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Committee Amends, Advances Liquor Privatization Bill

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Like the plan Governor Tom Corbett outlined in January, the amended version of HB 790 would create 1,200 new private sector wine & spirits licenses.  The big change is that existing beer distributors would be given the right of first refusal. 

The amended bill would also allow state-run liquor stores to stay open until the number of privately-owned license equals twice the number of state stores in a particular county.  As soon as the total number of state stores falls below 100, all remaining outlets would be closed. 

A limited number of grocery stores would also be allowed to purchase special wine-only licenses under the amendment that ultimately cleared the House Liquor Control Committee. 

“This committee will deal with HB 790 today, after which it will go to the full House of Representatives for a debate and possible amendments, after which it will go to the Senate, after which it will probably come back to the House,” Chairman John Taylor (R-Philadelphia) said while emphasizing this is just the first step in a long legislative process. 

Democrats on the committee repeatedly called for public hearings and more time to analyze the bill during some two and a half hours of debate.  “I just think this is getting more confusing, instead of making it less confusing for our consumers,” said Minority Chairman Paul Costa (D-Allegheny).

Moments after the debate ended with a party-line vote of 14 – 10, Governor Tom Corbett released a statement calling it a “momentous first step.”  Corbett says he will continue to work with the General Assembly to end the state’s role as the sole wholesaler and retailer of wine & spirits.   

While the original Corbett plan would have potentially generated $1-billion dollars from the upfront sale of the wholesale and retail licenses, the amended bill is only expected to generate about $800-million.

Battle Lines Being Drawn Over Liquor Privatization

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The details of the plan may be new, but the arguments for and against liquor privatization are perennially similar.  “This is an agency that makes money, that continues to make more money every year,” UFCW Local 1776 President Wendell Young IV said while questioning the logic behind dismantling the state store system. 

The UFCW, which represents 3,500 employees at Pennsylvania’s wine & spirits shops, has been on the front lines of the privatization battle for years.  This time around, Young says the governor’s plan would not only jeopardize thousands of family-sustaining jobs, but it would drastically increase the number of alcohol outlets.  “If you think about what he proposed… you could wind up with 20 – 30,000 or more outlets in Pennsylvania selling wine or spirits.” 

As Senator Jim Ferlo (D-Allegheny) did on the Senate floor, Wednesday, Young likens the Corbett plan to the “Wild West” of alcohol sales.    

The expansion of alcohol outlets has some worried about the effects of increased consumption.  “There is a large body of research that shows a relationship between increases in consumption and a whole host of alcohol-related problems,” says Deb Beck, President of the Drug & Alcohol Service Providers Organization of Pennsylvania.  “I don’t think one needs a lot of research to get that.”

Beck says a little inconvenience is a small price to pay, noting that Pennsylvania already has unmet needs when it comes to drug & alcohol treatment programs. 

While it may not be enough to assuage the concerns of privatization critics, Governor Tom Corbett’s plan would address both issues: employees and increased outlets. 

The plan calls for tax credits for business that employ displaced Liquor Control Board employees, education and civil service credits, as well as a new committee to help affected workers find re-employment. 

As for the increased number of alcohol retailers, the governor’s plan tries to balance it with increased enforcement measures.  They include stiffer penalties for selling booze to underage or visibly drunk persons, a requirement that new alcohol retailers must use ID scanners and a 75% increase in funding for treatment programs.    

If Corbett succeeds it would leave Utah as the only state to maintain complete control over its liquor system – from distribution to retail.

Pennsylvania Liquor Store

House Won’t Revisit Liquor Store Debate until the Fall

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With the June 30th budget deadline fast approaching, House Majority Leader Mike Turzai (R-Allegheny) has decided to hold off on further liquor store privatization debate until the fall.  That gives Turzai the summer to build consensus around a privatization plan with the help of Governor Tom Corbett.

“Nobody in Pennsylvania has a better bully pulpit than the governor,” says Turzai spokesman Steve Miskin.  “We expect he’s going to use that and we’re going to get people to the table and get this thing done.  We’re closer now than we ever have been.”

House Democrats have been critical of Turzai’s privatization plans, and Rep. Dante Santoni (D-Berks) is pleased with today’s developments.  “It just didn’t make sense… I think the Majority Leader saw the error of his ways and pulled the bill,” says Santoni, the ranking Democrat on the House Liquor Control Committee.

Santoni supports modernization of the Pennsylvania Liquor Control Board (PLCB) over privatization.  That could include everything from expanded Sunday hours, to flexible pricing and the use of coupons & rewards programs.

But Miskin stresses that the privatization plan is still very much alive.  “We’re going to work on it and we’re going to continue working on it until it’s done; until the liquor stores are in private hands.”

Liquor Store Privatization Update

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Debate began Monday evening on the latest version of a plan to get state government out of the booze business.  Majority Leader Mike Turzai asked, “Why is Pennsylvania so anachronistic? Why is Pennsylvania not willing to focus on its citizens and consumers?” Turzai has been the leading voice on liquor store privatization.

His latest plan would replace the 620 state-run liquor stores with 1,600 private sector wine & spirits licenses.  Pennsylvania’s beer distributors would be given the right of first refusal at a fair market value.  The remaining licenses would be auctioned off to the highest bidder.

But Monday’s House debate was cut off after nearly three hours, and has not resumed since.  Democratic Leader Frank Dermody doesn’t think supporters have the votes.  “I don’t believe they’re there, and we’re working hard to make sure it stays that way,” Dermody explained to Radio PA by phone.  “Even if you’re for privatization, this is a terrible bill.”

While beer distributors would be given first crack at the new licenses under Turzai’s plan, the Malt Beverage Distributors Association of Pennsylvania opposes the language.  “Ultimately when you look at this bill, it’s just forcing your local beer distributor out of business to sell-out to a major corporation,” explains Mark Tanczos, president of the MBDA of PA.  Tanczos outlined his position in a letter to the General Assembly.

Governor Tom Corbett can be counted among the high-profile proponents of liquor store privatization.  Corbett recognizes this won’t be the final legislative product, but wants to get the ball rolling nonetheless.  “Let’s get this first step done,” Corbett emphasized to reporters this week.

House debate could resume as early as Monday.