PLCB's “record revenue” no reason to celebrate

HARRISBURG, PA—Today, the Pennsylvania Liquor Control Board announced “record revenue and net income” during fiscal year 2012-2013, touting contributions to the state General Fund of $512 million. The problem is they’re only telling half the story.

This is the same stunt the PLCB pulled last year – bragging about record high sales – meanwhile it failed to mention ending the fiscal year 2011-2012 with negative $9.8 million in net assets. These losses are due in no small part to years of mismanagement, including wine kiosk failures, government-branded wine labels, and inventory systems that couldn’t count correctly.

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” was generated from taxes. Privately-owned liquor stores would produce the same revenue or more, as private companies pay additional taxes and licensing fees.

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In addition, privatizing stores would end the government monopoly and generate more revenue in Pennsylvania by avoiding the need for residents to bootleg wine and spirits across state lines to get the price and selection they want.

A survey conducted for the PLCB showed that 45 percent of residents in Philadelphia and its surrounding counties purchase some or all of their alcohol outside of Pennsylvania. The PLCB’s own numbers showed that consumers purchased approximately a quarter of their wine and spirits in other states. This border bleed equals more than $180 million in lost sales, and more than $40 million in lost state tax revenue annually from just a handful of counties.

No matter how the PLCB spins the numbers, the government-run liquor system is not a cash cow for the state.

For more information, please contact Cindy Hamill, Director of Strategic Communications at (856) 607-4208 or chd@commonwealthfoundation.org.

The Commonwealth Foundation crafts free-market policies, convinces Pennsylvanians of their benefits, and counters attacks on liberty.