Wednesday NewsClips

Former LCB Chief Comes Out In Favor Of Privatization
Former LCB Chair Throws Support Behind Privatization
Ex-LCB Chairman: Privatize
Ex-LCB Chief: Sell The State Stores
Editorial: Know Financial Implications In Liquor Privatization
Table Games Doing Well But
Slots Revenue Sets Record
PA Voters Turn Thumbs Down To Obama, Congress
Drunken Lawmaker Was Almost 4X Over Legal Limit
Editorial: Redistricting Should Be Free Of Politics
NE Lawmakers Assess Transportation Funding Proposals
House Transportation Committee Waiting For Corbett Green Light
Report: Copied Language In PA Legislation
Lehigh Valley Unemployment Rises To 8.7 Percent
Harrisburg Mayor Proposes Commuter Tax As Bargaining Chip
Harrisburg Mayor Releases Her Act 47 Plan
Fiscal Crisis Could Hurt Harrisburg Authority Project Financing
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Rep. Turzai: Former Chair Of Liquor Control Board Announces Support For Privatization

Former Liquor Control chairman Jonathan Newman Tuesday announced his support of privatizing the PLCB at a press conference with House Majority Leader Mike Turzai (R-Allegheny). 

            Rep. Turzai has sponsored legislation, House Bill 11 (not yet online), to privatize the wholesale and retail operations of the PLCB.

            “Jonathan Newman knows the PLCB inside and out,” Rep. Turzai said. “The fact that he favors privatization speaks volumes. Government has no business selling alcohol. We have crafted a bill that moves Pennsylvania out of the Prohibition era while at the same time strengthening enforcement of liquor laws. This is a proposal whose time has come.”

            “The current system is antiquated – all anyone has to do is drive across the border to any of our neighboring states to see how out of touch the PLCB system is,” Newman said. “I am intimately familiar with the history and operations of the PLCB, as well as with modern retailing practices. There is no doubt in my mind that due to the inherent problems with the system, there is a desperate need to privatize. Privatization will lead to greater convenience and better prices. It is time to stop burdening       Pennsylvanians with this backwater system that dates back to Prohibition.”

            The current monopoly system was created in 1933 by then-Gov. Gifford Pinchot, who said the PLCB’s mission was to make liquor sales “as inconvenient and expensive as possible.” Currently only two states, Pennsylvania and Utah, have complete control over wholesale and retail operations. 

            Under Rep. Turzai’s privatization proposal, the PLCB’s role will focus solely on regulation and education, removing the conflict of interest that currently exists by having the same entity promote and regulate alcohol sales.

            “House Bill 11 is a commonsense proposal,” said Rep. Tom Killion (R-Chester), a co-sponsor of the legislation. “This legislation responsibly moves Pennsylvania out of the alcohol business, while at the same time maintaining state revenues and ensuring greater enforcement of the Commonwealth’s liquor laws. Privatization would enable to the PLCB to focus its priorities solely on regulation and education.”

            “The PLCB is an archaic dinosaur that is sorely out of step with the times,” said Rep. Curt Schroder (R-Chester), also a co-sponsor of House Bill 11. “The opposition’s arguments against privatizing are nothing but an attempt to protect the status quo and continue on with business as usual in Harrisburg. The people of Pennsylvania have spoken. Numerous opinion polls have shown a majority of Pennsylvanians are in favor of privatizing the PLCB. It’s time to move Pennsylvania into the modern age.”

            Specifically, House Bill 11 proposal would:

--Eliminate the 18 percent Johnstown Flood tax and the 30 percent markup by the PLCB. 

-- Implement a fairer gallonage tax. 

-- Enhance enforcement of liquor laws by providing concurrent jurisdiction for state and local police; requiring retail managers and employees to attend Responsible Alcohol Management Program (RAMP) training; mandating the use of ID scanners with age verification software; requiring retail operations to be maintained in a separate area dedicated to the sale of liquor and all retail store employees to be at least 21 years old; and subjecting retail licensees to “age compliance checks” to ensure against selling to minors. Licensees who fail to adhere to these standards will face heavy penalties and possible suspension or revocation of their licenses. 

