Testimony to the Senate Law and Justice Committee yesterday illustrated why wholesale privatization must be a part of "modernizing" liquor sales in Pennsylvania.
The PLCB’s wholesale monopoly can’t serve current, much less expanded, retail outlets, restaurants and taverns. The PLCB does not deliver to restaurants, bars and taverns. In fact, the PLCB contracts with private companies for warehousing and even delivery to their own state stores.
Rep. Kurt Masser (a tavern owner) explains the PLCB’s ordering process: "I get my meat delivered to my restaurant. I get my produce delivered to my restaurant. I get my beer delivered to my restaurant. I have to pick up my liquor order. I can’t get it delivered. And if the liquor order is wrong, I have to take it back to the store and redo it." A competitive wholesale system will better serve Pennsylvania’s small businesses
Mark Gorman, Senior Vice President of the Distilled Spirits Council of the United States (DISCUS), whose members account for about 80 percent of spirit sales nationwide, testified yesterday on liquor privatization. Mr. Gorman noted:
- Privatization of retail sales should be tied to wholesale privatization of alcohol sales: "…if you decide to privatize one tier of business—you would be best served by privatizing the whole thing."
- Pennsylvania’s current state-run system does not adequately serve the state's more than 12 million residents.
- If the PLCB were to expand delivery to more than 15,000 restaurants, bars and hotels, DISCUS estimates the cost to taxpayers as high as $770 million a year. In contrast, private wholesalers operating in most other states deliver products to restaurants.
- The Commonwealth could take in more than $500 million from selling off private wholesale licenses.
For Mark Gorman’s complete testimony, click here.
Testimony from Dawson R. Hobbs of the Wine and Spirits Wholesalers of America expanded on those arguments by explaining why a private wholesale system will increase selection and choices for consumers:
The existence of multiple wholesalers in a state also benefits retailers and consumers because it introduces competition to the market place. Each wholesaler will carry multiple brands in a given product category, for instance vodka or bourbon. Thus wholesalers are competing to make their particular band the product of choice in that market. This competitive dynamic ensures that retailers are receiving the most competitive prices and marketing support from wholesalers. Over time that means that consumers benefit by having the opportunity to purchase the best products at the best prices.
The successful experience from Washington shows that wholesale privatization can occur in a six month period. Pennsylvania lawmakers should follow that example rather than spending millions of dollars to retrofit a bad system that is destined to fail and lose hundreds of millions in new revenue. Let’s get this right the first time by privatizing the wholesale system to ensure retail stores and restaurants get the quality service they so desperately need.
RELATED : PRIVATIZATION, LIQUOR STORE PRIVATIZATION
Elected officials are standing strong in their opposition to the Medicaid expansion under the Affordable Care Act, despite a number of "independent studies" touting the benefits of "free money" from the federal government and constant lobbying by the health care industry.
Last week, State House Republicans introduced their 2013-2014 budget proposal, devoid of Medicaid expansion. House Appropriations Chairman Rep. Bill Adolph stated, "When and if the governor decides to expand Medicaid, then we’re going to be taking a look at those figures."
Here are a couple reasons to pass on Medicaid expansion.
Medicaid doesn't make people healthy. An Oregon study designed to figure out whether Medicaid patients are healthier than the uninsured found no evidence that Medicaid improves the physical health of enrollees.
This randomized, controlled study showed that Medicaid coverage generated no significant improvements in measured physical health outcomes in the first two years, but it did increase use of health care services, raise rates of diabetes detection and management, lower rates of depression, and reduce financial strain.
Estimated Medicaid expansion savings are significantly skewed. Department of Public Welfare Secretary Beverly Mackereth challenged rosy predictions cited in the Independent Fiscal Office’s analysis.
Overall, the Department has serious concerns regarding several assumptions included in the report . . . the IFO report contains what we believe to be several material problems that merit further review and analysis before the report’s conclusions could be relied upon.
Altogether, she estimates the IFO overstates savings by about $515 million for 2014. Why the difference? Mackereth contends the analysis underestimates needed staff and training costs, underestimates the number of Pennsylvanians who will sign up for coverage, and overestimates the savings from moving patients from state programs onto Medicaid, where they qualify for more "federal dollars".
Finally, we still don't know what's in the bill. Last week we learned from Senator Jay Costa that federal officials will force children enrolled in CHIP (Children's Health Insurance Plan) to enroll in Medicaid regardless of whether Pennsylvania expands [pay wall]. Even the Governor's office was unaware of this provision until recently. Unlike Medicaid, CHIP patients can choose from a wide variety of private plans, which the government subsidizes on a sliding scale. Kicking kids off CHIP could force families to find new doctors since many CHIP doctors do not accept the lower Medicaid reimbursements.
