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 Inquirerin October (55% supported, 28% opposed).
In the latest poll conducted by Quinnipiac, Pa. voters are uneasy over Gov. Tom Corbett’s new transportation tax plan.
The plan, which would remove the cap on the oil franchise tax and could generate up to $2 billion in needed revenue for transit, is largely divided amongst Pa. voters, with 45 percent supporting the measure and 47 percent opposing it.
However, voters are concerned that eliminating the cap could place a tax burden on them, with 82 percent showing concern as opposed to only 18 percent who are not concerned.
Corbett’s plan is aimed at obtaining the necessary $2.5 billion for fixing damaged roads, bridges, as well as public transportation. While removing a tax cap doesn’t necessarily mean a raise in taxes, it’s clear that voters are concerned that additional taxes are on the way.
The poll was conducted from January 22-27, and surveyed 1,221 registered voters. There was a margin of error of +/- 2.8 percent.
“We could do so much better, and I think I bring a unique inside-outside perspective of having run a business, created jobs and also worked in government,” he said. But he won‘t run if “something convinces me that that is a fool‘s errand.”
Wolf, 63, presently owns and operates Wolf Industries, a building supplies wholesaler in York, Pa. He served as Revenue Secretary from 2006 to 2008 under Gov. Ed Rendell.
If he gets in, he’ll face one of his cabinet colleagues: former Department of Environmental Protection Secretary John Hanger, who announced in December. Cumberland County pastor Max Meyers is in the race, too.
State Treasurer Rob McCord and former Congressman Joe Sestak headline the long list of other possible candidates.
On the GOP side, Montgomery County Commissioner Bruce Castor has also floated a possible bid.
A series of bad poll numbers for Gov. Corbett – most recently today fromQuinnipiac – has enticed several prospective challengers to consider a run.
By a 30 point margin, Pennsylvania’s women voters say Tom Corbett does not deserve a second term in the Governor’s mansion. The massive gender gap is mirrored in his job approval numbers, too.
That’s according to the latest poll from the Quinnipiac University Polling Institute.
Overall 51% of respondents said he does not deserve to be re-elected compared to 31% who said he does. Men went against him by 10 points, 48% to 38%, while women oppose a second Corbett term by 30 points 54% to 24% (total gender gap: 20 points).
Other crosstabs don’t offer much comfort. Independents sided against the Gov. 51% to 31% and Democrats 68% to 17%. Not even a majority of Republicans said yes. They’d re-elect him 49% to 29%. He loses that question among every demographic and regional category.
Voters disapprove of the job he’s doing as Governor 42% to 36%, an 8 point slide from Quinnipiac’s November 15 poll. While men approve 41% to 37%, women disapprove 45% to 31% (total gender gap: 18 points).
“It’s halftime in Gov. Tom Corbett’s first term and if he were running a football team instead of a state, he’d fire his offensive coordinator,” said Tim Malloy, assistant director of the Quinnipiac University Polling Institute.
“Gov. Corbett has hit the 50 percent approval rating only once so far, mainly because of his bad grades from women.”
Aside a few bright spots related to his disaster recovery efforts in 2011, Corbett has consistently suffered a big deficit with women voters. Efforts to soften his image have apparently not been successful.
Quinnipiac surveyed 1,221 registered Pa. voters from Jan. 22 to 27 using live interviewers calling landlines. The margin of error is plus or minus 2.8%. Polls that use registration numbers rather than algorithms based on likely voters tend to favor Democrats by a few points and disadvantage Republicans.
Penn State
Perhaps the most interesting single topic of the 2014 gubernatorial race will be the Penn State scandal. It has the potential to be an X-factor that works outside normal political lines.
If it does become a salient issue in the campaign, Corbett has catching up to do. Voters disapprove his handling of the situation – first as Pa. Attorney General then as Governor – by a 50% to 26% margin (with no significant gender gap). It’s worse in households where someone attends or has graduated from Penn State. Those voters disapprove 59% to 23%.
The Governor’s lawsuit is marginally popular, 41% to 37%, driven largely by the fact that 53% of voters said the NCAA’s sanctions on Penn State were too severe. 28% said the penalties were appropriate in light of the Jerry Sandusky child sex abuse scandal.
