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Pa. should privatize wine and spirits sales, join 48 other states

Once again, the perennial debate over privatizing Pennsylvania's state store system is heating up. The issue has come up during previous Republican administrations, but it never made it out of the Legislature. This time, the politics are right, with a Republican governor who supports privatization and Republican control of the Legislature, and the financial impact of license sales on the state budget might be a factor.

The current plan, offered by state Rep. Mike Turzai, R-Allegheny, would auction off 1,250 licenses, reserving 500 licenses for smaller retailers and allocating 750 licenses for larger companies.

The 1,250 new retail licenses would replace the 621 state stores now operating.

The arguments for and against privatization are familiar and the union representing state store workers is again the most vocal opponent.

Privatizing, specifically selling licenses, has an added appeal this time because the revenue expected to be raised could top $1 billion, but estimates range from $500 million to $2 billion. Whatever the amount, it's a one-time cash infusion and not enough, by itself, to justify privatization.

Of all the arguments, pro or con, the most significant is that Pennsylvania is almost alone when it comes to state control of the sale of wine and liquor. Only Utah has similarly tight state control.

If 48 states can sell wine and spirits through private stores, why not Pennsylvania? And if Pennsylvania's system is superior for any reason, why are other states not emulating it?

The union opposition is mostly about the jobs — and benefits — at stake. Critics of privatization worry that 5,000 state store workers will be out of work. But if the state store employees are good workers and are knowledgeable about wine and spirits, they should be the first to be hired in a new, private system. If, however, they are not productive workers and don't know enough about wine to help customers make buying decisions, then they might find themselves out of work for awhile.

To address this issue, Turzai's legislation would help displaced state store employees through preference for other state jobs, as well as retraining to enter different fields.

The details in Turzai's legislation can and should be debated. Is the number and distribution of licenses appropriate? What will be the impact on annual state revenues after the 30 percent tax and the 18 percent Johnstown Flood Tax are replaced with a gallonage tax?

There should be further debate about how best to implement a privatized system. But Pennsylvania will not be breaking new ground here — 48 other states have decades of experience with private wine and spirits sales. State lawmakers should adopt the best systems found in other states.

Another argument against privatization is that state control reduces alcohol abuse. And if this state had less alcoholism and fewer DUI arrests or drunken-driver accidents, the argument might carry weight. But the reality is that Pennsylvania is in the middle of the pack among the states when it comes to alcohol abuse, DUI arrests and alcohol-related accidents.

People who travel to other states have seen that private wine and liquor sales, in specialty stores and sometimes in grocery stores, work. It's convenient, offers more variety and price competition — and does not lead to societal ruin.

Selling alcohol is simply not a core government function. Pennsylvania's system is a holdover from the Prohibition era and should have been ended decades ago, when most other states made their privatization moves. There are no convincing arguments, from the financial or public health perspectives, for keeping the status quo.

It's time to end the state monopoly on the purchase, distribution and sale of wine and spirits. Pennsylvanians should have a system of alcohol sales similar to that enjoyed by citizens in 48 other states.

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