. Alberta has over double the amount of liquor stores of Pennsylvania (1,361 vs 605), with about one-third of the population — a lot higher "outlet density," to use the bugaboo term of anti-alcohol types — yet they have a DUI fatality rate that is 40% lower than ours. Washington's DUI fatality rate has gone down faster since privatization (and it started lower that PA's to begin with).

We are not better served. One only has to go to State Line Liquors, Joe Canal's, Roger Wilco, Total Wine, Shop Rite Liquors, and a host of others to see that (and you'll also see the hundreds of satisfied Pennsylvania shoppers who have taken privatization into their own hands).

We are not satisfied
with a system that mainly benefits the people who work there, with a system that owes over $600 million in pension costs, with a system that thinks bureaucrats in Harrisburg should decide what wine and spirits we should be allowed to buy, with a system that punishes people for having the desire to buy things not provided by the state, or with a system that is corrupt, ill-managed, non-responsive and generally incompetent.

We deserve better. After 80 years, it is far too late for the PLCB to try and show they can deliver that. 80 years shows that they can't.

Privatization is the ultimate modernization.


Geno Washington said...

If the union supermarket chains in his region of PA weren't shrinking, Wendell would have no need to blow smoke. Acme, Super Fresh, and Pathmark are all dying slow, painful deaths. I don't necessarily believe in unions, but just imagine this... if these union supermarket chains were still in good shape, not threatened by Giant or new, upcoming players such as Whole Foods, the union chains could start selling alcohol, and the PLCB employees all could stay in UFCW 1776 while switching to a private employer. Right?

Albert Brooks said...

Logical thought processes are not their strong point.

Geno Washington said...

It just occurred to me that a win-win plan for everyone would be for these failing supermarket chains to simply go out of business as grocers, but come back to life (in the same buildings) as liquor stores, with the same union employees they had as grocers.

In the same fashion, Two Guys (a pioneering but now long gone big-box retailer in PA and NJ) went out of business in 1980, but the Vornado Realty Trust which exists today is really the same company that once was Two Guys. And the former Two Guys retail properties still have Vornado as a landlord.

Really bizarre is that Hechinger, a DC-area hardware/lumber chain (much like Home Depot/Lowe's but with smaller stores) that now is out of business, entered Delaware by opening at former Two Guys store sites, and rehired all the former Two Guys employees, even though they had NO experience whatsoever selling hardware or lumber...

Albert Brooks said...

Since the UFCW members at the grocery stores and state stores both just stock shelves and run registers and neither one knows anything about wine or liquor you might be on to something Geno.

Anonymous said...

I just can not understand what they are waiting for to get rid of this system, its just one failure after another and that proves that the state should not be in the buiesness to sell booze, are they that stupid.

Geno Washington said...

Hey Lew and Al (or anyone else reading this) would you consider this idea? I know out of principle you both really try to boycott the state stores, but shop at them for research, and shop at them in "emergencies" when not able to shop elsewhere. Would you be willing to shop at particular state stores based on my recommendations? I know they are in a way identical, but each store seems to have different nuances, and each one seems to just slightly vary its selection depending on the neighborhood. When in need would you please ask me what store has what, posting in the comments section of whatever the latest blog post is? I check the blog every day, sometimes more than once.

Lew Bryson said...

Got a full time job, I'm not a shopper's assistant!

Geno Washington said...

Wait a minute... you two DO at least SOMETIMES shop at state stores, no? I just am offering to make recommendations of which ones to go to, for when YOU genuinely need something. My knowledge of the state stores is encyclopedic, and I should be able to recommend one for almost anywhere in the state you might just happen to be one day. I'm not an expert on any particular type of alcohol itself though, and have never tried to make special requests at a PLCB store (such as having them either dig for something in the back, or have something shipped just for me).

Having shopped at 20+ PLCB stores in the last two years, and having found them each to be somehow unique (not just architecturally), I feel a duty to share my honest findings with fellow PA citizens.

Albert Brooks said...

I look at what they have on-line. I don't actually have to go to one. Besides, I like the comments to pertain to the story not some random reporting on some state store.

Lew Bryson said...

If you want to do that, I'd advise you to use Yelp (which LOTS of people read), or start your own blog -- Blogger is free and easy -- because that's not really what we're about here.
And as Albert says, these comments really have nothing to do with the post, something we try to stick to. If it's got nothing to do with it...I'm not going to be approving them. Let's stick to topic.

Anonymous said...

Maybe you should try writing posts people want to discuss? Vile snark doesn't win friends. Every time I see you comment in the papers under your Albert Brooks persona I cringe. Doesn't help one bit among the grown ups.

Albert Brooks said...

No coffee yet this morning? If you think that Lew and I are the same persona then you really aren't that bright and maybe should be posting from fear of embarrassing yourself more.

Is that unveiled vile snark enough for you? Your phraseology gives you away.