-- Offer current PLCB employees the following opportunities: hiring preference in other state jobs; tax credits for employers to hire them full-time; and education grants to help retrain employees to perform other jobs.

Poll: Casey Better, Toomey Same, Obama Down, Everyone To Blame For Debt Crisis

Democratic U.S. Senator Bob Casey's job approval rating increased slightly since June, but is still below the magic 50 percent mark incumbents aim for, according to a new Quinnipiac University poll released Tuesday.

            Voters polled approved of Casey’s job handling, 48-29 percent. In all regions of the state, a majority of voters polled approved of Casey’s job handling. He polled strongest in Allegheny County (51-26 percent) and in the southeast (50-21 percent).

            Republican U.S. Senator Pat Toomey’s approval rating didn’t budge much, with his approval rating at 44 percent, disapproval at 31 percent, and voters saying they didn’t know at 25 percent. The last Q-Poll in June had his approval at 45 percent, disapproval at 28 percent and 27 percent of voters saying they didn’t know.

            Over half those polled-- 52 percent-- didn't think President Obama should be reelected.  42 percent said he deserves another term.

            Of likely Republican candidates running against Obama, Romney scored highest at 44 to 42 percent with former PA U.S. Senator Rick Santorum losing to Obama by 43 to 45 percent (not as much as last time).

            Voters were evenly divided in Pennsylvania over who was at fault in the debt ceiling crisis-- Republicans and Democrats tied at 37 percent each.

            More detailed poll results are available online.

Tuesday NewsClips

Panel Shows How To Raise $2.7 Billion For Transportation
Drivers Could Pay For Road Improvements
Recommendations: More Costly To Get Around
Blog: July State Revenue About Same As Last Year
Editorial: Retool Law On Campaign Cash
New Way To Rate Teachers Studied
Debt Deal Backed By Nearly All PA Regs
Toomey Lone Local To Oppose Debt Bill
Western PA Unemployment Rate Rises
Erie Unemployment Rate Rises In Erie
NE Unemployment Highest Among State Metro Areas
Harrisburg Mayor Plans Hearing On Recovery Plan
Investigators Gather Information On Harrisburg Incinerator Debt
Editorial: Harrisburg Commuter Tax Takes Residents For Ride
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July State Revenue About The Same As Last Year

Pennsylvania collected $1.7 billion in General Fund revenue in July, the first month of the 2011-12 fiscal year, Secretary of Revenue Daniel Meuser reported Monday.
           Sales tax receipts totaled $743.8 million; personal income tax revenue was $663.9 million; and corporation tax revenue was $78 million for July.
           General Fund revenue figures for July included $66.3 million in inheritance tax and $27.7 million in realty transfer tax.
           Other General Fund revenue, including cigarette, malt beverage, liquor and table games taxes totaled $113.3 million for the month.
           Non-tax revenue totaled $27.1 million for the month.
           In addition to the General Fund collections, the Motor License Fund received $191.1 million for the month, which includes the commonly known gas and diesel taxes, as well as other license, fine and fee revenues.
           As in years past, July collection data does not include a comparison against anticipated amounts because revenue estimates for each month are not yet finalized. The August collections release will include comparisons of collections to estimates.

