PLCB incompetence

But this year should be different. Whereas inflation understandably is the principal economic issue for everyone from President Joe Biden to the average Joe mournfully watching the numbers at the gas pump, the overheated economy also has pumped up the state government’s tax collections.

Through the end of May, the state had collected $43.9 billion for the fiscal year. That is $4.9 billion, or 12.5%, above the Department of Revenue’s estimate, with one month remaining in the fiscal year. According to the Independent Fiscal Office, the performance has been even better — $5.5 billion, or 14.3% above estimate. Collections have been strong in every major category, including the sales, personal income and corporate net income taxes.

Business interests have put on a full-court press for a corporate net income tax rate reduction and they likely will get one. The House, with a broadly bipartisan 195-8 vote, already has approved a reduction of more than 10%, from 9.99% to 8.99%. Gov. Tom Wolf, in his proposed budget, included a reduction of more than 30% by 2026, from 9.99% to 6.99%, with an incremental plan to get to 4.99%. The administration has said that would reduce taxes for about 95% of state businesses that pay the tax, but would increase tax payments for about 5% of businesses.

Wolf also proposed a record increase of $1.8 billion, or 21%, in public education funding. That would help districts such as Scranton, which have been shortchanged by inequitable distribution of state funding.

Though the Independent Fiscal Office projects a decline in state tax revenue in the next fiscal year, its most pessimistic estimate does not exceed the rate by which tax collections rose this year. The state can appropriate additional education funding this year without falling off the cliff next year.

The election-year surplus provides the raw material for a timely, comprehensive budget compromise between the departing Democratic governor and the Republican legislative majorities.

If you ever have wondered why wine lists at most Pennsylvania restaurants are not as extensive and varied as those at comparable restaurants in other states, look no further for the answer than to the Pennsylvania Liquor Control Board.

Restaurateurs in other states can look to any number of wine wholesalers or brokers who can get them what they want at substantial discounts. Those in Pennsylvania, in effect, have a single wholesaler, the state government itself, in the form of the PLCB, which might or might not get the restaurants what they want, when they want, at a piddling discount below retail.

The Legislature passed a law in 2016 allowing direct shipments of wine to restaurants, and requiring the PLCB to stop charging a preposterous $1.75 fee for every bottle of such “special order” wine.

But, behaving like the stateanointed monopoly that it is, the PLCB pretty much ignored the law. Two wine merchants sued and won. In a Commonwealth Court hearing, Judge Anne E. Covey asked: “How do we get the government to stop violating the law?”

The court found the PLCB liable for damages, interest and the plaintiffs’ legal fees, all of which probably will add up to $500,000.

But that involved just two wine merchants. The court also authorized a class action against the PLCB for the return the millions of dollars in handling fees that it continued to assess after the Legislature outlawed them. It rejected the agency’s argument that it was covered by sovereign immunity, a legal doctrine holding that the government can’t be sued for wrongdoing without its consent.

For Pennsylvanians, the PLCB problem isn’t sovereign immunity, but that there is no immunity from sovereign incompetence.