It's hard to imagine how the current state liquor
distribution system could be made worse, but according to MIRS News, Gov.
Jennifer Granholm has discovered a way. She apparently wants to make this partial
monopoly into a complete one, selling the lucrative privilege to just one
Worse, the monopoly would be granted for 25 years in return
for a lump sum payment, all of which would be spent in less than one year to
avoid needed budget cuts.
In other words, Gov. Granholm and current legislators would
steal 25 years worth of license revenue from future taxpayers so that they can
slip out of town with a budget that ruffles a few less special interest
"Immoral" is not too strong a word for this. That goes for other recent examples of
Michigan's political class stealing from future citizens and taxpayers, as
described here and here.
By the way, the current state-controlled liquor distribution system
is a monstrosity. In 1997, then-Gov. John Engler and the Legislature botched an
attempted privatization of the previous state-owned system. The good news was
that several hundred state positions were eliminated, along with the growing
pension liabilities they accrued every year.
The bad news was that these were replaced by a
price-controlled oligopoly in which a handful of private distribution
companies (called "ADAs") were given exclusive licenses to distribute liquor to
the retail and hospitality industries.
This was good for the privileged members of that cartel, and
good for the politicians who collect rich campaign contributions from them, but
bad for consumers, bars, restaurants, the tourism industry and even the
Department of Treasury revenue division. Why the Treasury too? Because the lack
of competition generates higher prices and lower volumes than would otherwise
be the case (or alternatively, lower tax revenues than if the savings from a more
efficient system were taxed away).
Here's a better idea: Shut the entire
state-controlled system down and let the private sector handle this function,
with prices set by competition. Those concerned about the moral effects of
liquor consumption can still impact it through the very staightforward
mechanism of an excise tax.
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