The return of expired liquor licenses—miraculous resurrection or terrifying zombification? Well, depends on who you ask. Since 2016, when Act 39 allowed expired liquor licenses to return to the auctioning block, businesses have been eager to seize upon the increased supply to meet consumer demand. However, one state representative is gearing up to fight these so-called “zombie licenses.”
Rep. Frank Burns criticized the Pennsylvania Liquor Control Board’s efforts as “manipulating the market.” To protect rural small businesses seeking to sell their liquor license from “zombie” license auctions, Rep. Burns’s bill, House Bill 1544, would halt the sale of expired licenses until a commission studied the license demand in each county. Rep. Burns is right to criticize PLCB’s antiquated methods for distributing licenses—ideally government shouldn’t be in the business of deciding how many liquor licenses are appropriate for each Pennsylvania county. That’s a decision for consumers, not bureaucrats.
Sen. Patrick Stefano’s bill builds on the idea that consumers should be in charge by allowing businesses to add a “spirit permit”—a long overdue addition.
More impactful than “zombie licenses” is the state’s detrimental business environment that is hampering all Pennsylvania small businesses, including restaurants and taverns. From 2017 to 2018, the state had a net loss of 20,463 residents. In Rep. Burns’s Cambria County alone, 900 residents left—almost double and triple the losses of neighboring counties.
Ultimately, Rust Belt communities need more than just lucrative liquor licenses to alleviate their migration problems. The first place to look is our tax code given we have the third highest corporate net income tax in the nation and the 15th most burdensome state and local taxes in the nation. Add on heavy-handed regulation, including the liquor system; it’s no wonder businesses are being overwhelmed.
Pennsylvania needs permanent solutions, such as lowering the corporate net income tax and privatizing the sale of wine and liquor. These changes will ultimately bring new life to businesses, not only in Rep. Burns’s district, but across the state.