The Great Pennsylvania Liquor Store Privatization Battle

State Senate Republicans are more interested in playing footsy with unions than helping taxpayers.

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The states are supposed to be laboratories of democracy, a place where new ideas can be tested and new policies worked out that, if successful on their merits can be replicated elsewhere.

One example of this in practice is welfare reform, the most successful domestic policy change in a generation. The federal reforms championed by former House Speaker Newt Gingrich in the face of significant resistance from President Bill Clinton contained elements first tested and proven to work in places like Michigan, Wisconsin and Massachusetts. In the current era, when state budgets are stretched beyond the breaking point, privatization seems like an idea that could have a similarly beneficial impact for all concerned.

Turning state functions over to the private sector, where they can be undertaken with greater efficiency and at less cost seems like an obvious albeit partial solution to the fiscal crisis many states are experiencing. That they have not taken root is a tribute to the fact that many of these same programs are under the protection of powerful special interest groups like labor unions and by the politicians who draw their power from their ability to oversee them. A perfect case in point is Pennsylvania, where Republican Gov. Tom Corbett has made it a priority to privatize the state-run liquor stores and the state-run distribution of distilled spirits.

[Read the U.S. News debate: Should States Be Able to Collect Sales Tax on Goods Sold Online?]

In all but two states, these businesses are in private hands and are run successfully and profitably. The facts are on the reformers' side, which is why Corbett has a strong ally in the GOP-controlled state House of Representatives, which passed a generally solid privatization bill in line with what he had had asked for.

Unfortunately for Corbett, a few member s of his own party in the Republican-run State Senate are of a different mind. They do not share his zeal and have, in piecemeal fashion, done just about everything they can to stop the initiative from moving forward. They are trying to run out the clock at the end of the current legislative session so the whole effort has to start again.

Why are they doing this? Perhaps they're acting at the behest of those who have allegedly channeled money into their campaign kitties, organizations like the United Food and Commercial Workers Union – whose members, not coincidentally, work in those same liquor stores.

In any event, no matter how you pour it, there is big money is at stake – which is probably why privatization's opponents are running a television spot which Hot Air blogger Erika Johnsen described as "a visualization of what 'shameless' looks like." In a nutshell, the ad claims that privatizing the liquor business in Pennsylvania will kill people.

[See a collection of political cartoons on the budget and deficit.]

Well, as the liberals would argue in just about any other situation, so will the cuts in social programs that will have to be made if the liquor stores and distribution of distilled spirits aren't privatized. Pennsylvania stands to make a lot more money with these enterprises in private hands than it does from owning them, which could be a net plus for the taxpayers. Writing for National Review Online, Michelle Minton cites the example of Washington state, which just took the steps Corbett is urging for Pennsylvania. "Now more than 1,400 retailers can sell liquor, and consumers can shop for booze at nearly 900 more outlets than they could under the previous state-run regime," she wrote. "Meanwhile, the state government is benefiting from higher tax revenues from alcohol sales – a projected $425 million by the end of fiscal year 2013, compared to $309 million for FY 2012."

Instead of seeking to generate a similar windfall, at least one Republican in the State Senate has decided to openly stand in the way. He is probably not alone, having conclude that the interests of their friends in the unions – the same unions that spend so much time and money trying to defeat GOP candidates for statewide and local office every time the Keystone State holds an election – are more worthy of attention than those of the ordinary taxpayers. It is these kinds of betrayals of conservative and Republican interests that leave a bad taste in the mouth of even the most enthusiastic GOP voters.

Privatization can be a good thing. It did wonders to revive the British economy during Mrs. Thatcher's tenure at 10 Downing Street. It's worked in other states on issues that are less black and white than liquor stores and the distribution of distilled spirits. There is simply no good excuse to prevent it from moving forward in Pennsylvania. They only thing stopping it are a few Republican politicians who would rather play footsy with the opposition than stand firm on free market principles.

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