Republicans Selling Privatization Down the River

I hate to say this, but privatization may be dead...again. And to my deep disappointment, it's the Republicans in the state Legislature who are killing it. Check out this action in committee this week:

o HB 260 (Rep. John Taylor, R-Philadelphia): Allows the Pennsylvania Liquor Control Board to implement customer relations marketing programs to offer incentives to customers, extends the Sunday closing time from 5 p.m. to 9 p.m., removes the limit on the number of stores allowed to operate on Sundays, increases the range of fines for minor violations of the Liquor Code from between $50-$1,000 to between $100-$2,000, and increases the range of fines for major violations of the Liquor Code from between $1,000-$5,000 to between $2,000-$10,000.
o HB 1356 (Rep. Scott Petri, R-Bucks): Allows the Pennsylvania Liquor Control Board (PLCB) to hire employees outside of the Civil Service Act, allows the PLCB to establish a classification and compensation for these employees that shall not be subject to the Administrative Code, and allows the PLCB to purchase all goods and services deemed necessary at its sole discretion.

Let me translate that for you. HB 260 will let the PLCB offer coupons and 'membership' programs, open all their stores till 9 PM on Sundays, and dump more money into the PLCB's budget through fines (fines that are, I'd remind you, imposed by what amounts to an independent system of courts and police). HB 1356 will allow the PLCB to become a total patronage pesthole, hiring whoever they see fit -- under the guise of hiring wine and spirits "experts," experts along the line of Joe Da CEO, I assume -- and buying whatever they want -- more kiosks? more crap vodka brands? more 7' tall bumblebee costumes? -- without any oversight.

I can make it simpler: the Republicans in the Legislature are lining up to give the PLCB bureaucrats everything they asked for to stave off privatization. Why? Cui bono might be a better question. Who got to these guys? Why are they not listening to the voters and citizens of Pennsylvania, who have been consistently polling at over 2/3 in favor of flat-out privatization?


Do you give a damn about privatization? Write your legislator, ask them why they're preparing to ignore the will of the people on this. If privatization goes away this time, it's going to be 20 years before we get another shot at it.

Why prices matter (and why they don't)

First, read this story in the Inquirer (which they picked up from the Harrisburg Patriot-News). It's about prices at the State Stores vs. prices in private stores in border states. Here's a sample:

But a survey of liquor stores in four states conducted by the Harrisburg Patriot-News reveals that prices aren't always better across the state line. In fact, in some cases, Pennsylvania prices are cheaper.
A 750-milliliter bottle of Bacardi Superior P.R. Rum sells for $14.99 in Pennsylvania and $15.99 at Plaza Wines & Liquors in Manchester, N.J. A Yellow Tail Chardonnay is $7.99 in Pennsylvania and $8.99 at the New Jersey store.
Across the border in Delaware, a 1.75-liter bottle of Johnnie Walker Red is priced at $29.99 at Total Wine & More vs. the $41.99 Pennsylvania shoppers pay.

This is a "survey" conducted by the paper. Look, I know Sue Gleiter, I like her. She's interviewed me for stories, including some on the PLCB, but this is kind of sloppy. There's no information given on how many stores were 'surveyed' or how the 'survey' was done. I'd like to see one done like the supermarkets do it around here; don't check individual prices and show me WOW THIS ONE ITEM IS C*H*E*A*P*E*R* AT OUR STORE!!! Fill a typical cart and add up the total (and don't fill it at the PLCB's "outlet stores" on the border where prices are kept artificially low by adding liter bottles at cut-rate prices...that the rest of us in the state can't get). 

Next, read this letter in today's Inky from wine writer (and Pennsylvania resident) Mark Squires. He rips the story a new hole:

A story on May 24, "Pa. liquor often cheaper than in neighboring states," was an example of sloppy analysis and virtual propaganda. Of course, you can find instances when Pennsylvania prices might be cheaper on a particular item. With the 18 percent Johnstown tax, though, prices won't be cheaper overall or cheaper all the time.
In Pennsylvania, you aren't allowed to shop around because the Liquor Control Board is a monopoly. If you find a store in New Jersey with a bad price, you can go to another store. Or to Maryland, Delaware, wherever. Not every little private store may be exemplary, but there can be little doubt that, taken together, private stores win on service, selection, and price.
Incidentally, I was able to find online in about 90 seconds a 2010 Yellow Tail Chardonnay in a variety of stores ranging from under $5 to $6.33 in New York, New Jersey, and Washington, while the writer of the aforementioned article merely found that Pennsylvania, at $8, was cheaper than one New Jersey store.

