Tuesday, October 25, 2011

States Have Priorities Other Than Selling Booze; The Argument for Privatization

COMMENTARY | Here in America, where a free market and Capitalism has resulted in an unprecedented level of prosperity for even the poorest among us compared to the rest of the world, a debate rages in multiple states over whether liquor stores should be ran by private businesses or the government. In a press release issued today by Teamster's General President James P Hoffa, a specious charge is laid of how Washington State getting out of the liquor business will do more harm than good. Ultimately, the issue of liquor store privatization isn't really about liquor, but about smarter uses of government resources.

Alcohol should be regulated, sure. That's reasonable. It's dangerous stuff.

And, as pointed out by the YES on 1183 Coalition, concerned parents can rest assured knowing that Washington's Proposition 1183 doubles the fines for selling alcohol to minors. No business is interested in losing that kind of money. There are other advantages to liquor store privatization. Among these benefits is the one-time influx of cash into financially-burdened state and local governments. Others include a percentage of the liquor sales ensuring continued revenue for the state. And, for those teetotalers who are offended by the very sight of alcohol, Proposition 1183 has built-in restrictions requiring hard liquor to only be sold in retail businesses which meet certain size requirements, thereby preventing liquor from being sold by just any retailer.

Pennsylvania is also considering the option of liquor store privatization.

All the way East across the continent, the Commonwealth of Pennsylvania is also in a heated debate on the topic. This isn't the first time it has come up, either. Former Governors Dick Thornburgh (1979 to 1987) and Tom Ridge (1995 to 2001) also dealt with the same battle during their terms. Last March Governor Tom Corbett was quoted as saying "Government should no more run the liquor stores than it should run pharmacies and gas stations. This isn't about the money. It's about the principle." For those who will claim privatization will lead to underage drinking, even while liquor stores are ran by the state, Pennsylvania ranks in the middle of the pack as it is. So it would seem to be a moot point, within the big picture. If state control were truly a determining factor in preventing underage drinking, the Commonwealth should be somewhere in the top three positions.

How has liquor store privatization worked for other states?

That's a fair question. To answer it, let's look at the results in the State of West Virginia. In a state which finally recognizes the value of abandoning outdated, 148-year-old Puritan ideals, tax revenues have increased along with the immediate increase in immediate revenues from investors. The state even enjoys the revenue from cross-border sales to Virginians tired of the hum-drum ABC stores of Virginia. With the increase in sales enjoyed by businesses, those businesses earn more profit, which means more capacity to hire and certainly more tax revenues for the state. Come visit me on DonPennington.info.