House privatization vote threat to liquor monopoly
HARRISBURG - A groundbreaking vote in the House this week that approved a bill privatizing the state-run liquor system poses the greatest threat yet to the long-running experiment of a Pennsylvania governor who vowed to forever prohibit the "open saloon".
Republican Gov. Gifford Pinchot created the network of state-run liquor stores overseen by the Liquor Control Board as national prohibition came to an end in 1933.
Eighty years later, Republican Gov. Tom Corbett has now come the closest of any modern governor to dismantling Pinchot's legacy with a liquor privatization bill passing one of the two legislative chambers.
The House vote, reflecting a mostly united GOP majority and solid opposition from Democratic lawmakers, provides some badly needed political juice to Corbett on one of his top priorities. Lawmakers representing Northeast Pennsylvania split along party lines on the vote.
The vote gives some momentum to Corbett's agenda of scaling back the reach of state government through privatizing the liquor stores, management of the Pennsylvania Lottery, traveler information systems and bridge projects.
The House-approved bill would create 1,200 private wine and spirits retail licenses over four years and allow grocery stores and convenience stores to sell beer and wine. It gives beer distributors first refusal on bidding for those 1,200 licenses for up to one year. These licenses would be allocated by county, based on the number of beer distributors in each.
Corbett wants to use liquor sale proceeds to establish a four-year block grant program for school districts, but that issue will be addressed in separate legislation.
As heady as the House victory is for liquor privatization proponents, there is still a long way to go before their goal becomes a reality.
The bill goes to the Senate where it faces committee hearings and deliberations during the next two months, said Majority Leader Dominic Pileggi, R-9, Chester.
"I don't think anyone expects the Senate to simply take up the House bill and move it to the governor's desk as is," said Pileggi.
House Majority Leader Mike Turzai, R-28, Pittsburgh, said the goal is to get a bill to the governor's desk by June 30. He said he thinks the House-approved bill will have public opinion on its side.
"I think it meets what the public is looking for," said Turzai. An agreement may depend on how well the differing concepts of liquor modernization and privatization can be blended into one bill.
A number of senators of both parties have co-sponsored bills to modernize the state-run stores through such steps as allowing more stores, removing the cap on stores open on Sundays and allowing beer distributors, restaurants and taverns to sell beer in different quantities.
Sens. John Blake, D-22, Archbald, and John Yudichak, D-14, Nanticoke, both favor the modernization approach and have co-sponsored bills to that effect.
Blake said he has deep concerns about how the transition from state stores to private stores is handled under the House bill.
Yudichak is worried about the fate of state store employees and employees in beer distributors and licensed establishments.
"You are talking about the thousands of people who will have their livelihood impaired and lose their jobs all for the sake of ideology," he said.
But a modernization amendment to allow for increased state store hours and wine-to-go restaurant licenses was shot down 108-91 in the House. The House debate carried echoes of the debate nearly a decade ago on legalizing slots casinos. Supporters talked of meeting consumer demands and stopping the bleed of liquor sales across state borders. Opponents warned of social ills from increased access to alcohol to loss of state tax revenue.
The bill gives consumers what they want and beer distributors a renewed chance for entrepreneurial success, said Rep. Tarah Toohil, R-116, Butler Twp. "The state-run liquor store system is a costly, antiquated system which is a 1933 throwback to Prohibition," she said.
"We are not selling milk and eggs," said Rep. Eddie Day Pashinski, D-121, Wilkes-Barre. "We are selling a lethal product."
"Privatizing sounds nice, but in the end, the benefits go straight to the top of the corporate ladder," said Rep. Frank Farina, D-115, Jessup. "The same revenue which provided state funding instead will go to corporations whose main goal is the largest profit margin possible."
The bill will pave the way for a one-stop shop for alcohol purchases, said Rep. Jerry Knowles, R-124, Tamaqua.
"Under this plan, beer distributors get first dibs on licenses to sell all three types of alcohol: beer, liquor and wine," he said.
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