Governor Corbett should reject any expansion to avoid what Michael Cannon calls a "fiscal timebomb" in the Morning Call and pursue Medicaid reform that improves outcomes by giving patients choice and control.
RELATED : PENNSYLVANIA STATE BUDGET, JOBS & ECONOMY, HEALTH CARE, MEDICAID
The final Senate hearing on liquor privatization has concluded, where do things stand for Pennsylvania taxpayers and consumers?
Carl Marrara, director of government affairs for Pennsylvania Manufacturers' Association and Kevin Shivers, executive state director for NFIB - PA join us for a Google Hangout to discuss the hearings, voter support for privatization, and why privatization is good for Pennsylvania businesses.
Want to get involved? Call, write, or tweet your Senator today. Click here to send an email now.
- PMA Poll: Strong Majority of PA Voters Want Liquor Privatization
- Follow PMA and Carl Marrara on Twitter
- Follow NFIB-PA and Kevin Shivers on Twitter
RELATED : LIQUOR STORE PRIVATIZATION
This morning marks the final hearing in the Senate on the House-approved proposal to privatize Pennsylvania’s Prohibition-era liquor system. Time is ticking for the Senate to finally end the government booze monopoly.
A new poll released today from the Pennsylvania Manufacturers' Association shows that once again, the majority of Pennsylvanians support liquor privatization. Further, support increased when supplementary questions were asked. The poll revealed:
The number [of voters] who would be more likely to support liquor privatization grew to just under 70 percent if penalties for selling to minors became stricter (69 percent) and if displaced workers could find jobs in the private sector (68 percent).
These results bolster privatization proponents because the current legislation being debated in the state Senate increases by tenfold penalties for selling to minors and establishes job tax-credits and training programs for PLCB retail and wholesale employees. Moreover, a recent analysis of policy changes in Washington State reveals that their privatization efforts led to a net increase in jobs and increased overall state revenues.
The Senate needs to hear from you, the majority of Pennsylvanians that want government out of the booze business. Click here to write your Senator today.
On social media? Post on your Senator’s Facebook wall and Tweet out your support (some hashtags: #paliquor #consumerchoice #plcb).
RELATED : PRIVATIZATION, LIQUOR STORE PRIVATIZATION
Pennsylvania cyber schools receive on average about 20 percent less revenue per student than school districts spend.
Like other public charter schools, cyber schools receive funds only when families choose them. A portion of taxpayer dollars allocated for a student's education in her resident school district follows the child to her new cyber school. Now proposed legislation would cut cyber schools' funding even further, effectively treating their students like "second-class students."
Though cyber schools have a different learning model, they have many similar costs to regular public schools. For example, they must still pay for facilities, including administration offices and space for teachers to teach by video, and several offer blended learning centers. But they receive no funding from school districts for their facilities' costs. They must also provide health services, and their mandated annual PSSA testing can cost the largest cyber schools with thousands of students scattered across Pennsylvania hundreds of thousands of dollars to execute. Cyber schools also offer extracurricular activities and electronic library services that cost money, too.
RELATED : CYBER SCHOOLS, EDUCATION SPENDING, EDUCATION
In 2010-11, public cyber schools cost $319 million out of $25 billion on PreK-12 spending—just 1% of Pennsylvania’s total public education spending.
|Cyber vs. School District Spending, 2010-11|
|Cyber spending as % of school district spending||1%||81%|
|Source: Pennsylvania Department of Education, "Expenditure Data for All LEAs," 2010-11,
Click here to view or download the AFR Summary-Level Data report.
Total 2010-11 cyber enrollment was 27,779.
RELATED : CYBER SCHOOLS, EDUCATION SPENDING, EDUCATION
On June 1, it will be one year since Washington state ended its government monopoly on liquor sales. To mark the occasion, the Seattle Times has provided a nice overview of how privatization has affected Washingtonians thus far. Here are some of the highlights:
- Liquor sales have increased.
- Tax revenue has increased.
- Prices have varied, in part because of new fees and taxes.
- Washington has seen a net job gain after privatization.
- Drunk driving fatalities are on the decline.
- The state has seen an increase in shoplifting.
How were things before privatization? "It was a disaster." That is how Tim Sheldon, the Democratic President Pro Tempore of the Washington State Senate, described the liquor monopoly in his state in a podcast.
Senator Sheldon lamented how difficult it was for retail stores to get the inventory they needed. Sound familiar, Pennsylvania? The state's single liquor distribution warehouse could only process 15,000 cases a day, one-fourth the production of a similar private distribution warehouse based in Seattle.
