Corbett on Liquor Stores: Good & Bad

Member Group : Lincoln Institute

By Jennifer Stefano

Last week, Governor Corbett announced his support to privatization of Pennsylvania’s 600 state-owned liquor stores. This policy is a strong victory for Pennsylvania families, businesses, and taxpayers.

Ever since our founders gathered in Philadelphia to declare our independence, we as a nation have debated what the proper role of government is. But nowhere in the discussions was the subject of state control of liquor sales.

We have seen time and time again that the private sector, not the public sector, is the best way to innovate, grow, and deliver outstanding customer service. Governments fail at the task of effectively running a business enterprise. Look no further than the numerous government-owned businesses failing to deliver on their promises.

Just today, the United States Postal Service announced that it must eliminate Saturday delivery because it can’t compete with its private counterparts, FedEx or UPS.

Amtrak, another government-owned monopoly, costs federal taxpayers hundreds of millions of dollars a year to operate. Simply, government control has stifled innovated.

Privatizing liquor stores will control the Pennsylvania economy at a time when we badly need growth. By eliminating 600 state-controlled stores, we will create 1,200 privately-owned stores. We will sell new licenses for taverns, restaurants and distributions. These actions will create thousands of new jobs in the Commonwealth. The unemployment rate in Pennsylvania is hovering around 8% and families are struggling in this very weak economic recovery. This policy change will create jobs when we so desperately need them.

But, Governor Corbett’s plan isn’t without flaws. His plan will generate almost $1 billion in revenue for the state over the next four years. Instead of using the funds to pay down state debt or put our state pension plan back on a sustainable path, Governor Corbett plans to allocate the money towards education.

This seems like a great idea. One of the primary roles of state government is to educate our children. We want our children to receive the best possible education to help them learn, grow and succeed in the future. However, over the last thirty years we’ve learned that simply throwing more money into our education system does not better educated our children.

Since 1983, spending for education has increased three times faster than increases in enrollment. We spend $13,000 per child every year in Pennsylvania. But what do we have to show for it? More consolidated bureaucracies and no improvements in test scores. In a recent national ranking, Pennsylvania schools earned a "C+" grade—an unacceptable grade.

As I’m sure is the case in your families, if my son came home with a "C+" we would engage in numerous reforms and changes to improve his grades. Sadly, we can’t say the same for our Pennsylvania lawmakers.

And yet, it seems like Governor Corbett understand this lesson. Just yesterday, he announced that he would not expand our broken, costly Medicaid system. He echoed President Obama’s words from 2009 saying, "Another way of putting it is, we can’t simply put more people into a broken system that doesn’t work …We cannot afford to expand a broken system."

Just like with Medicaid, we can’t afford to throw money into Pennsylvania’s broken education system without substantial reforms.

I am encouraged by the Governor’s desire to privatize liquor sales in Pennsylvania and start to restore Pennsylvania’s government to its proper size. However, I wish that Governor Corbett would prioritize reform to our education system before flooding a broken system with even more taxpayer dollars.

(Jennifer Stefano is Pennsylvania State Director of Americans for Prosperity. Her e-mail address is [email protected].)