Yesterday, the Pennsylvania Liquor Control Board reported record revenue and “profits,” leading some to claim that privatization just isn’t necessary. Not so fast.
First, it should be no surprise that a government monopoly brought in record revenue last fiscal year. When you’re the only game in town, bringing in customers isn’t exactly a challenge. But where the PLCB does face competition—from Delaware and New Jersey—consumers choose the lower prices and greater convenience available in other states. See: border bleed.
As for the record “profits,” the PLCB isn’t any more profitable than the IRS. Both just collect money from taxpayers and send it back to the state. The PLCB’s “profits” are not from efficiency or good service, but are the result of the state’s monopoly on the sale of wine and spirits.
The PLCB wants you to believe that without them “record revenue” dries up. But in 2011-2012, more than 80 percent of the PLCB’s $500 million in “profits” were generated from taxes. Privately-owned liquor stores would produce the same revenue or more, as private companies pay additional taxes and licensing fees.
Let’s not forget this is the same PLCB that ended fiscal year 2011-2012 with negative $9.8 million in net assets and gave us government-branded wine labels, inventory systems that cost taxpayers millions of dollars, failed wine kiosks, and emergency employees who make more than $80 an hour.
The PLCB’s record revenue and “profits” are just a distraction from the failure of the agency to give consumers the choice and convenience they desire.