Wait likely to continue for LCB privatization

| Saturday, June 28, 2014, 9:00 p.m.

HARRISBURG — Despite Republican control of the legislature and governor's mansion, the General Assembly is unlikely to deliver on a longtime GOP priority of privatizing the state liquor system before recessing this week for summer break, Senate leaders and advocates said.

A “lite” reform bill in the Senate to expand private sales of beer and wine but not sell the state's 600-plus state stores is not slated for action either.

The legislature is pushing toward adopting a budget by the midnight deadline Monday and could stay a few days beyond that to deal with related bills.

Republicans took control in 2011 with Gov. Tom Corbett's victory and by recapturing the House in 2010 elections. Legislation to end Pennsylvania's government monopoly on booze sales has seen more legislative action during the past three years than any time in history, but supporters have not been able to send it to Corbett's desk.

The House last year approved an aggressive privatization plan that could not win Senate support. Senate Appropriations Chairman Jake Corman, R-Centre County, said last week there weren't enough votes for a full privatization bill.

A fall-back plan to allow convenience stores to sell beer and grocery stores with “R” restaurant licenses, which can sell bottles of beer, to sell bottles of wine as well is also short the votes, a top Senate staffer said.

”It doesn't seem to be at the top of the list,” said Sen. John Eichelberger, R-Altoona, a supporter.

Despite the state's $1.4 billion deficit, the Senate won't approve state store sales, which by any estimate, would bring in “hundreds of millions of dollars,” said Kevin Shivers, state director of the National Federation of Business in Pennsylvania.

“It's a huge disappointment,” said Shivers, an advocate for full privatization. “It's a missed opportunity.”

The “lite” bill for grocery and convenience stores is not designed as a revenue generator for the state. It is aimed at customer convenience.

Still, passage would represent “some progress,” said John Kennedy, chairman of Citizens Alliance of Pennsylvania, which bills itself as a pro-taxpayer, pro-business group.

“We're close,” said Kennedy, a former Republican state House member. “But close only counts in quoits and horseshoes.”

Pennsylvania and Utah are the only two states with government-run liquor monopolies. Two Republican governors, Tom Ridge and Dick Thornburgh, unsuccessfully pushed for selling the state stores.

“The legislation has moved farther than it has in 80 years,” said Jay Pagni, Corbett's spokesman. “The governor continues to push for customer convenience.”

The state store system was founded in 1933 at the end of Prohibition.

Union opposition is the leading reason legislation has failed, Kennedy argues. About 3,500 state store clerks are unionized and their leader, Wendell W. Young IV, has been an outspoken opponent. Unions have successfully “infiltrated” Republican ranks to help defeat privatization, he said.

“I believe the stalemate over liquor reform reveals several different trends in Pennsylvania state government,” said David Taylor, director of the Pennsylvania Manufacturer's Association. “First, unified Republican control has enabled minority Democrats to withhold support for any issue, thereby increasing the strain on divisions inside Republican ranks, usually along regional lines.

“Republicans from the greater Philadelphia region are more likely to support spending programs, work with organized labor and avoid conflict because they represent less staunch GOP districts,” Taylor said.

Young, president of United Food and Commercial Workers 1776, said one reason privatization proposals fail in the Senate is because of the attempt to please special interests. Proposals designed to favor one group in the sale of licenses — whether that's convenience stores, big-box-stores or beer distributors — wind up pitting interests against each other, he said.

Young said he was not surprised the latest liquor privatization plan failed, though he remained cautious in claiming any victory.

“Just because today the forecast says it's done, doesn't mean it's dead tomorrow or the next day,” Young said.

His members, he said, remain “vigilant and aggressive.” They support efforts to modernize the system, such as expanding hours, Sunday sales and store locations, he said.

Staff writer Melissa Daniels contributed. Brad Bumsted is state Capitol reporter for the Tribune-Review. He can be reached at 717-787-1405 and bbumsted@tribweb.com.

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