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Privatization would be a one-shot infusion of cash that would get rid of a system that pumps hundreds of millions each year into the state and local economies.

Reading Eagle: Selling state stores old, costly notion

January 23, 2011



When things are tough all over, why not tough it out?

Instead, people look for the easy way out and end up making things worse.

It's like struggling in quicksand: You only sink faster.

Sure, don't struggle, and you'll still sink. But you'll sink more slowly, and that might give you time to think of some way out of the muck.

So spanking-new Gov. Tom Corbett, facing an estimated $4 billion budget deficit, has a short list of quick-fix reforms designed to save money.

But this new dog's list is full of old tricks.

High on his list is the old chestnut of selling - or privatizing - the state's monopolistic liquor and wine retail stores.

This $1.7 billion retail operation could be auctioned off for somewhere between $1 billion and $2 billion.

Well, even a $2 billion plug leaves an equally large hole in the budget.

Meanwhile, the state would be killing the goose that last year pumped $513.7 million into state coffers, including $383 million in taxes and some $90 million in profits from the 625 state stores.

Then there's the indirect positive effect on the private sector economy, including $38.7 million it pays landlords for leases, $35.8 million in warehousing and transportation services and the $25.8 million in payroll.

The state liquor monopoly was a bad idea when it was set up in 1933 at the end of Prohibition. But we've been stuck with it and selling it now seems like an even worse idea because we'd be losing money in the long run.

There were proposals to sell the system in the 1970s, 1980s and 1990s. All failed because they didn't make economic sense.

Proponents of privatization say selling off the state stores would give individuals a chance to start up a small business and grow it.

But in this economy, only those who are already sitting on piles of cash are going to be able to afford to buy stores from the state.

It would be a one-shot infusion of cash that won't solve the deficit, but instead would get rid of a system that pumps hundreds of millions each year into the state and local economies.

Selling the state liquor stores would be a futile struggle.

Contact John D. Forester Jr.: 610-371-5010 or jforester@readingeagle.com.

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