Miscellaneous
Both Pa. U.S. Senators are in tepidly positive territory, according to the poll. Voters approve Sen. Bob Casey 44% to 36% and Sen. Pat Toomey 43% to 25%.
The state legislature gets negative marks: voters disapprove of its job performance by 13 points, 46% to 33%.
Patrick Murphy is a veteran and former Congressman, but he won’t be a candidate for Governor in 2014.
The Bucks County Democrat dismissed rumors that have circulated recently in some Pa. Democratic circles.
It’s “absolutely not happening,” he said.
Murphy represented the 8th district in Congress from 2007 to 2011 and ran for Pa. Attorney General last year. He served in Iraq from 2003-2004 as a JAG Corps attorney with the U.S. 82nd Airborne Division.
Only two Democrats – former Dep’t. Of Environmental Protection Scretary John Hanger and Cumberland County pastor Max Meyers – have officially announced a bid against Gov. Tom Corbett.
Several others are officially or at least rumored to be considering a run, including Pa. Treasurer Rob McCord, former Congressman Joe Sestak, Former Congresswoman Kathy Dahlkemper, State Sens. Tim Solobay and Mike Stack, Allentown Mayor Ed Pawolski, businessmen Tom Knox and Tom Wolf and Congresswoman Allyson Schwartz.
Republican Montgomery County Commissioner Bruce Castor has also been floating his name.
Governing Magazine has listed newly elected PA Attorney General Kathleen Kane as a State Official to Watch.
The magazine cites Kane’s historic and successful election, as well as her strong career as a prosecutor and the criticism of Tom Corbett’s handling of the Sandusky case, as reasons for recognition.
From the piece
“In 2012, Kane became the first woman in state history to be elected attorney general, as well as the first Democrat. A graduate of the University of Scranton and Temple University Law School, Kane was a prosecutor in Lackawanna County, Pa., chairing the county’s first insurance fraud task force and working on cases involving white-collar criminals, senior citizens and child abuse. Her experience in child abuse prosecutions lent credibility to her campaign for attorney general, which she began as an underdog against former U.S. Rep. Patrick Murphy in the Democratic primary. As a candidate, Kane criticized former AG and GOP Gov. Tom Corbett for his handling of the three-year investigation into Penn State football coach Jerry Sandusky. Corbett has been criticized for the slow pace of the investigation into Sandusky, who would later be convicted of repeated child sexual assaults. In the general election, Kane ended up with 56 percent of the vote, outpolling Obama, U.S. Sen. Bob Casey and every other statewide elected official. Her focus on Sandusky and Corbett could prove to be pivotal in the 2014 gubernatorial election.”
Kane has no plans to run in 2014, as her focus has been on the desire to finish out her term. However, the folks at Governing Magazine aren’t the only ones who recognize her potential. Her name was generating buzz for Corbett’s seat even before she was elected.
Six weeks after publicly expressing an interest in bid for Governor, Montgomery County Commissioner Bruce Castor is looking to raise his profile. He sat down with Francine Schertzer of PCN to discuss a possible primary challenge to Tom Corbett.
“I’m considering it more and more,” he said. “When I first started thinking about this after the fall election and made some tentative announcements early in December, I was more like sticking my toe in the water. Now, I’d say it’s more like up to the ankles as some things have developed.”
One of those things is Corbett’s declining popularity. For most of the past year, the Governor’s job approval has been in negative territory.
Castor would have an uphill climb. A recent survey from Public Policy Polling showed Corbett ahead of Castor 51 percent to 11 percent in a hypothetical matchup. Ten years removed from a statewide campaign (he lost to Corbett in the 2004 Attorney General primary), Castor suffers from a name ID deficit.
But the same poll found only 45 percent of Republicans in support of the Governor as their 2014 nominee. 37 percent said they would like to see someone else.
In the PCN interview, Castor stated that he is interested in becoming that “someone else.”
Castor said he sees himself as a credible alternative to the incumbent should the Governor’s popularity ratings continue to drop.
He made the case that Corbett is a general election liability for Republicans despite deferring on some conservative acumen.
“The Governor has expended his political capital, but not on the things that we cared about, at least the things he campaigned on like pension reform, property tax reform, taking on public sector unions, the right to work, [and] paycheck protection,” Castor said.
