Governor continues push to privatize liquor sales

Gov. Tom Corbett (R) continued his push Friday to close the state’s wine and liquor stores, a move attempted for decades but receiving attention once again following his new proposal earlier this week.

“There are people, because it’s change, because it’s going to be different, they’re afraid of change,” said Corbett.

Corbett says his plan would be “fiscally neutral” In a news release Friday, his administration said, “Every dollar not returned to the state due to the divestiture of the (Liquor Control Board) is returned to the state through restructured fees.”

Republican lawmakers also pointed to increased sales tax collections and property taxes from new businesses being among the measures that would keep the plan revenue neutral.

Under the proposal, up to 1,200 licenses to sell liquor would be sold, potentially doubling the number of liquor stores across the state. Grocery stores and convenience stores would be able to sell alcohol. Existing beer distributors would be able to bid on liquor licenses or apply for so-called “enhanced” beer license, allowing them to sell beer in quantities smaller than a case.

The initial roughly $1 billion windfall from sale of licenses would go toward K-12 education, Corbett said.

According to the PLCB, the state’s stores generated $2.1 billion in revenue in the 2011-2012 fiscal year. Of that, the agency returned $494 million to the state treasury.

“New stores and stores expanding to be able to sell wine and beer, you should have many new jobs. You’ll have corporate income tax coming in, new businesses expanding in Pennsylvania,” said Nathan Benefield, director of policy analysis with the Commonwealth Foundation, which advocates for limited government.

The independent group cites research by the PFM group, which projects liquor privatization would result in $92 million  being spent out-of-state returning to Pennsylvania. You can read more about the group’s research here.

“A lot of people cross the border to other states to bring back their wine and liquor because they have the price and convenience they want there. And, making Pennsylvania more competitive will help keep some of those sales here,” said Benefield.

Meanwhile, unions and other groups are lining up to oppose the plan, saying the governor’s math doesn’t add up.

“Well, I think primarily right now you have a cash cow that brings $500 million into the state. Why would we upset that? It’s working right now,” said Dave Fillman, executive director of AFSCME Council 13m which represents about 500 support staff in the state’s liquor stores.

As it has during previous debates over privatization, the union cites the current ability of the commonwealth to collect all taxes from alcohol sales with no delinquencies. It also cites the economic impact of about 5,000 liquor store employees being laid off with no guarantee of employment at new stores. You can read more by clicking here.

The governor said he’ll provide tax incentives to stores who hire those workers and create a committee aimed at helping them find work.

Michael Crossey, the head of the Pennsylvania State Education Association, expressed disappointment with the governor’s proposals.

“The whole process makes no sense to us at all,” said Crossey. He described the governor’s link between privatization and education funding a “false choice.”

Crossey said, “It makes no sense to try to sell the state stores and to try to sell the idea that they’re a detriment to the state when they’re not. They’re a benefit to the state.”

Lawmakers said they aimed to introduce legislation next week.