We're better off privatized

After four years, I think it is safe to say that the liquor market in Washington state has settled down. Like everything else that is sold, big stores offer more and small stores offer less. People will pay more for convenience and pay less when buying quantity. Not every store is the same, which is a big change from the old state stores; just as it will be here.

How's Washington doing? Since the unions always make this about money, let's look at that. According to The Herald Business Journal total sales volume has increased 21%, and that doesn't count the couple of percent increase in border bleed. Border bleed isn't a product of privatization, Washington has always had it. It's no surprise, they've had higher taxes, and therefore higher prices then the adjoining states of Idaho and Oregon for decades. However, it isn't like the border bleed that Pennsylvania has; the population is smaller and there are no major population centers near the borders. An entire year of Washington border bleed is about a month's worth of what Pennsylvania loses.

How do we know this?  The states bordering Washington tell us that their sales have increased 7% after Washington privatized (and the booze taxes were jacked). For Idaho, that would be about $11.7 million and for Oregon about $34.8 million, or a total of $46.5 million per year being lost out of state after privatization.

In contrast, PA has at the very least $230 million in border bleed in just eight counties, and that was five years ago according to the PLCB itself.  Extrapolating for the entire state using the Pennsylvania Food Merchants Association or the Wine and Spirits Wholesalers of America studies puts it closer to $500 million, or almost eleven times Washington's border bleed.

Sounds pretty bad, right? Let's hope that our politicians get it right and don't raise taxes when the state stores are privatized. Will convenience go up? No doubt. Will selection increase? Overall, yes, though not everywhere; the State Stores won't be charging Philly to have a full wine selection in Potter County. Will border bleed decrease? Certainly: if you make a product easier to buy locally, people will buy more locally. Look at Washington: even though there were 27% in added 'fees,' sales still increased 21%. If PA doesn't raise taxes that number will increase, and even a few percent more as border bleed decreases.

What do we need to replace financially? $110 million, give or take, which includes State Police funding, Drug and Alcohol education funding, and the average amount turned into the general fund for the past 5 years. Last year the PLCB collected $334.4 million in Johnstown flood tax and $130.2 million in sales tax. A total of  $464.6 million. If sales go up 25% then taxes collected go up 25% too and 25% of $464.6 million is $116.15 million. Done! The PLCB "profit" is replaced!  But there is more.

Every place that has fully privatized has tripled employment in the industry. New owners will be paying business taxes the PLCB doesn't pay, they will be paying license fees the PLCB doesn't pay, and they won't be looking to the taxpayer to address any future shortfall in pension and medical. You won't have as much bureaucracy to pay for, there won't be some unqualified person deciding what the entire state is allowed to buy, there won't be the graft and corruption of state employees, there won't be people who thought kiosks were a good idea, there won't be state stores trying to hide behind 4 different names and there won't be the PLCB as we know it now. Certainly a good thing.

What there will be is NORMAL. Or at least far closer to normal than what we have currently and normal is good. Just ask the majority of the population how much better free enterprise is over state monopoly.