Fact Check: Pennsylvania’s Liquor Store Revenue
Many myths continue about the privatization of Pennsylvania’s state-owned liquor stores. One is that the state government would lose annual revenue from liquor sales. See Wendell Young, speaking on behalf of those who profit from the status quo, cited in a recent editorial:
The current system already brings in more cash than it costs taxpayers, according to Young, some $500 million a year.
Young made similar comments about the revenue from state stores in another article (which noted that the champagne served to celebrate the opening of a state store had to be bought from out of state)
But over 80% of that revenue for state government is from tax revenue – both alcohol taxes and sales taxes. That same tax revenue would be there with privately owned stores. In fact, there would likely be more tax revenue, due to increased sale from improved service and lower prices. In fact, by eliminating the state stores mark-up, the Commonwealth could even charge a higher alcohol tax rate, and still offer lower prices.
Not only would higher tax revenues make up for the state stores “profit” that is returned to the General Fund, but privately-owned liquor stores would pay the state Corporate Income Tax, sales tax on their (taxable) purchases, and local property taxes, offsetting. Not only would privatization net a one-time boon of $2 billion or more, but would likely increase annual revenue for government.
We get all that from privatization, while improving service and having little social impact.