Pennsylvania Newsmakers 8/25/13: Liquor Privatization Debate, and Government Reform Proposals

Just another WordPress site

Pennsylvania Newsmakers 8/25/13: Liquor Privatization Debate, and Government Reform Proposals

hi welcome to Pennsylvania newsmakers and as always thanks for watching well we’re going to have a little debate on what on this program we would debate liquor privatization no way no how but we’re going to have that debate and then one of the state’s leading reformers Tim Potts’s on we’ll find out what’s on mr Potts is mine all of that follows these words this is Pennsylvania newsmakers a fast paced unrehearsed weekly discussion with and about the leaders who shake your world and now here’s your host Terry Madonna I welcome back to the program while we run this series of programs on on the whole business of liquor privatization it’s not like it hasn’t been around for a while it’s try since governor Thornburg in the 1980s we’re going to have a little old-fashioned debate they’re going to smile during the debate we have joining me as Katrina Anderson she’s a director of governmental affairs with a Commonwealth foundation in Stephen herzenberg he’s the executive director of the Keystone Research Center I put your boxing gloves on okay here we go all right let’s let’s take a look at that Steve you’re against the privatization so I’m going to start now that i’m going to start with you here’s why here’s why she wants to change what now you want to change what we have now you want to keep OE if you want to change what we have already i got that right all right why should we change a liquor store operation that produces 500 million in revenue back to the state is pretty clean no scandal they’ve diversified the product sales make give us two reasons I want two reasons why we should diverse why we should privatize it i can give you many more than T Booker sure to I mean when we look at what consumers want they want to be able to buy their beer bread and Bordeaux one stop and that convenience matters so when I was having a conversation with one of my friends recently they said my one-year-old only allows me 30 minutes and a grocery store know that okay I got before I can’t you know when they’re they’re traveling with a child they can’t go to a beer distributor go to the wine store and then go to the grocery store that one stop convenience that we don’t have in Pennsylvania matters and they’re looking for that beyond that the government right now it has a conflict of interest being both the safety moderator and then advocating the cell and advertising and pushing and it’s not doing a good job so we can actually bring in more revenue provide the convenience the price and selection that consumers want through a private eye system all right now you get to defend the status quo now you’re going to say it you’re not defending the status quo tell me what give me two reasons give me the two little good um the first thing I want to say is why are we debating this issue yeah because it’s not the priority of pennsylvania’s they want to talk about jobs they want to talk about education so and actually the longer the push for privatization goes on the weaker support seems to get in the general public you know I think you when you ask the first question hit on an important point why are you trying to fix what’s not broken all right this is a solution in search of a problem the reality is that on the revenue side the current system is very successful for the Commonwealth it we just got numbers on the most successful financial year for the Pennsylvania Liquor Control Board ever 650 million dollars transferred to the general fund or paying for state programs or transferred to the Treasury when you look across the country there’s new rigorous research that shows that states that do what Pennsylvania does now have much more revenue from this industry than states that privatized two and a half times as much and then on when you look at the social side of privatization the public health community nationally has a consensus that retail privatization drives up consumption and abusive consumption of alcohol that has a whole array of social problems from traffic the tip 3 from traffic protection ok that’s ok that’s so yeah they give you so again so again our our our opposition to this is not because we’re against change we’d be okay with some modernisation but it’s it’s because I’m pragmatic grounds rather revenue and we don’t need social you get your you get a rebuttal go ahead thanks Terry I mean the system absolutely is broken and first when you talk about revenue of the LCB recently was bragging about making a profit why would argue it’s not that surprising that a monopoly would make a profit when it doesn’t have competition in the state but when you look at what it’s competing with other states you find out that residents are actually leaving