Dead on the money, so to speak, and the bolded bits strike home to the real problem with the PLCB: the monopolistic nature of it. They have no real competition when it comes to Pennsylvanians, and we are a captive audience, forced to buy at these stores by the coercion of law.And yet...we put up with that, and seem willing to allow legislators like Senator John Pippy run our lives and make our decisions. For God's sake, Pennsylvanians, stand up on your hind legs and act like adults. Tell your legislator that you don't need to be CONTROLLED any longer.

Wegmans to PLCB: get these lemons out of our store

Ah, it's sweet when another dopey plan by the PLCB is a complete failure. WGAL-TV in Lancaster is reporting that the Wegmans grocery store chain has requested the PLCB to remove the wine kiosks from their stores. Check out the story here; and you can read the actual letter here. It's wonderful to be so right about something; the wine kiosks have been an unadulterated disaster. They were unwieldy, they were insulting, they were the result of graft and crap, they were another desperate and obvious attempt to stave off privatization, but worst of all, they didn't even work. Permit me a little gloating; it is so good to have been so right about this.


Enjoy this video from two Californians baffled and bemused by The Wonderful Wink Kiosk!

What's next? Well, it's not good, unfortunately. Because Senator John Pippy is apparently losing the guts to push for privatization. He's wimping out and talking about settling for some of the alternatives the PLCB is suggesting. I've got a better idea, Senator Pippy; how about you listen to the citizens of Pennsylvania, who continue to support privatization at a ratio of 2:1 or better? How about you consider that instead of the pleas of a bunch of entrenched bureaucrats who don't give a damn about anything but their jobs, their budgets, their secure power? Why keep this fossil, reeking of 70+ years of patronage and patronization? Cui bono, Senator?

Debating PJ Stapleton on Privatization

If you didn't catch me on WHYY's Radio Times show this morning, well, I think it went pretty well. They did a show on the PLCB's desperate attempt to stave off privatization -- and despite what PJ Stapleton said this morning about they're just an agency, not trying to shape the debate or anything, it's very hard not to see this burst of ideas to make the PLCB suddenly more like a private system as anything but a desperate attempt for everyone to keep their jobs...by keeping us under their thumbs.

Stapleton wants more stores open on Sundays, for longer. He wants more wine kiosks in stores. He says he is in favor of home delivery of wine (watch carefully, though: that one promises more than he can deliver). He wants the PLCB freed from civil service requirements so he can hire wonderful people who love wine! It's this program that I think I'm going to call the FDI: the PLCB's False Dawn Initiative. After Stapleton laid it all out, they brought me on to lay it all waste.

You can listen to the show here. I came in about 15 minutes into it, a replacement for Senator Turzai, who's spearheading privatization in the Legislature, but couldn't make it today. Like I said, I thought I did well, but there were so many things I just didn't have time for! Like all this:

•      Lack of choice. Not just what’s on the shelf: there is no other option. I actually did get to this one, but Stapleton either just didn't get it, or was evading it. All he wanted to talk about was the selection on the shelf and the "wonderful" SLO system.
•      Not enough stores. There are more stores in Delaware, more stores in Chicago alone.
•      Lackadaisical service. Your training contract is an admission of this.     
•     No beer. In most other states, you can buy beer, wine, and liquor in the same place.
•      Unfair business practices. The wine kiosks — sad as they are — are only in stores anointed by the PLCB; Jose Garces is the only restaurateur to have a mini-State Store right in his BYOB.
•      Unfair business practices II. The PLCB is in charge of regulating a business that is, in effect, its competition: beer retail. However, the State Stores are not subject to enforcement actions by the BLCE because they are not “licensed establishments.”

And that's just the stuff I had in my notes. My main point? Why should we give you all this stuff to act like a private business...when we could just do away with you and have a private business?

We did do a little happy talk at the end: Stapleton and I agreed that the PA Liquor Code needs overhauled. We just see different needs. He thinks it needs to put more lipstick on his pig. Me? I'm thinking about pork chops and bacon for dinner.

Anyone know where I can debate Wendell?

Wine Drinker? Take a look at these

I know I haven't delivered on the reasons why wine drinkers should be in favor of privatization. I just don't know enough about it. Besides, there's that big safety valve in southeast PA; the biggest concentration of population in the state is right up against two state borders, and the liquor stores right on the other side keep folks from getting too angry about the PLCB. I really wonder if privatization wouldn't already be here if the BLCE did serious border patrols...

