PMA Bulletin -- February 6, 2013

Governor’s Education Initiative Key to Privatizing Liquor Business in Pennsylvania

Last week, Governor Tom Corbett demolished any lingering excuse for why, 80 years after the end of prohibition, Pennsylvania is still in the liquor business.  The Governor is proposing that the money generated from the breakup and sale of the Liquor Control Board (LCB) monopoly go towards basic education programs; including science, technology, engineering and mathematics (STEM) initiatives, a move that businesses, particularly manufacturers, passionately endorse. Increasing STEM funding was a vital point in the Governor’s Manufacturing Advisory Council report because the programs would make the Pennsylvania workforce more competitive.

“We have a tremendous opportunity to boost the skills our economy requires without raising taxes,” said David N. Taylor, Executive Director of the Pennsylvania Manufacturers’ Association. “The Governor’s plan is clever, insightful, and urgently needed.”

Under the proposed plan, Pennsylvania will join 48 states in the post-Prohibition era and allow the market, not the state, to determine the price and selection of spirits, wine, and beer. The estimated $1 billion raised over four years from the sale of the stores will fund ‘Passport for Learning Block Grant’, a new education program that includes the STEM initiatives.

The ‘Passport for Learning Block Grant’ would be a four-year program that gives the schools flexibility in how to invest grant funding within four categories:

  • School safety – training for educators/administrators, enhanced security measures and partnerships with local law enforcement;
  • Ready by 3 – promoting enhanced achievement in reading and mathematics in K-3 programming;
  • Individualized learning – customized learning programs based on student proficiency and academic standards; and
  • STEM initiatives – enrichment of science, technology, engineering and mathematics in grades 6-12.

 “Our proposal is part of my commitment to changing Harrisburg, streamlining government, and moving Pennsylvania forward,” the Governor said in announcing the proposal. “Our plan gives consumers what they want by increasing choice and convenience, and helps to secure our future by adding $1 billion in funding toward the education of our children without raising taxes.” 

The STEM initiative can help reverse a heartbreaking statistic reported in November by the U.S. Bureau of Labor Statistics: Three million manufacturing jobs – high paying, family sustaining jobs – are available nationwide but manufacturers can’t find people to hire who have the skills to do the work.

“Yes, we need the skills training but in some cases, prospective employees don’t even have the rudimentary education necessary to get the skills.” said PMA’s Taylor. “Education reform continues to be a top priority for the business community, so all students receive a rigorous, challenging, and meaningful educational experience that prepares them for success in life, including success in the workplace.”

Taylor is a member of the Governor Corbett’s Manufacturing Advisory Council (GMAC), which unveiled its recommendations for a stronger manufacturing sector in August of 2012. One of the key recommendations:  a “highly skilled and educated” workforce.

Businesses in fact are so desperate to narrow the gap between available jobs and the training needed to perform them that, just in the last few weeks, the National Association of Manufacturers (NAM) announced the formation of a new coalition to boost STEM education. Simultaneously, the National Governor’s Association (NGA) published “Making” Our Future, which examines how key manufacturing states, including Pennsylvania, are preparing for the future.

NAM’s inSPIRE STEM USA, a coalition of businesses, education groups, and other national associations, is being formed to address the high-skilled jobs crisis and improve the U.S. STEM education system.

A NAM statement announcing the coalition said that innovation is the lifeblood of manufacturing, and it is critical that companies have the skilled workforce they need. Being a technologically advanced industry, manufacturing relies on skilled workers to lead and grow the U.S. economy.

“Manufacturing is a sleek, technology-focused industry that requires high-skilled workers to drive the innovation that has made us the world’s manufacturing leader,” said NAM President and CEO Jay Timmons.

In NGA’s “Making” Our Future, Pennsylvania along with California, Colorado, Connecticut, Illinois, Kansas, Massachusetts, and New York participated in an intensive, yearlong strategic planning process to support advanced manufacturing. Together, these states represent 30 percent of total manufacturing gross domestic product, one-third of U.S. manufacturing jobs and more than 25 percent of U.S. exports of manufactured goods.

“Manufacturing in the U.S. is changing,” Governor Corbett said in reference to the report. “It is important that governors continue to learn so they are able to determine the best way forward, ensuring good businesses and jobs for our citizens.”

The arguments to keep the LCB system are as old and tired as the system itself. Consumers don’t enjoy lower prices due to high volume purchases, and store location and product selection is limited. The LCB doesn’t even accomplish what it was originally charged to do. It was established after prohibition to prevent alcohol abuse by making the purchase of it as then Governor Gifford Pinchot said, "as inconvenient and expensive as possible.”

Quite frankly, it only got the “inconvenient and expensive” part right. The Commonwealth Foundation reports that a National Survey on Drug Use and Health ranked Pennsylvania in the middle of the pack or worse on rates of underage drinking and binge drinking.  And Mothers Against Drunk Driving has Pennsylvania 30th in DUI related accidents per capita with one being the best. Compare us to New Jersey, which has three times the number of liquor stores and one-third the number of alcohol related fatalities.

Section 207 of the Liquor Code reads: “To control the manufacture, possession, sale, consumption, importation, use, storage, transportation and delivery of liquor, alcohol and malt or brewed beverages in accordance with the provisions of this act, and to fix the wholesale and retail prices at which liquors and alcohol shall be sold at Pennsylvania Liquor Stores.”

There’s a country waiting for those who really believe the status quo is good public policy. But they’ll need a time machine to get there as the Soviet Union collapsed in 1991. 

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