It is true that some liquor prices have increased in Washington. However, privatization is not to blame. Excessive taxes and new fees is the reason many have seen a price increase. Washington now imposes the highest liquor tax in the country at $35.22 per gallon, according to the Tax Foundation. The state has imposed an additional tax on private distributors and will require them to collectively pay $150 million in licensing fees. These costs are passed on to consumers in the form of higher prices, which is driving consumers to other states for their booze.
The disasters predicted for Pennsylvania by vested interests opposing privatization have simply not happened in Washington. Pennsylvania must pass full privatization, which means a complete divestiture of both the retail and wholesale sides of liquor sales, absent any new taxes or fees. The evidence is overwhelming; the government in the booze business is a lose business.
RELATED : PRIVATIZATION, LIQUOR STORE PRIVATIZATION
Pennsylvania needs pension reform that provides state workers with a sustainable retirement system that’s fair to new workers, existing employees and taxpayers. What are our options? The current system is a defined benefit pension plan that guarantees a government income for life. Switching to a defined contribution plan would require the government to regularly deposit a guaranteed percentage of a worker’s salary into a personal retirement account, like a 401(k).
This is the sixth in a series of blog posts debunking the myths surrounding Pennsylvania's pension crisis.
Myth: State pension plans cost less to administer than 401(k) plans managed by Wall Street firms.
Fact: A Deloitte study found that 401(k) plans cost the same or less than traditional plans to administer. SERS and PSERS spent more than $760 million last year on administrative costs and investment fees. As a percentage of assets, these costs exceed the average total fees for large 401(k) plans as calculated by Deloitte.
The fact is, Pennsylvania’s troubled state pension funds already rely on expensive Wall Street investment firms to close looming deficits. For example, in 2006, the State Employees’ Retirement System (SERS) gave $6 billion to six private investment firms to buy risky hedge funds in hopes of earning lavish returns to cover its pension shortfall.
Myth: Converting to a 401(k) pension system would create significant “transition costs.”
Fact: Opponents claim government-mandated rules that require Pennsylvania to pay off unfunded liabilities sooner will cost the state, but the national Governmental Accounting Standards Board (GASB) regulates only the accounting methods—it doesn’t mandate when or how debts must be paid. Taxpayers are already on the hook for the $40 billion unfunded liability for state and public school workers. Switching to a new plan does not add to this liability.
Pennsylvania state government and school districts currently put less money into the pension plans than the “Annual Required Contribution” mandated under accounting rules. Regardless of reforms lawmakers may enact for new workers, the current funding system is unsound.
RELATED : TAXES & SPENDING, PUBLIC EMPLOYEE PENSIONS AND BENEFITS, UNIONS & LABOR POLICY
A new poll has found a very healthy majority—62 percent—of the state’s registered and likely voters favor parental choice in public education. And 87 percent think parents should have the option to choose the type of public school that’s best for their children.
But while the benefits of choice in public education may be reaching the public—comparisons to earlier polls show increases in support for charter schools—it’s taking Pennsylvania’s legislators a little longer to get the message.
Legislation pending in the state House would unfairly target cyber schools for cuts that could reach as much as 12 percent of their funding. While some reforms are necessary, cyber schools already receive an average 81 percent per student of the funds given to traditional schools. These additional cuts would make it extremely difficult—if not impossible— for cyber schools to compete. Indeed, many would be forced to close their doors at these drastically reduced funding levels.
As the new poll shows, Pennsylvania’s parents want more options in public education, not fewer. Students such as Hannah, Alyssa, Avi, Stephen, Rachel, and tens of thousands more rely on cyber schools to reach their full potential.
You can defend their choice at CyberSchoolsSave.org by telling the governor and your legislators that you support cyber school funding!
RELATED : SCHOOL CHOICE, CYBER SCHOOLS, EDUCATION
What does a neighborhood do when its surrounding school districts are underperforming, or downright violent and failing? Where can the kids go? In the Pittsburgh area, many students find refuge in a different type of public school: Propel Braddock Hills High. Against the odds, the charter school is achieving great results—a testament to the power of school choice.
Right now, Propel Braddock Hills High has about 250 students, but the waiting list for all nine Propel schools around Pennsylvania is 3,000 and counting. The school nurtures its students, including ones like Brandon Quarles, who come in with little but poor grades and attitude. The teachers and administrators offer innovative programs, pull students up to higher academic standards, and know every kid by name. Watch how Braddock Hills High is transforming the lives of its students—and its community.
RELATED : SCHOOL CHOICE, EDUCATION
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The Commonwealth Foundation is Pennsylvania's free-market think tank. The Commonwealth Foundation crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.