Bill renews fight to privatize Pa. liquor stores

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HARRISBURG -- State Rep. Mike Turzai knows that two Republican governors tried but failed to get rid of Pennsylvania's state-run system for selling liquor and wine, which has existed since Prohibition ended in 1933.

But he thinks that with the state's growing need for revenue to avert a pension crisis and a gradual shift in public sentiment, the times may just be changing enough that Pennsylvania could join 48 others states in privatizing the wholesale and retail sale of liquor.

Speaking Monday at a luncheon organized by the Commonwealth Foundation, a conservative policy group, the Bradford Woods Republican laid out the details of House Bill 2350, which he will soon introduce to privatize Pennsylvania's state-owned liquor stores by auctioning off licenses for 750 retail store licenses and another 100 licenses for wholesale distributors.

Currently, the state Liquor Control Board handles both the wholesale purchase of wine and spirits and the retail sales of the products through 621 state-owned stores.

Mr. Turzai estimated conservatively that the one-time auctioning of the licenses could bring in $2 billion for the state, with other estimates that he said put the total at as much as $6 billion. That money would help the state, which will need $5 billion or so by mid-2012 to pay the rising cost of pensions for retired state workers and public school teachers. He said it could also help the state fill the $1.9 billion hole that will be left once Pennsylvania stops receiving federal stimulus money in early 2011.

"There's a lot of positives that I think can come from this," said Mr. Turzai. "This is the opportunity to make significant change."

Mr. Turzai urged Gov. Ed Rendell to support the bill, but he said he's more focused on the next governor, who will take office in January. He said he wants to start the debate on privatization of liquor now.

"It's definitely designed to influence the gubernatorial debate and where we head with a new governor for the next four years," Mr. Turzai said.

But at this point, neither Democrat Dan Onorato nor Republican Tom Corbett seems ready to raise a glass and toast Mr. Turzai's idea.

Onorato spokesman Brian Herman said his candidate is against the privatization of liquor stores, but he does support taking more innovative approaches, such as placing them inside grocery stores.

Mr. Corbett, in an e-mail, said, "The liquidation of commonwealth assets should be an option to help address budget deficits," but he did not endorse Mr. Turzai's bill. Any plan to privatize liquor sales must be crafted carefully, to provide a minimum impact on current workers in state-owned stores, he added.

The union representing the current state-store workers has consistently opposed privatization efforts. Under the Turzai plan, current liquor store employees would receive preference when applying for other state jobs, or tax credits if they went to the private sector or tuition assistance if they sought additional education.

Under the Turzai plan, the number of liquor stores would increase from 621 to 750. One entity could own no more than 10 percent of them.

Rebecca Shaver, state executive director of Mothers Against Drunk Driving, said she supports the current state system and is particularly concerned about an increase in the number of liquor stores."If there is a larger number of licenses being issued, which leads to more availability, which leads to more consumption, we prefer that the system that we have in place remains in place," she said.

Evan Trowbridge is an intern with the Pennsylvania Legislative Correspondents Association.


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