Earlier this week Washington State officials auctioned off 167 liquor licenses for a total of $30.75 million, an average of $184,000 per license, according to media accounts. The highest winning bid was $750,100 for an individual store in south Tacoma whereas the cheapest store license went for just $49,600 for an outlet in Spokane.
Already, anti-privatization advocates are drawing parallels to Pennsylvania’s liquor license system.
The United Food and Commercial Workers Local 1776 released a statement saying that the result of Washington State’s liquor license auction “makes it clear that Pennsylvania lawmakers should reject – once and for all – House GOP Leader Mike Turzai’s reckless scheme to dismantle the Pennsylvania Liquor Control Board.”
Turzai has claimed that an auction of 1,250 Pennsylvania licenses would generate $2 billion, which works out to more than $1.6 million per license or nine times what Washington State’s auction generated last week.
The UFCW Local 1776 noted in their press release that “if Pennsylvania were to go down the same path as Washington [in terms of average license sale], the state would realize $230 million for an auction of 1,250 licenses – less than half of what the current system generates in a single year.”
Given that the PLCB generates $530 million a year in taxes and revenue for the state’s general fund, even if PA licenses sold for double the average market value in Washington State, the revenue would still not generate the single year numbers for the current system.
Furthermore, the PLCB employs 5,000 Pennsylvanians—jobs that would be put at risk in a privatization flurry.
“Mike Turzai has been telling his colleagues for two years that an auction in Pennsylvania would generate anywhere from $2 billion to $6 billion. Just do the math and you’ll see that it’s a fantasy,” said Wendell W. Young IV, President, UFCW Local 1776. “Licenses just do not sell for that amount anywhere in the country – not in any of our neighboring states or in Washington.”
UFCW is working with both Democratic and Republican lawmakers in both chambers to modernize the PLCB. Senate Bill 1287 would allow the PLCB to operate more like the retail and wholesale business that it is. The bill provides flexibility in pricing, procurement and personnel.
“This is common sense legislation that would help the PLCB generate at least $70 million in new revenues for the state. Mike Turzai needs to recognize that it is time to move on and strengthen this valuable asset,” Young said.
Turzai’s colleagues have already rejected two of his schemes to privatize, most recently when members of the House Liquor Control Committee gutted his bill before sending a completely rewritten version to the House floor.
“Turzai’s plan is irresponsible and unreliable. This discussion should end now. It is time to modernize the PLCB,” Young said.