Basic Math & Simple Facts Show Privatization is a Losing Proposition for Pennsylvanians

Jun 04, 2013, 15:58 ET from UFCW PA Wine & Spirits Council

HARRISBURG, Pa., June 4, 2013 /PRNewswire-USNewswire/ -- UFCW PA Wine & Spirits Council -- Gov. Corbett and the privateers continue to mislead Pennsylvanians in their rush to dismantle the Pennsylvania Liquor Control Board, despite the fact that the agency is setting records in sales, profits and transfers to the state treasury, Wendell W. Young IV told lawmakers today in a meeting of the Senate Law & Justice Committee.

"Gov. Corbett and Representative Turzai continue to claim that the LCB is a failed model; that the agency is losing money; and the shops themselves are not profitable.  They're dead wrong," Young said. "You don't have to take my word for it.  You can ask the governor's own Comptroller to come in here and testify about the financial results that their office has certified."

In written testimony provided to the Committee, Young pointed out that the LCB set a record for gross annual sales in FY '11-'12 while net sales increased by $86 million or 5.5 percent, the largest increase since 2007-2008.

In addition, Young noted that the agency will deliver more than $700 million in taxes, profit and other transfers this year, which is $170 million more than the LCB contributed last year.

"Looking ahead, the LCB will generate more than $1 billion a year based on modest growth in sales and Tom Corbett wants to give this asset away. It makes absolutely no sense," Young said. "They have either decided to ignore basic math or to mangle the truth."

Gov. Corbett claims that his privatization scheme will generate new jobs, despite the fact that his own consultants at Public Financial Management's (PFM) study found that virtually no new jobs will be created.

PFM said that "Minimal workforce will be hired by existing retailers, who will make up the majority of the licensees" and "2,302 full-time equivalent employees who work for the PLCB will go on unemployment."

PFM also noted that "employees in rural counties will have fewer opportunities for state reemployment."

"Time and time again, the governor and the privateers have told us that privatization would generate all these jobs but their own experts have told them that it just will not happen," Young said.

Young also noted that administration claims that privatization will generate a one-time, $1 billion windfall, despite the fact that PFM's study found that taxpayers will be stuck with $1.4 billion in transition costs as a result of privatization.

"From day one, the taxpayers lose. This is simple, basic math," Young said.

The administration continues to ignore a majority of Pennsylvania voters, who now reject privatization according to truly independent polling. The most recent Franklin & Marshall poll found that 57 percent of Pennsylvanians favor modernization or leaving the system intact while support for privatization has dropped to below 50 percent.

"The Lt. Governor testified about the polls and the support for privatization. He fails to recognize that as more and more is learned about the real impact of privatization, support drops. Even the biased polling commissioned by right-wing ideologues shows support continues to plummet."

Lawmakers have an opportunity to modernize the LCB to allow for more Sunday stores and hours as well as greater flexibility in pricing and procurement could help the agency generate up to $100 million more a year in profit for the state while improving customer convenience.

To read Young's testimony, please visit

SOURCE UFCW PA Wine & Spirits Council