Pennsylvania to buy their liquor and bring it back in because they don’t like what we have here so when the LCB did their own study they found that in the Philadelphia area nearly forty five percent of the respondents said they go across the border to buy their liquor so that’s showing that there is something broken they’re not getting what they want I’m the reality is that under privatized system you’re going to get the same amount if not more revenue then you currently get now oh okay now look well let me because I’m a kind of a middle-of-the-road guy let’s why not a hybrid Steven why not a hybrid why not say we’ll take the wholesale part of it you know Virginia does this will keep the state and control the wholesale part but will privatize more of the retail aspects it oh is that a workable solution we’ve got um we’ve had modernization over the last 20 years this there’s a debate now about more modernization which is sort of moving the direction of a hybrid the reason you don’t want the hybrid you just talked about I mean that might be reasonable on the revenue side because because it’s the wholesale monopoly that is that’s critical to the state revenue but when you look at the social impacts those negative impacts result from retail privatization I mean that’s that’s that’s what the National Public Health task force concluded a couple of years ago so one thing I want to say here is the claim about revenue here is it is based on nothing I mean the Carmel foundation since the warm-up act for design for this proposal in 2010 has been claiming it’s a revenue winner to privatize it’s based on nothing and now the evidence that they’re wrong is stronger than that we’re going to run to a break Katrina is going to stay in her chair she’s coming up come out of her seat there is Bob we’re having a great discussion here we’ll be back good aerobic this broadcast of Pennsylvania newsmakers is presented by the Pennsylvania Chamber of business and industry the statewide voice of business and by the Pennsylvania business council Education Foundation educating citizens and business leaders about important public policy issues and civic affairs this broadcast of Pennsylvania newsmakers is brought to you by better safer roads calm to voice your support for safer highways and less traffic congestion visit better safer roads calm and by the Pennsylvania Manufacturers Association business in Pennsylvania is our business I welcome back to the program with Katrina Anderson and Stephen herzenberg we’re having a little debate here about privatizing alcohol Pennsylvania completely own state store operation wholesale and retail this is the fourth time governors have tried to change it since governor Thornburg attempted it in the 1980s all right now you’re still on your seat Katrina good respond to what Stephen said earlier first I want to get back to the safety issue because government control does not make us more more safe or more sober so right now Pennsylvania is one of only two states in the nation where we have a full government monopoly on wholesale retail but when you look at data from the Center for Disease Control you find out that Pennsylvania ranks middle of the pack on or higher on traffic fatalities related to alcohol alcohol accidents when you look at US department of health and human services were again higher than the national average on binge drinking underage drinking underage binge drinking this is consistent even through other studies that we find and one of the reasons is because the government should be involved in the safety side but not peddling the alcohol like we have now and to go to your other question about why not modernization well we’ve seen that continually when the LCB tries to modernize it doesn’t work so i point to the wine kiosk program where you had to use a breathalyzer and put your ID card and wine key haces and it would spit out just continually wine so on but continually it fails the consumers know they’ve been to other states what convenience they want and finally I’ll point to Washington state where people have often been watching to see what’s going to happen and now that it’s been over here sales have increased the state has seen an increase in revenue there’s been an anchor jobs and they’ve actually seen a decrease and accidents related two duis and so I was just the beginning you see that privatization is not this evil let me go to this other question I mean you know back to this theme that you know expand the sale of beer expand the sale of wine but keep the liquor operation in

