Pennsylvania Stuck in Prohibition

Eighty years ago, baseball was still segregated, Social Security was non-existent and it was illegal to buy alcohol in the United States. Times have changed, and Prohibition has since ended — except for a few holdout states that have failed to evolve their laws to coincide with changing national attitudes towards liquor.

It’s still a commonplace occurrence for states to meddle in the booze business — even when a majority of citizens support reversing this archaic public policy. In recent years, policymakers in Alabama, Idaho, Ohio, North Carolina, Pennsylvania, Texas and Virginia have all tried to end the government control of liquor sales without success.

The news isn’t all dismal, however. Last year Washington voters chose to kick the government out of the alcohol business, and just last week Pennsylvania lawmakers approved a privatization bill in the House of Representatives. An epic fight is now brewing in the Pennsylvania Senate between the defenders of the status quo and the friends of liquor liberty.

Pennsylvania’s battle highlights many of the issues facing the pro-privatization lobby in control states, though its system is more broken than most. It’s one of only two remaining states with a complete government monopoly over the sale of any type of alcohol other than beer, both wholesale and retail.

When the state created the Pennsylvania Liquor Control Board in 1933 following the passage of the 21st Amendment, then-Gov. Gifford Pinchot said it would “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.”

To that end, government has been successful and Pinchot’s legacy lives on. While most of the country enjoys the freedom of walking to the corner grocery store to buy a bottle of wine or a six-pack of beer, Pennsylvanians face the annoying prospect of driving to the nearest government-run store — “nearest” often being a loose term — for wine or spirits, a distributor or tavern for beer, and making a third stop for groceries.

All of this could soon change, as the House vote shows. But standing in the way to block liquor freedom for Pennsylvania taxpayers and consumers are government unions that profit from the monopoly.

And what a fuss those unions are making. The United Food and Commercial Workers, which has roughly 3,000 members in the state-run stores, is doing everything it can to scare the General Assembly away from meaningful reform. One popular slogan, yelled loudest by a UFCW official at a pro-privatization press conference, is that privatization is a “picture of profit before people.”

Not true. The proposal would nearly triple the number of stores — mostly small, mom-and-pop businesses — selling wine and liquor, and allow thousands of grocery stores to expand and carry wine. The result is thousands of additional jobs for Pennsylvania families.

Pennsylvania’s economy would quickly feel the benefits. An economic analysis conducted for the state Office of the Budget estimated privatization would bring back $92 million from residents who now illegally cross state lines to buy their booze to get the prices and selection they want. Privatization would be an economic stimulus and create jobs.

It wouldn’t hurt the government’s coffers, either. The Office of the Budget estimates that alcohol would generate more tax revenue after privatization.

There’s also the small fact that liquor privatization is immensely popular. My organization, the Commonwealth Foundation, recently commissioned a poll of our state’s citizens. The poll showed that 61% of Pennsylvanians — Republicans, Democrats, Independents, even union households — want the government to get out of the booze business.

The numbers are even higher for regular patrons of the government-run stores. A full 77% of weekly customers voiced their support for cutting the red tape between them and the checkout counter.

Each of the 17 remaining government control states could benefit from privatization. While passage of liquor liberty legislation through the Republican-controlled Pennsylvania Senate remains far from certain, a victory here could generate the momentum in the remaining states to finally issue a last call for government-sold alcohol.

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Matthew Brouillette is president and CEO of the Commonwealth Foundation, Pennsylvania’s free-market think tank.