State lawmakers are debating whether to sell, or privatize, the state’s
liquor store system. What might that mean for you and other Pennsylvanians? In fiscal year 2009-10,
the current state-run liquor store system provided $397 million in total benefits to the Commonwealth
(excluding state and local sales taxes), which funded programs that serve you and your neighbors.
By adjusting variables associated with this proposal, the McCord Treasury’s Liquor System Revenue Calculator lets
you see for yourself how much revenue the state would need to receive from one-time sale proceeds, alcohol sales
and taxes in order to equal what the current system generates.
Some reports estimate that the sale of Pennsylvania’s liquor system may generate anywhere from $500 million to $2 billion.
Treasury has not placed a value on the system, nor does it endorse any of the estimates that have been published.
allows you to decide how much money from sale proceeds the Commonwealth could retain for long-term
investments to generate annual revenues (as opposed to being spent by the state to pay current expenses).
The default annual rate of return is set at 4%, a reasonable assumption in today’s financial environment
for a highly safe investment that is expected to provide reliable income to the Commonwealth each year. The Calculator
allows you to change this default rate depending upon how conservative – or optimistic – you believe the initial
assumption to be. The Calculator
does not calculate compounded earnings, assuming that any gains realized will be
spent annually by the Commonwealth rather than reinvested over the long-term.
default values represent approximate purchases, in gallons, for FY 2009-10
because the Pennsylvania Liquor Control Board reports in terms of units of alcohol – not volumes – sold.
As a result, the Calculator’s
default values were based on a conversion from actual units sold to volumetric sales.
enables you to adjust future sales as a percentage of the default figures,
while maintaining the wine to liquor sales ratio.
default is set at $397 million, the total benefit Pennsylvania realized from the transfer of liquor taxes
and Pennsylvania Liquor Control Board profits to the Treasury, as well as from operational transfers to other state agencies,
in Fiscal Year 2009-10. This figure does not include some nominal transfers to other state agencies, or regular state
and local sales taxes collected on wine and liquor purchases that generated another $112 million.