False argument: Pennsylvania's liquor monopoly is no cash cow

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For the past decade, the revenue brought in through the state liquor stores has gone nowhere but up, and the 2012-13 fiscal year just ended was no exception. The sale of wine and spirits was worth $2.17 billion, a 4.5 percent increase over the previous year, which meant a $512 million infusion of cash to the state's general fund.

That's a lot of money, but don't credit the government monopoly for reaping all those dollars. Why not?

Because most of the cash would be pouring into the state even if the stores were owned by private merchants since it is generated by the taxes on each purchase.

Of the $512 million, $311 million came from state liquor taxes and $121 million were due to the state sales tax. The remaining $80 million that made its way from the state Liquor Control Board to the general fund was set by the governor's budget office and came out of agency profits.

Opponents to privatizing the state's liquor system claim that Pennsylvania will be selling off a cash cow if it gives up its retail and wholesale operations and it licenses private businesses to sell alcohol instead, but the numbers refute the claim.

Even if lawmakers decide to change the taxes on alcohol sales, they certainly won't eliminate them. As long as people keep buying alcohol -- and they will -- the state will continue to reap revenue from the taxes.

The sale of licenses for private liquor, wine and beer outlets would bring in additional sums, which should more than make up for the other financial contributions made by the LCB. In addition to the dollars transferred to the general fund in 2012-13, the agency sent $24 million to the Pennsylvania State Police, $2.6 million to the Department of Drug and Alcohol Programs and $4.4 million to local municipalities in licensing fees.

The argument that Pennsylvania cannot afford to sell off its liquor monopoly is a phony one, and the latest figures from the LCB prove it.


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