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Senator offers hybrid liquor control plan

| Tuesday, Feb. 12, 2013, 12:01 a.m.

HARRISBURG — An obscure Senate bill that keeps state liquor stores and allows limited privatization may emerge as a key alternative to Gov. Tom Corbett's privatization proposal, experts and lawmakers say.

The Republican governor is pushing for full-scale privatization of the state's wholesale and retail liquor business, and on Tuesday plans to tout education block grants that would be funded by $1 billion from the sale. Corbett would sell the 619 state stores and auction 1,200 private retail licenses.

But Sen. Charles McIlhinney, R-Bucks County, has gained the support of a powerful GOP senator for a bill he is drafting that would keep the stores but give hotels and restaurants more flexibility and allow beer distributors to sell beer in quantities less than a case of 24 bottles.

The two positions might represent a starting point for negotiation on the issue in the GOP-controlled Legislature, said G. Terry Madonna, a political science professor at Franklin & Marshall College in Lancaster.

“Governor Corbett drew a line in the sand for total privatization, full privatization,” Madonna said, noting that McIlhinney's bill could expand during negotiations to bring in more support. One item under consideration, for example, is whether to allow beer distributors to sell wine and spirits, McIlhinney's office said.

With considerable opposition among lawmakers to selling state stores, McIlhinney's bill or a similar bill could get serious consideration. House Speaker Sam Smith, R-Jefferson County, has said he foresees support for a hybrid plan.

Many lawmakers worry that full divestiture would place at risk 5,000 jobs, despite retraining and tax credits the governor offered under his plan.

McIlhinney wants to sell carry-out licenses for wine and spirits to restaurants and hotels, which may hold licenses to sell liquor or wine by the glass. The Senate's top Republican, Joe Scarnati of Jefferson County, is a co-sponsor of the bill.

Under McIlhinney's bill, the holder of a special license could sell bottles of liquor and wine for “consumption off premises ... in any quantity.” Chain stores would get one license for one location.

Nathan Benefield, a research analyst for the Commonwealth Foundation, which supports Corbett's plan, said the McIlhinney bill “is a half-measure and a far cry from giving consumers the convenience they really want.”

Wendell W. Young IV, president of United Food and Commercial Workers Local 1776, said he opposes both plans.

Young, whose union represents 3,500 state store clerks, could become the main antagonist against Corbett's plan.

But Young said he doesn't like McIlhinney's bill, which would eliminate the stores over a longer period of time. If a bill such as McIlhinney's passes, it would be “a matter of time” before the Legislature would allow beer and wine sales at all grocery stores and big-box retail stores, Young said. That would lead to a “cannibalization” of liquor store sales, he said, and state stores would gradually disappear.

McIlhinney said under his bill, “the market will dictate which stores close down.”

Corbett would allow big-box stores, grocery stores, pharmacies and other retailers to sell liquor.

Scarnati publicly plugged McIlhinney's bill two weeks ago, the day before Corbett announced his plan during his budget address.

“I am a privatization guy. I believe in it,” Scarnati said. “But it can't be one-size-fits-all across the state. I'm convinced whatever we do must be incremental over a period of time.”

House Majority Leader Mike Turzai, R-Bradford Woods, is spearheading House support for the governor's proposal, saying it provides “consumer convenience.”

“The people of Pennsylvania do not want the status quo. I think there's real momentum for the governor's proposal,” Turzai said.

McIlhinney's bill would keep the state's wholesale monopoly intact. McIlhinney said he is trying “not to dismantle the current system and leave certain portions of the industry out in the cold.”

Pennsylvania and Utah are the only states that control wholesale and retail sales of wine and liquor.

Brad Bumsted is state Capitol reporter for the Tribune-Review. He can be reached at 717-787-1405 and

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