What do Utah and Pennsylvania have in common besides nuclear waste and overrated college football teams? State
control of liquor sales.
Utah is a theocracy where moral righteousness regarding liquor consumption ends during tax collection. Utah’s booze sales of $267 million last year were funneled through 44 state stores, 100 contract stores, and 600 employees. According to the Department of Alcoholic Beverage Control, $100 million was returned “to the citizens of the State through contributions to the general fund, school lunch program and sales tax.”
Pennsylvania is in a sad state where the Whiskey Rebellion, boilermakers and two-free drinks at casinos are living testament that the pulpit and the still can coexist.
Pennsylvania established the Liquor Control Board in 1933 during a Special Session of the legislature called by Gifford Pinchot. Mr. Pinchot, a prohibitionist, did not view the state as a vehicle to grow the liquor industry. His mission was to “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.”
Times have changed.
The Pennsylvania Liquor Control Board operates 625 outlets, employs 4,000, and rang-up $1,894,490,728 in sales of wine and spirits last year.
Mission out of control.
The moral mission of the LCB (which is more in tune with the teachings of Joseph Smith, Jr.) was amended in 1987 under Act 14. Liquor law enforcement was transferred from the State Police to the LCB’s Office of Administrative Law Judge.
It’s never a good idea for a government agency to simultaneously promote and regulate a consumer product.
It’s hard to imagine better advertisements for relinquishing Prohibition-era control over liquor sales than the LCB follies during the Rendell Administration.
In 2007, Gov. Rendell appointed former state senator and pay jacker Joe Conti to a new $150,000 position as CEO of the Liquor Control Board. Conti’s anointment came without a nationwide search, and his salary more than doubled the $65,572 paid to the Chairman of the LCB, Jonathan Newman.
Newman, the son of former-Supreme Court Justice Sandra Newman, resigned on January 3, 2007 saying his authority had been undermined by the hiring of Conti. Newman; in turn, was blasted for indulging in $47,188 in travel expenses between 2004-2006. Expenses for the other board members who are still serving – Thomas Goldsmith and P.J. Stapleton – totaled $35,887 and $20,048 during the same period.
Battered by PR missteps, in March 2009 the LCB announced it would spend $170,000 on charm school for its employees. Mr. Conti said, “This is part of the renaissance of the Liquor Control Board. The point is to become a specialty retailer and not be known as a government monopoly.” Point well taken but better accomplished by selling the monopoly.
Not content to embarrass itself with a charm offense, last May the LCB decided to roll out a $142,000 advertising campaign inviting family members to get Mom drunk on Mother’s Day. “Treat her to the perfect Mother’s Day cocktail this year. Try a Mother’s Kiss mixed drink, made with equal parts strawberry kiwi vodka and lemonade.”
Isn’t that special?! I don’t think getting mom snookered is what Governor Pinchot had in mind back in 1933.
Majority Leader-in-waiting, Rep Mike Turzai (R-Allegheny) has a doable divestiture plan that will allow the state to get out of the booze business and provide job protections for current LCB employees. Turzai’s plan isn’t perfect, but even Mr. Conti termed the initiative “thoughtful.”
Under the legislation, the LCB would retain enforcement, licensing and inspection functions. The bill provides preferences in applying for other civil-service jobs, tuition assistance for further education and tax credits for employers hiring them.
The projected $500 million from increased sales and revenues generated from license renewals, transfer fees and taxes on 850 new businesses would supplant and exceed the loss of tax revenues under a state monopoly.
It’s past time to move the state into the modern era. Pennsylvania’s state monopoly of liquor sales is a fossil that needs to be placed in a historic dust bin alongside lead paint, radium dials and outdoor plumbing.
Photo by Jenn Larsen
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