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Pennsylvania liquor privatization bill update

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March 26, 2013

Pennsylvania

Harrisburg, Pennsylvania: Governor of Pennsylvania Tom Corbett (R) was a vocal advocate for privatizing the state's 61 liquor stores before he even took office. In November of 2010, Corbett joined other members of his party in the State House sympathetic to the cause, including the new Majority Leader, Mike Turzai,[1] and, years later, he introduced a proposal to privatize the state-owned liquor stores and use the revenue to increasing funding for education. Corbett argued that "the selling of alcohol is not a core responsibility of government, but education is." The governor's plan would see the state's liquor and wine stores auctioned off, while big box stores, supermarkets, and convenience stores would be able to sell limited quantities of beer and, in the case of big box stores and supermarkets, wine. Restaurants, already able to sell beer, would be able to sell customers up to six bottles of wine, while retail beer distributors could obtain licenses to sell beer, wine, and liquor, instead of only beer. The auctions and licensing fees would generate an estimated $1 billion over four years. Under Corbett's plan, these funds would be distributed to school districts using a formula based on their student enrollment and income level. The block grants would fund "school safety; early learning; science, technology, engineering and mathematics course programming; and 'individual learning.'"[2]

On March 5, 2013, House Majority Leader Turzai introduced Corbett's plan as House Bill 790, and the bill was referred to the Liquor Control Committee.[3][4]

Two leading Republicans, Senate President Pro Tempore Joe Scarnati and Senate Majority Leader Dominic Pileggi, supported increasing consumer choice but remained unconvinced that the government stores needed to be auctioned off. State Representative John Taylor (R) proposed an alternative plan which would introduce more competition into the liquor market but allow a reduced number of the state stores to continue to operate. The United Food and Commercial Workers Local 1776, which represents workers at the government liquor stores, also opposed privatization, while supporters of increased education funding remained divided by the plan.[5][3] The Commonwealth Foundation, a pro-market think tank, commended Corbett for his privatization proposal. The Foundation noted in a January 30, 2013, press release that Pennsylvania loses tax revenue when residents go to other states to buy alcohol and that the government had spent $10 million to establish its own wine brand to compete against privately owned wineries.

Following its House passage, HB 790 was sent to the Senate. Pileggi reasserted his emphasis on "looking for ways to increase convenience, and selection at a competitive price" rather than privatization. He indicated that bill would be changed before passage in the Senate. Corbett refused to publicly comment on how he would approach negotiations with the Senate but reaffirmed his support for privatization.[6]

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