Castor acknowledged the difficulties inherent in challenging Corbett. He said that the party organization will most likely favor the incumbent Governor — “as it should.” He also noted that garnering support and funds will require exceptional effort.
“A roll of the dice” one would-be wit called it. Others have described it in considerably less family friendly terms. But, however, described, it’s described a lot. Indeed, it’s been widely reported nationally as well as across Pennsylvania.
The Corbett administration intends to turn management of the Pennsylvania lottery over to the British firm, Camelot Global Services. “Privatization” of the operation of the state lottery is about to become a fact, subject to legal reviews by the attorney general, the state treasurer and a court challenge by AFSCME, the union representing lottery employees.
Not surprisingly, turning the lottery over to a British firm has been controversial. Supporters of Corbett’s plan cite the money it will save, the expected profits it will return and the efficiencies it will produce. Opponents bewail the Pennsylvania jobs that will be lost, the lack of transparency that characterized the awarding of the contract and the possible illegality of the management change.
Both supporters and opponents, however, seem to be missing the real issue. In debating the fine points of the deal, they are playing Nero, fiddling while Rome burns. The point both sides miss so completely is that neither the lottery as it exists, nor Corbett’s proposed plans, are really good ideas.
Privatization never worked as well as its proponents argued. Outsourcing and downsizing bring as many problems as they solve. In fact, if we are ever to solve the modern problems of fiscal solvency, massive infrastructure needs, and unprecedented challenges to education, we won’t do it by zombie like application of yesterday’s techniques to today’s problems.
It’s a cliche, but a good one–we must begin to think outside the box. And one way to do that is to solve problems in government as they are solved outside government– not inflexibly or bureaucratically, but with imagination and creativity. To the point: government and government created entries must become entrepreneurs.
As it turns out, Camelot Global Services, now only a few short steps from managing the Pennsylvania lottery, offers us a virtual blue print for doing just that. Camelot is a British company, which operates Britain’s national lottery and advises lottery operations in Illinois and California.
All of this is well known. Not so well known is the ownership of Camelot. They are owned by (we are not making this up) the Ontario Teachers’ Pension fund, the largest plan of its kind in Canada with assets of 117 billion. Perhaps even more interesting, the Ontario Pension fund has numerous similar investments, owning similar corporate entities around the world.
So, while here in Pennsylvania, we are worrying about the unfunded liabilities of our own “teachers’ pension plan” (as well as our own state employees plan), Canadian entities are making a healthy buck selling services to our own state lottery.
Not a bad gig. Pennsylvania sends lottery profits to a British company, one owned by a Canadian pension fund, while we lose some unknown number of Pennsylvania jobs in the process. Meanwhile, legal issues may keep the whole thing in legal limbo for months if not years.
The winner in this one isn’t hard to locate. Hint: it’s not us. That great “socialist colossus” to our north is knocking our socks off when it comes to playing the Capitalist game.
But it doesn’t need to end this way – and it won’t if we begin to apply entrepreneurial principles to our policy challenges.
With respect to the Pennsylvania lottery and our aspirations to increase its revenue, a simple expedient might enable our two embattled pension funds (SERS and PSERS) to play the same role as the Ontario pension fund.
Jointly or together, they might spin off a new company, whose board would consist of representatives of the two pension funds and the union. The profits would go to the two pension funds to help retire the 41billion in pension debt. The expanded revenues would increase monies for senior citizens programs. And Pennsylvania could save the jobs slated to be lost as well as including the employees to be part of the decision-making process itself.
It sounds simple. But carrying it off would require some negotiation, more than a little give and take on both sides of the issue, some good will and more than a modicum of commonsensical old time Yankee ingenuity.
But what promise and what potential if this kind of thinking took hold in state government–literally getting all stakeholders invested in a major governmental reform, thinking pragmatically to a win-win solution that benefits citizens, taxpayers and government workers alike.
That’s not what we have done so far. But there is still time, not just for the Lottery but for the phalanx of problems Pennsylvania must solve in coming years.
We are not going to bring Pennsylvania into the 21st century using the tools and techniques of the 20th. The problems confronting us are massive, multiple and sometimes overwhelming. But we can solve them if we move away from rigid ideological thinking on the one hand –and trite and tired cookie cutter approaches on the other. We must begin to think outside the box–and the lottery is a good place to begin.