place now maybe they regulated I’m back to my argument about a hybrid i’m using a little different set of arguments yeah i’m using a different set of arguments on the two of you but you know the liquor operation could remain lcb would grant these licenses and would regulate it so you still have the state control you tax it beer distributors you know sell change the mix of the way in which we sell beer that we’ve talked about endlessly on this program is that acceptable do you think to the folks who oppose it oppose the privatization again I’m a policy wonk so I’m it’s not really our role to say what’s going to satisfy this stakeholder or what’s a winning proposal in terms of getting a majority stakeholder coalition behind privatization what I’m telling you is on public policy grounds you know they’re there isn’t I don’t think if you care about money revenue for the state and if you care about social problems there’s not a lot of evidence for a hybrid I mean there is the research across different states I mean there is there is a possibility that if we mixed the current system with some what are called agency stores there are some states that get incrementally more money by having again a mix of state stores and agency stores so they can serve they can serve you know some underserved here is here’s the reason I’m bringing this up yep in practical terms and for our folks out there look we’ve got the house that passed the full privatization bill the Senate that’s not passed anything there we have before it you know a privatization bill that’s a little different but it’s begs at least this observer for a hybrid you get my politically I know you are in the sight of that go ahead I think it has to be said that the reality is that the liquor privatization bill was tied to the transportation bill with the budget season and they weren’t good dancing partners so we saw both bills it fall flat through the negotiations but the merits of privatizations itself are still strong I believe that the the three out of five pennsylvanians who continually show on poles that they support privatization they’re still out there they’re still contacting their legislature and it’s still an issue they’re hearing back home and the reason why full privatization is so important when you talk about the retail on the wholesale side the whole sell-side people don’t realize is actually where you get the selection that people want into the state that happens on wholesale and what we have right now is a very poorly run wholesale system so if you own a bar or a tavern you can get your beer delivered to you can get your food delivered to you but if you want to get your wine and spirits you have to go to a state store you have to order it pick it up and a lot of times they don’t have it in their store and it’s on you the small business owner to go back and pick it up later so the point is the current model we have right now isn’t even working for small business owners and we really need to modernize that and bring it into the 21st since you get the final word well so again I go back to what I said the very first thing I said which is why are we talking about this issue the current system does very well we think better than the alternatives in terms of revenue and social costs and it’s not a priority of Pennsylvanians people want jobs they want more education funding we should have got the transportation infrastructure proposal through because that means jobs as well as fixing our infrastructure so we need to stop wasting political capital long time on issues that are not really the people’s business it’s this is not what people care about okay look this was a wonderful discussion I think our viewers heard you know God got both sides of this issue which will be back before the legislature I think you both agree in one form or another this fall all right Tim Potts is in the house gee maybe we’ll talk about marijuana legislation should it be legal that these are thick Tim Tim pots also is I’m sure he’s going to want to talk about ethics reform and other things that he thinks will make the Pennsylvania Pennsylvania government better we’ll find out what he has to say when we return this broadcast of Pennsylvania newsmakers is brought to you by Pennsylvania credit union Association Pennsylvania credit unions where people are worth more than money to find a credit union that is right for you check out I belong Oh RG and by the Energy Association of Pennsylvania Pennsylvania’s energy information source this broadcast of Pennsylvania

newsmakers is presented by the hospital and health system association of Pennsylvania working towards a healthy Pennsylvania welcome back to the program are joining me as Tim pottsy’s been on the show many times he was formerly head of democracy rising he now chairs the majority party PA he’s one of the state’s leading reformers he’s one of those guys we get on when we want to get sort of the Reformers point of view about things that ought to change I you know we talked about this business of medical marijuana and I almost smile marijuana legislation which includes two components legalizing marijuana and medical marijuana and we sort of smile about it and I say well medical marijuana maybe legalization not in my lifetime but let’s talk about that little bit you have some thoughts about that medical marijuana I think has to happen there are too many people who suffer the ill effects of cancer and I remember my father when he had cancer 30 years ago wish that marijuana were legal because he had such problems with his chemotherapy sneaking it he was not it was a law-and-order guy you know it is that I know this can help me but I’m not going to do it and it was really gruesome and I think the more people have that kind of experience the more likely it’s going to happen yeah in the polls that I’ve seen and actually done seventy-five eighty percent of pennsylvanians support medical marijuana ilion prescribed by a physician all right add that exactly so we got it right sure that’s it’s good exactly right but recreational marijuana it’s still under fifty percent it’s edging the way up there and I think it’s going to get there primarily because i think the tobacco companies see an opportunity yeah when the public catches up to it they’ll be ready to go well let’s see there are two states i think that have legalized it now right washington and colorado right I tend to agree with you I mean I think it’s a tough slog in the legislature because there’s all you know maybe all sorts of other problems with it but medical marijuana I do think probably has some reasonable chance given given the fact that I that’s 12 or 13 states there’s a ton of states at tennis date kind of states it yeah that could now do it and the other thing is this is an issue that I think the younger generation is going to take over and you would say the same thing about gay marriage when you well exactly right i mean you see that change happening and part of the reason that we see the accelerated pace of change i think is the social media and the way people get information you know when you’re constantly all day long on your device getting information it’s easy to share ideas it’s easy to say you know what this recreational marijuana it’s no worse than alcohol you know you get all that discussion going on and as these as the younger generation starts taking over the body politic it’s going to change yeah I mean there’s still some I want to move on to education funding something I know you have a big interest in but you know there’s still some concerns about you know addiction and and it’s a gateways at a gateway drug and does it affect developmental learning I mean I I the medical marijuana thing I do think has some reasonable chance of passing but I’m the legalization of marijuana in a state fairly conservative so yeah we’ve been you’re not likely to occur medical marijuana will happen a lot faster than recreational marijuana but I think both are ultimately going to all right let’s talk about one of the things that that you’ve talked about you’ve been on lots of programs over the last couple of weeks talking about it we’ve done some programming on it which is the relationship between education funding and then jobs right and you would argue there’s a big correlation there well there is and I was listening to a program with a someone from the Chamber of Commerce someone from the Budget and Policy Center who are philosophically at odds but they agreed that the number one problem in Pennsylvania job creation today is finding employees with the right skill set and yet what you have is a billion dollars being taken out of the classrooms from two years ago this never been replaced and you have slashes in workforce development programs and then you wonder why we don’t have by our students don’t have the skills they need yeah we’re going to run to a break I want to I want to continue talking about this and then there’s two or three other issues we’re going through these pretty quickly to get some point of view that you know we seek a variety of points of view on this program or getting education funny I want to talk about some campaign financing and some other things that are at tim has been talking about we’ll do that after these words this broadcast of Pennsylvania newsmakers is presented by Highmark Blue Shield changing the way health plans work for business with a variety of plan options for employers and more choices for employees information is available at highmark com have a greater hand in your company’s out and by the Pennsylvania health care association the

