Larger text
Smaller text
Pennsylvania House liquor vote could be game-changer
Brad Bumsted 
717-787-1405State Capitol Reporter
Pittsburgh Tribune-Review
Brad Bumsted is a state Capitol reporter for the Trib.
Contact Us | Video | RSS | Mobile
Daily Photo Galleries
By Brad Bumsted
Published: Saturday, February 16, 2013, 9:00 p.m.
Updated: Saturday, February 16, 2013
HARRISBURG
When you hear lawmakers say they want to “modernize” the state liquor system and provide some minimal expansion into private markets, what many are actually saying is they oppose the full privatization favored by Gov. Tom Corbett.
Some hard-core opponents will say flat out that they do oppose it. But many legislators don't want to say they are “against” selling the state stores because poll after poll shows it is enormously popular with the public.
Pennsylvania and Utah are the only states with state-controlled wholesale and retail operations.
The state store system is a vestige of Prohibition, when government still wanted to curb alcohol consumption.
House Majority Leader Mike Turzai, R-Bradford Woods, was tenacious in pushing a divestiture bill last year. Behind-the-scenes efforts to round up the needed votes fell short. It was not brought to a vote on the House floor.
This year, with the introduction of a Corbett-backed plan to shut down the state stores, auction 1,200 retail licenses, raise $1 billion and send that money to school districts as block grants, the political landscape might be different.
It now seems there is a decent chance to get Corbett's legislation through the Republican-controlled House.
House Liquor Control Committee Chairman John Taylor, R-Philadelphia — who at best was lukewarm on privatization last year — appeared at two recent Corbett events on liquor. Taylor is committed to reporting out a bill that can win House and Senate approval, a House GOP spokesman said.
It might not look exactly like Corbett's plan. This is a far cry from saying House approval is in the bag. But it is looking up for privatization proponents. Having a governor out front makes a difference.
The real obstacle is the Senate, where some Senate Republican leaders like the idea of “modernizing” the LCB while moving very gradually toward divestiture. A “hybrid” plan is getting some attention. It keeps the LCB and dabbles in privatization by allowing limited wine and spirits licenses at facilities already licensed by the LCB.
The Senate looks like unfriendly territory for liquor privatization. Corbett has some GOP supporters. But leadership controls the flow of legislation. If, however, the House approves a liquor divestiture plan, it will be a very big deal that would change the dynamic in the Senate.
The Republican-controlled Senate would be almost obligated to give a bill, backed by the governor and approved by the House, a shot.
Senate leaders have said they will consider anything sent by the House. (Translation: We're not doing it first.) The idea of “modernizing” until privatization occurs might be worthy of debate as a Plan B. After all, it's been three decades that Republican governors have been trying to sell the state stores.
Continuing to improve the state stores would only have the effect of putting off privatization. But it's starting to feel like state stores might finally be on the way out.
Brad Bumsted is the state Capitol reporter for Trib Total Media (717-787-1405 or bbumsted@tribweb.com).
Most-Read Stories
- Pitt gets commits from QB, local RB
- Penguins notebook: Pens talking with Dupuis’ reps
- Steelers rookie safety Thomas learning from Polamalu, Clark
- Pirates announce signing of first-round pick McGuire
- Pirates notebook: Beanballs escalate tension against Reds
- Pitt research facility dedicated in Hill District
- Andy Warhol Bridge to be covered in knitted blankets in August
- Unity Legion team off to fast start in league play
- So Many Questions: Hair stylist to the stars Anthony Pazos says divas come with the territory
- Van Sickle breaks through at West Penn Open
- New Alexandria’s Mannitto Golf Club has new owner
You must be signed in to add comments
To comment, click the Sign in or sign up at the very top of this page.
The $500 million annual tax revenue would, more or less, remain whether in state or private hands. There is some debate on how the state would replace the $103 million in annual net profit afforded by the LCB. Not much is said of the other $100 million given annually to private landlords, the state police, or various scholarship funds. But what is not even remotely guaranteed is the $1 billion windfall projected by the governor. Not even Sheetz is keen on paying the exorbitant license fees. Here are the last four states that privatized elements of their liquor sales. Iowa went private with retail operations of wine in 1985, and liquor in 1987. West Virginia privatized liquor retail operations in 1991. Both states earned less than $20 million each. Operational costs were greatly reduced, but the expected windfalls never materialized. In 1986, Iowa earned $71.6 million. In 1987 - $43.6 million. Sales tax revenue did not return to pre-privatization levels until 2004. They chose to retain wholesale operations, because they would have lost $60-70 million/year. http://www.pennlive.com/editorials/index.ssf/2010/12/dont_toast_yet_to_pa_liquor_st_1.html: http://voices.washingtonpost.com/virginiapolitics/2010/09/as_we_reported_this_weekend.html: In 2004, Maine earned $125 million for a 10 year lease of their wholesale operations, but since, has lost over $100 million due to revenue sharing with the wholesale distributor. http://www.mainebiz.biz/article/20110725/CURRENTEDITION/307259998: In 2011, we know that Washington’s liquor sales contributed $461 million to their general fund, roughly equal to our LCB. When they privatized in 2012, Washington only earned $150 million for wholesale rights, $30.8 million for their existing stores, and a new liquor/wine/beer license is only $166.00. They exploded from 300 to over 1,400 stores, many open until 2:00 AM. Unit sales only increased by 8%, which strongly suggests the state was adequately served by the original 300 outlets. Since 2011, the governor’s windfall estimate has been $1.6 billion. Today it is $1.0 billion. Ironically, the governor’s billion dollar number and the real market comparables are both deal killers. The core functions of government are to provide civil order, infrastructure, resource management, education, to name a few. All cost money. I think it is great that Pennsylvania has a revenue stream independent of my wallet.
Subscribe today! Click here for our subscription offers.
