After trying for two years – and gaining support from New York City Mayor Bloomberg (I) – New York Governor Paterson (D) had to think that there was a chance to get a soda tax pushed through the legislature. His proposal to add a penny per ounce tax to the cost of sodas was met with considerable resistance. The powerful soda lobby (who knew?) launched web sites and other PR campaigns to stop the tax. And eventually, they won. Gov. Paterson has now pulled the tax from his budget.
To make up the revenue (New York is facing a $9.2 billion hole), Paterson has another idea: put wine on the shelves of grocery stores.
I’m sure you folks in places like North Carolina and Maine where wine is available in grocery stores are scratching your heads. Let me see if I can explain it to you. In some states like Pennsylvania and New York (there are 17 states), there are ridiculously restrictive rules against selling wine in grocery (or in some states, convenience) stores. Instead, they are sold in state-controlled, union-run stores or small, strictly controlled mom and pop stores, that make choices about the types and brands of wine we can or can’t buy in these states, how much we will pay for them and when we can buy them. This limits what is available to the public. In New York, for example, state law allows 19,000 grocery stores to sell beer but limits wine and liquor sales to a mere 2,400 liquor stores.
Depending on who you are, there are three major arguments against allowing for the free market sale of wine…
One, you’re union and you’re going to tell me how these laws protect jobs. In some states, like Pennsylvania, the state runs the stores (this is not the case in New York). You only have to pop into a state store to see how many of these jobs would not be protected otherwise… there is practically zero consideration for customer service. It’s so bad that in PA, the state recently shelled out $173,000 for a contract to teach existing store employees how to not be surly to customers. But hey, gotta protect those jobs.
Two, you believe it would kill mom and pop stores. In states like New York, mom and pop stores are allowed to sell wine but grocery stores (which by this definition, must only be huge franchises) are banned from sales. It’s protectionary. But that begs the question: why just wine? Why not ban grocery stores from selling beer? Or candy? Or cigarettes? It makes no sense.
Three, you believe you’re protecting our children because clearly making wine available in a grocery store will increase under-age drinking. Apparently, only wine store employees can properly check for ID. This is actually the most popular reasons trotted out for not making wine more widely available. It’s both insulting and inaccurate. When I was in college, I worked at a grocery store (Winn-Dixie) and I can vouch for the fact that even then, you couldn’t sell wine or beer without scanning an ID or otherwise entering an override code. There is technology in place to protect our kids and I have a hard time believing that they can manage it in North Carolina but not in New York.
Nonetheless, these are the types of hurdles that Paterson faces in trying to get wine onto grocery store shelves. The move is estimated to add between $150 and $300 million to the state’s coffers.
New York winemakers are enthusiastic about the proposal. The state ranks 4th in domestic wine production (behind California, Washington and Oregon, all of which allow the sale of wine in grocery stores) but 11th in wine sales. The state also ranks behind less populous states such as North Carolina, Ohio and Michigan in sales. Winemakers and farmers attribute those statistics to the levels of state restrictions on sales, including the ban on selling wine in grocery stores.
Lawmakers must reach a consensus with Paterson on the budget by this weekend or face real consequences. The budget, which is already three months late, must be in place to avoid a government shutdown. A shutdown could happen as early as this Tuesday.Want more taxgirl goodness? Pick your poison: You can receive posts by email, follow me on twitter (@taxgirl) hang out with me on Facebook and check out my YouTube channel.