future of long-term care I welcome back i’m talking with Tim pottsy’s one of the state’s leading reformers some it’s something you’ve been called a gadfly to have it yeah yeah you could call it a lot of different things all right after repeated some of which are repeatable right I want to talk about campaign finance laws I mean we have not arguably some of the weakest campaign finance laws summarize what exists now and what you think is reasonable Oh what exists now is something like the Old West where candidates can take any amount of money for any purpose as long as they disclose it and they can spend it on anything they want whether it’s related to a campaign or not it is just absolute anarchy and chaos no other state is as bad as we are across the board and you throw into that the that our public officials can take gifts of unlimited amounts from lobbyists which is something that eighty four percent of pennsylvania voters oppose they want a gift bin and now we do report him right yeah you have to report them but so what and you have this chief justice Castile also has this problem because he takes gifts all the time the American Bar Association says judges should not be taking gifts from anybody and so you have all of these forces outside of Pennsylvania that say these are bad ideas campaign finance you need to have strict limits you need to have better reporting so that citizens can track what who’s trying to influence their legislators you have to have a gift ban you know all these things and it’s you don’t see that happening it’s one of the problem of the point that I made and and you know I tend to keep my comments you know to a minimum on the program but i don’t mean i agree i think we need to both of those areas need a lot of work i think hopefully and i think most voters would agree in the public up suppose that the support for that is overwhelming my point about it is i don’t think it would affect the reelection ‘he’s i mean you would still have except for these moments after the pay hike and infamous legislative pay hike and some other events we’ve got 95 ninety-eight percent reelection rates historically right right would this affect the real actions oh I don’t think so at all but when you’re I learned this when I worked in the legislature when you’re talking about legislators too much is never enough so we went through the redistricting in 1990 and we had members who were in very safe districts where they were getting 6770 seventy-three percent of the vote they wanted 90 and they wanted nighty and you cut him back into a district that showed they only had sixty-five percent possible and they just went crazy because 6535 isn’t a wide enough margin no these these kinds of reforms in other states have certainly improved citizen confidence in government and have not affected reelection rates at all yeah that that that’s a good point look I want to thank you for coming in will have you back I mean well presumably will look and see if the legislature is likely to move on these I don’t see anything going on on these big issues but we will see hey talking about we will see we will see you next week for another edition of Pennsylvania newsmakers and as always stay well