Auditor General Audit Finds Rampant PLCB Waste and Mismanagement

The Commonwealth Foundation strongly condemned the Pennsylvania Liquor Control Board today for systematic waste and abuse of taxpayer money and assets following a scathing Pa. Auditor General audit report that found rampant agency mismanagement of inventory and finances.
           Among the findings in the most recently released 48-page 2009-2010 audit, now quietly buried within the AG website without public comment or recommendations, AG investigators found:
The agency spent more than $66 million taxpayer dollars on the Enterprise Resource Planning system (ERP), a computerized inventory management tool that caused widespread shortages at PLCB distribution centers and cost two-and-a-half times the original plans. According to the report, "retail store managers began hoarding some merchandise items, leaving other retail stores without that merchandise. This exacerbated the existing inventory shortages at stores; items were out of stock and unavailable to customers."
           Compounding the problem, PLCB management then demanded purchasers order excessive inventory due to the shortages.  The report found, "In addition to acknowledging that it tried to buy itself out of the out-of-stock and hoarding situations, management also indicated that it could not change the volume of inventory coming into the distribution centers even though they were overflowing with excess product because vendors had already processed these orders."
           These decisions resulted in more inventory than space, a situation made worse by the fact that, despite already having excess, the PLCB couldn't stop the ERP system from ordering more.  Due to the mismanaged inventories, the PLCB then spent approximately $500,000 for trailer rentals and additional security guards.  According to investigators, "The trailers containing the merchandise were located off site and were in use for at least six weeks when our auditors uncovered the PLCB'S use of these non-temperature controlled trailers."
-- Scranton: Inventory more than doubled to 606,383 cases in 2010, causing additional warehouse space to be acquired.
Pittsburgh: Inventory jumped from 300,000 cases to 575,000 cases in 2010, exceeding storage capacity.  PLCB management decided to put 72,277 cases of excess merchandise in 57 non-temperature controlled trailers.
Philadelphia: Inventory reached 763,470 cases.  20,240 cases were moved to non-temperature controlled trailers.
           Moreover, investigators found PLCB management claimed storing excess inventory in non-temperature-controlled trailers, despite heat exceeding 100, did not put inventory at risk of spoilage.  Auditors found this to be false, observing, "merchandise stockpiled in the non-temperature controlled trailers such as wine and champagne actually was more susceptible to high heat." Contrary to the finding, the PLCB continues to deny widespread spoilage and an accurate account of money lost due to overheating remains unreported.
           Of the systemic problems, the audit went on to conclude, in part, that auditors, "received little response from management to demonstrate its follow up and resolution to ensure that store inventories are properly accounted for."
           "This fiasco is just the latest in a series of failures by the PLCB to be good stewards of taxpayer money, and clearly illustrates why legislators should be shouting 'last call' for government in the booze business," said Matthew J. Brouillette, Commonwealth Foundation president and CEO.  "It's unconscionable that Pennsylvania government continues to protect and promote a Prohibition-era monopoly so antiquated and inept that it has taken basic freedoms from consumers and robbed taxpayers and businesses of free-market benefits."
           The report comes just weeks after PLCB Chairman P.J. Stapleton III publically boasted about record-setting sales, but neglected to cite the AG audit that found that while overall sales have increased, net revenues from store operations have declined nearly 47 percent, from FY June 30, 2008 to FY June 30, 2010.  The PLCB release also failed to cite salaries, benefits and pension costs of more than $215 million last year or the millions spent each year to advertise and promote liquor sales.
           "In order to keep themselves in business, the PLCB is only giving taxpayers and consumers a glass-half-full spin, when in reality the glass is nearly empty," said Brouillette. "This proves once again that monopolies, whether public or private, fail to meet consumer and taxpayer needs."
           CF is calling for an immediate end to the PLCB's role as seller and distributor of wine and spirits, a system of full government control that now sees Pennsylvania as one of only two remaining states in the nation (the other is Utah) with such draconian measures.
          "The people of Pennsylvania know this issue isn't about just about liquor and money, it's about freedom and ridding ourselves of government monopolies, manipulation and mediocrity," said Brouillette.  "It's time our leaders listen to the demands of their constituents who want government to butt out of the booze business."
          A copy of the Auditor General's report is available online.

Monday NewsClips

Scarnati: PA Senate's Top Leaders Finds The Middle Ground
Senate GOP's Moderating Influence Raises Hackles
Liquor Privatization Panel Can Get Lots Of Ideas
Lawmaker Says Privatization Would Limit Number Of Liquor Stores
Editorial: Reflexively Pro Liquor Privatization
When Would Voters Opt To Raise Their Own Taxes?
Commission Will Hand Governor Transportation Funding Ideas
Mortgage Program Was Eliminated In Corbett's Budget
High Takeout Rates Issue At PA Horse Tracks
Harrisburg City Leaders Try to Reach Consensus On Recovery Plan
Harrisburg Debt Crisis Q&A
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