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).
Having grown up in AZ and recently moved to PA, I’ve seen both sides of the state vs. private liquor sales, and living in SE PA, I can say I’ve seen the shades between. As somewhat of a connoisseur of beer and spirits, I like the DE/MD models the best.
In AZ/CA/NV, everyone and their brother can sell beer and spirits, which, while from a free market/consumer choice standpoint sounds most ideal, it means that Wal-Mart and Safeway squash the meaningful existence of liquor stores, ultimately limiting consumer choice. The liquor stores that do exist are incredibly expensive holes in the wall and don’t have much selection, either. It’s great if all you want is cheap Bud and Jose.
With the PA stores, one is limited to whatever the Liquor Control Board deems fit to sell, when they want to sell. In DE and MD, however, the liquor stores are open decent hours (I’m in favor of revoking blue laws), the selection FAR exceeds what’s available in either case.
In my opinion, the method of auctioning off the liquor licenses is going to cause a situation like AZ, as the highest bidders are going to be the lowest common denominators. I personally think the best option would be to require liquor stores to be separate, private entities, but that they may sell whenever they feel like it, simply paying liquor license fees and taxes. Think, if PA removed it’s blue law controls, maybe the Commonwealth could see some of that cross-border traffic heading INTO the state to purchase, rather than leaving the state!
My hope for the employees of the stores would be to help them resettle within the Commonwealth job openings, so as not to lose the good union jobs.
Our Governor has sent a signal to people on both sides of the aisle. From the peanut galler here….. Take the deal, fund the schools (albeit short term) and let’s get on to bigger stuff.
Let’s get creative on that end and wrap up being in the liquor business for starters….The Commonwealth has a chance to fund many things (could even rescind income taxes if it’s bold enough) over many years because of Natural Gas.
When you deduct the profits private employers are expecting to reap from this from what the State is already making, this doesn’t seem to me to be such a great idea. Where are the guarantees that private employers will supply the same level of benefits to their employees that current employees receive which inadverntently add to the economy of the State? Where in the Governors plan will the lost revenue from the profits of liquor sales that the State was solely collecting be replaced with? Taxes on private employer’s profits fall far short of getting full profits. Sales of licenses is a one shot deal, then where will the money for block grants to schools come from?
I am a progressive individual who often wants to vomit every time she hears the words “Corbett” and “privatize”. However, I am also a Jersey expat girl who has travelled around the country (funny story, I got introduced to Nebraska’s Third Stone Brown from buying their six pack at a gas station in Omaha, so this may be helpful to microbreweries).
Here are the liquor laws of all the surrounding states.
New York: Beer sold at beverage distributors, no matter what quantity, or any store that can pass as a grocery. liquor and wine sold at PRIVATIZED STORES
New Jersey: Beer, wine, and liquor sold at PRIVATIZED PACKAGE STORES; with a few far flung supermarkets selling such.
Delaware: Beer, wine, and liquor sold at PRIVATIZED PACKAGE STORES.
Maryland: Beer, wine, and liquor sold at PRIVATIZED PACKAGE STORES IN MOST COUNTIES
West Virginia: Beer, wine, and liquor sold at PRIVATIZED PACKAGE STORES, beer and wine sales at grocery stores.
Ohio: Beer, wine, and liquor sold at PRIVATIZED PACKAGE STORES, with beer, wine, and low alc spirits at grocery stores.
I am a progressive, I oppose piratization of our assets in general, but I am also a native Jersey girl (a totally privatized state in terms of booze retail), and I believe that the fact that Pennsylvania is the ONLY STATE other than Mormon Utah to control all sales of wine, and is the ONLY STATE to require a person to go to two different establishments to buy a six pack or case.
Have the people who have opposed saner liquor laws ever even been out of the state? Hell, jump on PATCO and you will find a lot of package stores with infinitely better selections of wine and liquor, as well as CHEAPER beer.
Maybe Democrats need to work on more issues that the working/middle/lower class can find consensus on instead of blocking our access to libations.
This is key test. If Republican Governor Corbett, elected with grassroots support, and the Republican House and Senate cannot defeat union opposition, then real worker freedom is unlikely to progress.
The Unions own the Democratic Party in Pennsylvania and have successfully infiltrated the Republican leadership.
Citizens Alliance lays out the obstacle. Union Republicans. The billion dollars could fund Vouchers for All to allow poorest kids in worst school districts (almost all black) to escape and to allow middle class parents real choice.
David I totally second your comment!
At this point, why are we not trying to recall him. If he wins re-election, I will eat my hat!
Well, Corbett is already “privatized” and working for his donors.
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