Greg wants to know what we should be fighting for in the alcohol reform bill, and offers a few ideas:
Tax liquor sales so the state is making a similar amount of money.
Find a way to make sure the system isn’t taken over by chains and that small business owners can stay competitive.
Ensure that “liquor store privatization” isn’t code for breaking up the union that protects workers at these stores.
I think Greg and I are both accepting Mike Turzai’s premise here:
“Should Pennsylvania be in the business of selling alcohol? Is this a core function of government? I don’t think so,” Turzai said in a statement. “The current system is antiquated and out-of-touch. It’s time to end the statewide monopoly and give consumers better selection and more convenience.”
This is exactly right. And the reason liberals should get behind this is that we don’t need public employees selling booze. The market will do that on its own. We need public employees providing crucial public services that the market doesn’t provide on its own, or does not provide enough of.
Our ability to pay government employees is constrained by political attitudes about the appropriate level of taxation. We need to make the best use of that money that we can. If the surplus created by regulating alcohol supply accrues to the liquor store employees instead of the taxpayers, we have less money for other more useful public services.
But, it really does matter how you set this thing up. Limiting the supply of alcohol creates a surplus. Who gets this surplus? I think it should be the taxpayers.
So I really don’t like the idea of limiting competition by creating a new side market for liquor store licenses. The appropriate value for these licenses is $0.
Turzai would turn them into assets, and they will become very expensive just like liquor licenses for restaurants and bars are way too expensive. Rather than letting store owners sell the licenses to a new buyer and pocket the profit, there should be a new auction every few years, with the proceeds going to the taxpayers. If you’re trying to sell us on competition, then you have to design a competitive market.
I also want to say that a liberal blogger shouldn’t have to be making this case. There is a very loud, supposedly “libertarian” think-tank in Harrisburg…
What else should we want? Here’s a summary of my wishlist from Patch.
1. Supermarket sales
I don’t think there’s any reason to worry that the market will be unfriendly to small businesses. It’s true that grocery stores will be able to offer a better deal on the most popular products, but they won’t be able to carry everything, so there’ll be a vibrant market for niche and boutique products. That’s why I don’t see a reason that we need to bother with limiting the number of liquor licenses. The market will settle into an equilibrium where most people buy wine and liquor in supermarkets, and people who are looking for specialty items will go to smaller boutique stores.
2. Uncap Liquor Licenses
This is a heavy lift, and I’m not sure it’s even politically possible, but $250K is way too expensive for a liquor license for a bar or restaurant. “Gastropubs” are popular right now, and the places that have that sort of vibe, like the Bookstore, Black and Blue, and the Mint, are really popular in the LV. But the cap on liquor licenses means you can’t get more of those kinds of places unless other places close. It limits competition and it’s needlessly slowing the redevelopment of the LV’s downtowns.
3. Market Prices
PA’s current tax system makes low-end alcohol too cheap. The gallonage tax fixes this.
4. Where vs. How Much
It doesn’t matter who sells booze. You’re constrained by money, not by the ability to get to places that sell alcohol. So demand-side regulations (taxes) make more sense. The whole premise behind regulating alcohol in the first place is that we want to hold down consumption for public health reasons. The idea that public safety requires us to have an uncompetitive annoying system for buying alcohol is seriously mistaken. We need to move away from this idea that the government should be controlling who you can buy alcohol from, rather than how much alcohol you can buy.