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Lawmaker proposals could undercut privatization

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Saturday, Feb. 2, 2013, 12:01 a.m.
 

While state lawmakers consider Gov. Tom Corbett's plan to privatize wine and liquor sales, at least eight members have introduced proposals to change Pennsylvania's alcohol laws.

Dozens of measures aim to “modernize” wine and liquor sales and change what liquor fees and taxes fund.

Debates over these measures might be meaningless if lawmakers agree to full-scale privatization, said Chris Borick, a political scientist at Muhlenberg College in Allentown.

“But if you get some of those reforms moving, maybe the case for privatization becomes less strong. It depends how much interest there is in pursuing more modest reforms,” he said, noting that lawmakers have ideological differences about who should sell alcohol.

A look at pending proposals:

Modernization efforts

State Rep. John Payne, R-Dauphin County, introduced legislation to expand Sunday sales at state stores by allowing the Liquor Control Board to open an unlimited number of stores on Sundays and for longer hours. Only 25 percent of the roughly 620 stores can open on Sundays until 5 p.m.

“Let's make as much money as we can,” Payne said. “It also makes the stores worth more when you sell them,” if the Legislature chooses to do so.

Payne's bill would allow the LCB to offer coupons and discounts at its discretion, rather than markdowns only when vendors offer them.

A proposal by Sen. Chuck McIlhinney, R-Bucks County, would allow beer distributors to sell in quantities smaller than a case and purchase a license to sell wine and spirits. State stores would remain, and the state would continue to control wholesale operations.

“My priority is to create a plan that strengthens every link in the chain, all the way from breweries' and distillers' doors to the customer's home,” McIlhinney said.

Out-of-state wineries could ship to customers' homes under a proposal by Rep. Curtis Sonney, R-Erie.

“The consumer really doesn't want to go through a middleman to get their wine,” Sonney said. “They (want to) just get on the phone or Internet and order.”

His proposal would require wineries to get a permit and collect Pennsylvania taxes but would not limit how much wine someone could buy.

Sonney said he's confident about the bill's prospects this year. The LCB no longer opposes direct shipment, and Corbett supports the concept, he said. A House committee passed the plan last year, and the Senate passed a similar measure, he said.

Sen. Larry Farnese, D-Philadelphia, introduced a direct shipment bill and Senate President Pro Tempore Joe Scarnati, R-Jefferson County, plans to reintroduce last year's Senate bill that would allow direct shipment of wine but limit customers to 18 liters per month.

Scarnati said this week he wants to modernize liquor sales but has concerns about selling state stores.

Funding changes

Under the law, most wines and spirits have a 30 percent mark-up in addition to the 18 percent Johnstown Flood Tax and 6 percent state sales tax. Tax money and store profits go into the state's general fund, for state police liquor enforcement and alcohol education.

Three proposals would change how the flood tax is spent:

Payne proposed cutting the tax to 9 percent and eventually eliminating it. To ensure the state doesn't lose money, his proposal would allow the LCB to make up the difference with pricing.

Rep. Robert Freeman, D-Northampton County, and Sen. Richard Alloway, R-Adams County, propose putting the money toward municipalities' and school districts' needs.

Freeman suggests buoying budgets of communities where at least 15 percent of real estate is tax-exempt. Many colleges, hospitals, government buildings or nonprofit organizations do not pay property taxes. His bill could especially help cities facing Act 47 financial oversight, Freeman said.

Alloway would allocate 10 percent of the tax to school districts, 5 percent to municipalities and 3 percent to the general fund.

Kari Andren is a Trib Total Media staff writer. Reach her at kandren@tribweb.com.

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