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LETTER: Rendell off base on liquor privatization
Having worked closely with Gov. Ed Rendell during his tenure, I was surprised that he seems to have lost touch with the fiscal impact that dismantling the Pennsylvania Liquor Control Board (PLCB) would have on the state (State budgeting should be a bipartisan process: Ed Rendell.)
The governor did not pursue privatization schemes precisely because he understood the math does not add up – especially in the first year after the asset is gone and up to 5,000 Pennsylvanians are facing unemployment. A quick refresher might be in order.
Former Gov. Tom Corbett, an ardent privateer, commissioned a study by Public Financial Management, Inc. (PFM), which found that privatizing the PLCB would result in more than $1.4 billion in transition costs over five years. PFM also found that lawmakers would have to come up with $408 million in new revenue annually to make privatization fiscally neutral.
That is almost a half a billion dollars in new taxes or fees just to break even for selling off an asset that generates more than $565 million a year in profits, taxes and other transfers to the state. And GOP lawmakers who claim to know how to run a business think this is a good idea?
Gov. Rendell is wrong on the polling but that is understandable given the media and many lawmakers continue to ignore the numbers. Independent polling shows that 57 percent of Pennsylvanians support either leaving the system intact or modernizing the stores (Franklin & Marshall, June 2014). Support for eliminating the PLCB is under 50 percent, according to that same poll.
The most recent Franklin & Marshall Poll, issued just last week, found only two percent of registered voters believe "privatizing the state liquor stores" should be a top priority for lawmakers.
I have a tremendous amount of respect for Ed Rendell and his legacy of supporting public education and our middle class. But I think, to borrow a sports analogy the governor might use, on this issue, it is a swing and a miss.
WENDELL W. YOUNG IV
President of UFCW Local 1776 and Chairman of the UFCW PA Wine and Spirits Council