Ready for Higher Liquor Prices?

The floodgates have opened on the Lords of Liquor’s most infamous (and erroneous) claim that government-run liquor stores bring in lots of cash for the state. In reality, the PLCB has a negative balance that if left unchecked, may require higher wine and spirits prices for consumers.

As PA Independent explained yesterday, lawmakers decide how much the PLCB will transfer to the state each year. However, the last three fiscal years they’ve overestimated the PLCB profits to the tune of $49.2 million. Using accounting tactics, the PLCB has been able to make payments to the state beyond its profits, but this has left their tab dry. The PLCB ended the 2011 fiscal year with negative $31 million in net assets.

Karen Foust, a professor of accounting and taxation at Tulane University’s Freeman School of Business in New Orleans told PA Independent,

“They [PLCB] can’t continue this forever,” Foust said. “The PLCB will either have to raise their prices, or the state of Pennsylvania will have to loan them some money, or adjust the amount of the transfer.”

Politicians can continue to vote with the union bosses who benefit from the status quo and risk the PLCB raising prices on consumers or forgo its state liquor income. Or it can listen to the vast majority of Pennsylvanians thirsty for better selection and prices and get the government out of the booze business. Until then, stay thirsty my comrades.