Anyway, here are two good recent pieces about how the PLCB affects wine drinkers. The first, by Dave Falchek at the Scranton Times-Tribune, is about how the PLCB warps even the forces for freedom in the wine world: Free The Grapes won't fight for freedom in PA. The second, by freelance wine writer Mark Squires, is just a flat-out screed about why the PLCB is obsolete, why it's bad for wine and wine drinkers, and why it simply has to go.

Read up! And catch me this Monday on the 10 AM show of WHYY's Radio Times (91 FM in Philly, or listen online at www.whyy.org); I'll be providing counterpoint to PLCB chairman PJ Stapleton's alternatives to privatization. Should be fun...

PLCB's "Secret Plan" front-page news? Really?

Lead story in today's Philadelphia Inquirer:LCB offers modernizing ideas to counter privatizing.

The "secret plan" that the Commonwealth Foundation leaked last month came out in the open yesterday -- minus the blatant 'future profits' bond issue scheme -- and for some reason, the Inky decided that this was the most important story of the day. Odd choice, made even odder when the reporter -- Angela Couloumbis -- apparently seemed to think that the PLCB's ideas for transforming the agency through a series of legislative changes were great stuff. There wasn't a negative word in the whole story, and Chairman Jake Corman's beautiful wind-up question was lost:

“I hear you saying that you want to be more like a private business. That begs the question of why not just privatize like 31 other states,” Appropriations Committee Chairman Jake Corman, R-Centre, told agency officials as they wrapped up their appearance.

Couloumbis paraphrased that as 

And while Sen. Jake Corman (R., Centre), who chairs the committee, wondered whether Pennsylvania should fall in line with 31 other states and privatize wine and liquor sales, he acknowledged: "I don't have people knocking down my door for privatization."

Well, honestly, no one's going to knock down any doors for privatization. This issue is most important to licensees; most of whom I've talked to would purely love to have private stores that would deliver to their bars and restaurants, and actually know something about wines, spirits, and business, and they're not going to chance rubbing the PLCB the wrong way; not happening. To us, well, I'd like to see privatization, but I'm not going to Harrisburg to demand it. (Write? You bet. Call? Sure, if it will help! And you should too!)

But more importantly, when a legislator says "That begs the question," it's more substantive than...wondering. "That begs the question" is the legislative, legal equivalent of "Well, duh." Corman's response is just like my response to the PLCB's wowser statements about how convenient the wine kiosks are: Really? Convenient? Compared to picking a bottle off the shelf? Get serious.

Compare this story to this one in the Wilkes-Barre Times-Leader. "Again and again, legislators grilled liquor board members on how the agency operates, on their efforts to make the LCB more consumer friendly and whether a privatized system would result in increased access to alcohol by minors." (Both stories missed this one, which I got at Statehouse News.com: "State Sen. Lloyd Smucker, R-Lancaster, said many of the PLCB’s requests would double as arguments in favor of privatization.“Those decisions are perhaps best left for business. It can be more nimble with decisions to be made in reaction to market conditions,” said Smucker.)

Meanwhile, Couloumbis just repeats everything PJ Stapleton suggested -- longer Sunday hours at more stores, exemption from civil service rules, change the mark-up, and direct shipment of wine (and good though that would be...what the hell's it got to do with the PLCB's so-called business model?) -- while adding slurp-slurp-"I love the union!" quotes like this:

Sen. Jim Ferlo (D., Allegheny) called the agency "a great public asset" and said privatizing would be financially "foolhardy." This year, the agency is kicking $105 million just in profits into the state treasury, he and others noted.

There have been pro-PLCB editorials in Pennsylvania newspapers over the past 6 months, I'll admit that. But has anyone else noticed that every single one of them was written either by a current or retired State Store employee, a union official (I'm looking at you, Wendell W. Young IV), or a Democrat (and therefore presumably pro-organized labor) legislator? I haven't seen a single one written by anyone else.

This story misses the point. Stapleton's suggestions are desperate attempts to pass the blame to the Legislature and hammer down all the nails that are sticking up: too few stores (longer Sunday hours, more open on Sunday); crappy wine selection (you can get it yourself, we don't care!), prices too high (it is not cheaper in New Jersey; we changed the mark-up and lowered the price! (for a year...till you forget all about privatization...)), and unhelpful, untrained clerks (deep-six the civil service rules so we can hire wine-savvy people...for a year...till you forget all about privatization).

