Gov. Corbett unveils proposal to get state out of liquor business

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

Gov. Tom Corbett (R) unveiled his plan Wednesday to shutter state-run wine and liquor stores and auction licenses to private businesses to open their own stores throughout Pennsylvania.

The governor’s plan would allow for up to 1,200 licenses to be sold, increasing the number of stores from the roughly 600 currently in operation. The plan also would allow beer sellers to purchase so-called enhanced licenses to sell more varieties of products, including six-packs and single bottles. Those stores could also bid on wine and liquor licenses. The plan includes options for grocery stores to purchase licenses to sell beer and wine. Convenience stores would be able to sell beer.

“I believe it’s time to give the people of Pennsylvania exactly what they want: convenience and choice,” said Corbett during a news conference in Pittsburgh.

The governor said the plan would take roughly four years in to phase in, assuming it passes through the state legislature, and would generate $1 billion. He plans to use that money in what he’s calling the “Passport for Learning Block Grant.” Public schools would be able to tap into that money and utilize it for school safety, early education, individualized learning programs, and STEM (Science, Technology, Engineering and Math) programs.

“It’s nice that the governor has acknowledged he created a school funding crisis, but our students shouldn’t have to count on liquor being available on every corner in order to have properly funded schools,” said Mike Crossey, president of the Pennsylvania State Education Association.

In a news release, the governor’s office said, “The $1 billion in revenue will come from the three-to-four-year process of selling the LCB: $575 million from the wholesale license process, $224 million from the wine and spirits retail auction process, $107 million from the wine/beer license application process and $112.5 million in the enhanced beer distributor process.”

The United Food and Commercial Workers union, which represents state liquor store employees, said the plan would threaten jobs and vowed to fight it.

Corbett said the state would offer tax credits to businesses which hire those employees and would create a commission aimed at finding them jobs.

Steven Rachal, manager of Derry Beverage in Dauphin County, said he believes the plan would be a win for consumers but worried his business could take a serious hit.

“This is like a death sentence,” said Rachal. “Other places are going to be able to buy in bulk and lower their price. We just can’t compete with that, especially with a small store.”

Polling indicates a majority of Pennsylvania voters support privatization.

Democrats, and even some Republicans, are offering alternative proposals to the governor’s plan. They want the state to stay in the liquor business but see options expanded for current beer and wine sellers. State Sen. Jim Ferlo (D-38th) said he favors a plan to “modernize” the current system, allowing beer sellers more options to sell single bottles and six-packs.

“I have a grave concern about the proliferation of mom-and-pop liquor stores and some of the adverse impacts they would bring, the reality at the local level,” said Ferlo.

Sen. Chuck McIlhinney (R-10th) said he’s introduced legislation to allow beer sellers to purchase a license to sell wines and spirits. He’d also like to see places selling wine by the glass have the option to sell bottles.

Lt. Gov. Jim Cawley (R) said lawmakers aim to have the governor’s proposals introduced in legislative form Monday.