More Crime, Divorce, Poverty After Liquor Store Privatization?

By Eric Boehm| PA Independent

HARRISBURG – For most of the last two years, the debate over alcohol privatization in Pennsylvania has focused on the financial aspects of the Republican-backed plan to sell-off the state liquors.

But such bottom-line issues took a backseat as the state Senate held the first of three planned hearings on the liquor bill passed by the state House in March.

Social issues were front and center in the Senate Law and Justice Committee, with privatization painted as a harbinger of doom by a litany of testifiers who promised everything from an increase in crime and disease to higher rates of unemployment and prostitution.

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And all, they said, because a private retailer would be allowed to sell a bottle of wine instead of a state-run establishment.

State Sen. Charles McIllhinney, R-Bucks, said the hearing was a chance to vet aspects of the proposal that had not been heard during the House debate.

“I think it was important to get that out first,” he said. “Whatever we decide to do, there are consequences.”

The House-passed liquor bill would slowly close the 620 state-owned and operated liquor stores as up to 1,200 private liquor licenses are auctioned off. It would also allow grocery stores to obtain a license to sell wine and would let beer distributors obtain a license to sell wine and spirits.

With all those new retail markets for liquor, there would be a need for more resources dedicated to enforcing the state’s liquor laws, representatives from law enforcement groups said on Tuesday.

“We would need even more members, which would mean even more funding,” said Joe Kovel, president of the Pennsylvania State Troopers Association.  He asked the Senate panel to include $5 million in additional funding, if privatization was approved.

The state police are charged with enforcing most of the state liquor code.

State Police Commissioner Frank Noonan agreed with the assessment of $5 million in additional costs for necessary liquor enforcement, but he said the police would be able to handle any increased social ills to come from privatization by boosting their ranks and changing how they approach the issue.

Estimates for revenue generated range from $600 million to $1 billion. Gov. Tom Corbett wants to use most of that revenue to create a new block grant program for school districts.

State Sen. Richard Alloway, R-Franklin, said he was sure the government would be able to find an additional $5 million to cover the concerns of law enforcement out of the “hundreds of millions of dollars” expected to be generated by selling the private licenses.

The list of testifiers at the hearing was stocked with opponents of privatization – and opponents of access to alcohol in general – who blasted the bill as a gateway to increasing a host of social ills, including increases in child abuse, teen pregnancies, car crashes, mental problems and alcohol abuse.

Others talked about the costs of more emergency room visits, higher divorce rates, more poverty, higher unemployment, more crime and children born out of wedlock.

“Regardless of what you think about alcohol policy, it’s not just about making money,” said Deb Beck, president of the Drug and Alcohol Service Providers Organization of Pennsylvania, which works with individuals struggling with substance and alcohol abuse. “If you increase access to a desired substance, you’re going to increase consumption.  If you increase consumption, you’re going to increase alcohol-created problems.”

But advocates of privatization say there are plenty of controls in the legislation to prevent rampant abuse of a private alcohol system.

For starters, all retail stores will be required to have ID card scanners and will face penalties if caught selling to underage customers. The state police will also run compliance checks on all private liquor stores – no such checks are currently done on the state-owned system.

Some grocery stores already have licenses to sell beer by obtaining restaurant licenses, and those that sell adult beverages have an excellent track record, said David McCorkle, president of the Pennsylvania Food Merchants Association, a trade group.

Nathan Benefield, research director at the Commonwealth Foundation, a free market think tank in Harrisburg, said he was disappointed that evidence on the social ills of private alcohol sales were presented without the chance for current retailers or retailers in other states to counter the claims.

Since Pennsylvania ranks in the middle-of-the-pack in terms of underage drinking offenses and accidents caused by drunk driving, it is hard to argue that the state-control model is preventing many of the harms that opponents point to, he said.

McIllhinney said the second hearing would focus on the retailers and the wholesalers, while the third hearing, scheduled for mid-June, would look at the logistics of privatization.

He reiterated his opposition to the version of the liquor bill passed by the state House and said that bill would fail in the state Senate, if it were given a straight up-or-down vote. But he maintained that the state Senate would make an effort to get a liquor bill to Corbett’s desk before the end of June, though he was noncommittal when asked if the hearing schedule allowed enough time for that to happen.

“If I feel I need more time, I’ll take more time,” McIllhinney said.

Boehm can be reached at Eric@PAIndependent.com and follow @PAIndependent on Twitter for more.