Corbett Pitches Liquor Privatization
Pittsburgh — Tom Corbett unveiled his plan Wednesday to privatize the state’s liquor stores, one of the most ambitious attempts by a Pa. Governor in decades.
“I am proposing that Pennsylvania join the ranks of 48 other states and once and for all get out of the business of selling wine and spirits,” he said. “I do not simply want to reduce it or to trim it a little here and a little there… we should not do it halfway.”
Flanked by Pa. House Majority Leader Mike Turzai – a longtime proponent of privatization – and a dozen other Republican state Reps., Corbett laid out the details.
Some of the main points:
- As the Guv said, it’s not a halfway plan. It’s a full privatization effort – dissolving the 600 state stores and auctioning off 1,200 licenses for the sale of liquor and wine.
- Other licenses, for beer and wine, won’t have a set number but will be granted based on whether the seller (including box stores, groceries, restaurants, bars, convenience stores, etc) met certain criteria.
- Current beer distributors can keep their current license, apply to sell wine, or participate in auctions for liquor licenses.
- Businesses that hire current Pa. liquor store employees would be eligible for a tax credit.
- The new, private stores and wholesalers would continue to use the current tax system.
- The entire program would phase in over 4 years.
Corbett appeared to be making a play mostly for Republican support – or at least to give his party political cover. The proposal almost certainly will define the rightmost option in the forthcoming debate.
He has his work cut out for him. Turzai notwithstanding, several legislative leaders in his party – including House Speaker Sam Smith and Senate Pro Tempore Joe Scarnati – have expressed reluctance about privatization in recent days.
Both Smith and Scarnati suggested the current system is working and said they’d support more restrained reforms – ones that better guaranteed rural places like their home County of Jefferson maintains retailers.
Corbett’s key olive branch to Democrats (and potentially vulnerable Republicans): $1 billion in new funding for K-12 education. The grants would be funded by revenue from the license sales and taxes, and directed to a limited range of functions (most notably not regular budgetary needs, such as salaries).
But he can expect stiff resistance. Democratic lawmakers and allied groups lambasted the plan immediately – including Corbett’s estimates of increased revenue.
Sen. Jim Ferlo (D-Allegheny) is the ranking Democrat on the Pa. Senate Law & Justice Committee where any legislation will originate.
“We do not need to tear down a system that works, provides good paying, middle-class jobs, and generates essential revenue for the State as the Governor is proposing. We need to improve that system to the benefit of consumers while continuing to take advantage of the important resources and public health protections the system provides today,” he said.
Ferlo praised Scarnati, who earlier this week similarly called for tweaks to the current system.
Corbett said it wasn’t time for half-measures.
“We’ve been nipping and tucking away at this. This is time to go and do it,” he said.
Numerous polls have shown solid public support for privatization, including a survey commissioned by the Philadelphia Inquirer in October (55% supported, 28% opposed).