Facing one of his biggest challenges yet as Governor, Tom Corbett has elected a pragmatic rather than partisan approach to transportation funding. The Associated Press reports that Corbett will unveil his long awaited plan next week.
At its core: a $2 billion increase in the taxes paid by gas stations. Corbett supports lifting a cap on the oil company franchise tax, meaning the wholesale cost of gasoline will go up.
The AP cited two sources familiar with the plan and Corbett has yet to officially confirm any details.
Lifting the cap was the primary funding mechanism proposed by Corbett’s transportation commission in 2011.
If and when he does, he may emphasize the fact that he is removing a cap on the taxes. But the reality is that it effectively will be a tax increase – and potentially a stark departure from his campaign’s no-tax pledge.
Corbett’s decision to take the lead on the matter will give political cover to GOP members of the state legislature. That’s important because any tax increase will be a tough sell to the Republican base.
Conservative activist Bob Guzzardi has spoken favorably of a potential primary challenge to Corbett by Montgomery County Commissioner Bruce Castor. He lambasted the news Thursday in an email.
“PA already has one of the highest liquid fuels tax rates in the country. If Corbett succeeds with his scheme, $4-per-gallon gas could well be on its way!” he wrote. “The Governor has plenty of options at his disposal to fix roads and bridges without reaching into our pockets, such as Public-Private Partnerships, selling the liquor stores, cutting wasteful spending such as the bailout of Big Hollywood, clipping the wings of the costliest legislature in the world, which makes 10 times the salary of lawmakers in Texas, abolishing prevailing wage, and more.”
But many policy analysts have disputed the proposition that Pa.’s aging transportation infrastructure could be improved with less than a significant investment – and corresponding tax increase.
It’s also a plan that stands a strong chance of attracting Democratic support (though their gubernatorial candidate may just as easily campaign against the move in 2014).
Jon Geeting is a liberal commentator with the site Keystone Politics. He had rare, kind words for Corbett.
“This seems like a trial balloon to get a preview of how bad the backlash will be from various corners, so for what it’s worth let me register my approval of the idea.”
Only two weeks into the New Year, Governor Tom Corbett has exclusively appeared on numerous Pa. TV news and radio stations, engaging potential voters and actively defending his term, NCAA suit, and laying out political strategy for 2013.
It’s a shift for Corbett, who has been criticized (even by Republicans) for not doing enough to advocate for himself and his policies.
The common refrain: he’s not a good salesman. And many attribute his low approval ratings (38 percent positive, 52 percent negative inthe latest PPP poll).
He’s making an effort to change that. He’s done roughly two dozen sit down interviews so far in 2013. Those follow three group sit down interviews between Corbett and theentire Capitol press corps in late 2012.
One-on-one interviews have facilitated Corbett’s effort to connect with Pennsylvanians who get their news from television and radio. In interviews with ABC16, WMFZ, Pittsburgh’s KDKA Radio, andRadio Smart Talkamong others, Corbett spoke out about his decision to sue the NCAA, an action he defended as something that will benefit the entire state.
Spokesman Kevin Harley disputed the premise that the Governor has not been an active salesman, noting that he conducted 160, “media events, news conferences, speeches or other events where the media is invited and he takes and answers their questions.”
“By comparison, in Rendell’s second year he held 134 such media events,” he said. That’s on top of 163 one on one interviews, Harley said, and thousands of press releases and social media updates.
But there’s a difference so far in 2013: Corbett’s not just giving interviews, he is seeking them out. Several of the reporters who sat down with the Governor recently told PoliticsPA that his office reached out to schedule them. And they’re happening at a faster pace.
It’s no secret why. While the majority of Corbett’s interviews have delved into the pending lawsuit, they have helped humanize the Governor, too. In an a second segment byCBS21, for example, he spoke about personal topics like his family, his dogs, the Pennsylvania Farm Show, and New Year’s resolutions (lose weight).
In segments withABC27, CBS21, FOX43, Corbett emphasized his time in office as a time of job growth and balanced budgets.
In addition, the Governor commented on the need to privatize the lottery, addressed his support for Marcellus shale development and alluded to his intent to improve transportation and pension plans in the coming year.
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