People! We've seen this before!  When Newman took over as chairman, people hated the state stores. He made some small changes, gave us some deals on some good wines, and we forgot about privatization... And what happened? Same Shit, Different Governor: Rendell created a $150K job out of nowhere to run the liquor stores (apparently because PJ Stapleton was tired of being asked questions about wine) and gave it to an out-of-work legislator...and the system immediately began sliding back into the craphole Newman had started to winch it out of.

But the truth is, Stapleton's right about one thing. The real problem is The Almighty Liquor Code. It stipulates this moronic system, and if Stapleton wants to keep his plum job (why not? It's found money), and save all the union jobs, changing the code is the way to go. My question: is it simpler to change it Stapleton's way...or to cut the State Store System out entirely. Chop-chop!

Or another thought: How about we leave the State Store System in place, as is...and simply add an equal number of private liquor store licenses, and a number of private wholesalers. The State Stores can't buy booze from the private wholesalers; the private stores can't buy booze from the state. Bars and restaurants can buy from whoever they want. It's cheaper and more certain than doing endless studies; it's empirical. We just let it run in parallel for five years.

Does anyone doubt the outcome?

Privatization as the 800 pound gorilla

The Morning Call's John Micek posted in his Capitol Ideas blog today about the PLCB's annual budget presentation to the Legislature, and noted that "...more than one lawmaker on the panel said they didn’t want to dwell on the potential privatization of the 70-year-old agency. But here’s the thing about 800-pound gorillas: They’re awfully hard to ignore."

Seems that the legislators said they didn't want to dwell on it, and then did just that, including this beautiful sentiment:

“I hear you saying that you want to be more like a private business. That begs the question of why not just privatize like 31 other states,” Appropriations Committee Chairman Jake Corman, R-Centre, told agency officials as they wrapped up their appearance.

Kinda reminds you of the PLCB's argument that their wine kiosks are soooo convenient...until you compare them to just picking a bottle off the shelf at the grocery store and putting in in the cart with your pork chops and eggplant.

Then came the "we'd be great if you'd just give us the freedom to really swing" plea from PJ Stapleton:

The board’s chairman, Patrick J. Stapleton, told lawmakers that the agency is seeking legislative remedies that would give it greater flexibility on pricing and hiring practices.
Right now, the agency is constrained in the discounts it can offer on certain products and civil service rules have hamstrung its ability to “put the right person in the right job,” Stapleton told legislators. [Of course, those civil service rules are mostly in place to prevent rampant patronage; why's the PLCB so hot to circumvent them?]
“We’ve endeavored to create a world-class business operation,” he said. “Unfortunately, we’re limited in certain respects by [state law].”

Call me crazy, but I have a strong feeling that it would be much easier to simply do away with The State Store System than to tweak hell out of The Almighty Liquor Code to allow "a world-class business operation." But if you don't believe me, here's the PLCB's 'secret plan' to fix things so we'll never ever see privatization rear its ugly head again. Please note the bond issue, which would borrow against the next 20 years of PLCB "profits" to blow a chunk of bucks into the state's budget now...effectively guaranteeing that no legislator would bring up privatization for 20 years, because then they'd have to pay off the bond: brilliant!

Why is the State Store System so resilient, why does it still hang on? 

• The unionized staff comes out en masse against privatization, always has (and brags about it), and is joined by their union brothers and sisters. They're just getting warmed up this time around.
• The personally offensive state monopoly (you're not allowed to buy booze anywhere else and bring it into PA) is a lot easier to maintain with a state system.
• It brings in a buncha bucks, because the state's Leaning Tower of Booze Taxes is so much more oppressive than in other states (tip of the hat to PLCB Users Group creator Nathan Lutchansky for pointing that out (not, of course, in the form of a "diatribe," like I do here) and actually doing a better job than I did: turns out I missed some charges), and the PLCB and the union have done a fantastic job in convincing you that they bring in all that money, when it's really the state's tax laws that bring in most of it...and would continue to do so in a private system.
• People (voters) still believe that it's actually effective in making the state safer, despite evidence to the contrary; hell, the PLCB's own bi-annual report admits that PA is not really that different from other states in negative drinking issues. 

This is our best shot in years. Don't blow it. This is not about Wisconsin, this is not union-busting, this is not about Republicans vs. Democrats. This is about a patronizing system of state control, a Stalinist system of government-owned retail that never should have started, and should have died a relatively natural death decades ago. It's a zombie, and it's long past time to shoot it in the head.