GOP panel gathering data for sale or lease of state liquor stores

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HARRISBURG -- In the 1980s, Republican Gov. Dick Thornburgh tried very hard to sell the state liquor store system to private interests, but he failed.

In the 1990s, Republican Gov. Tom Ridge gave it another shot, but he also failed.

Now, Republican senators may be gearing up for a third try at privatizing all, or at least the retail portion, of the far-flung system of state-owned and run stores that sell wine and spirits.

The Senate Republican Policy Committee will hold a hearing tomorrow to gather information about the pros and cons of selling the state stores.

It could be the first step toward coming up with new legislation to sell the whole system to a private operator, or at least enter into a public-private partnership. Under that setup, the 600 retail liquor/wine stores now operated by the state, would be sold to private owners, but the Pennsylvania Liquor Control Board would continue to handle the wholesale purchase of products.

"I think privatization, generally, is a good thing, the best thing for consumers in the long run," said Sen. Jake Corman, R-Centre, chairman of the Policy Committee. "But I want to hear from all sides and haven't made a final decision" on whether to move forward on another effort to try to sell the state stores.

Stephen MacNett, Senate GOP legal counsel, said that Democratic Gov. Ed Rendell "opened the door for this discussion with his proposal to lease the Pennsylvania Turnpike to a private operator. Managing transportation in the state is a core government responsibility, but managing the marketing of alcohol, arguably, is not."

Mr. MacNett noted that the governor thinks the state could get $10 billion -- or even more -- by selling or leasing the 530-mile turnpike system. The governor calls the turnpike an asset,he said, and would use the funds received from a private operator to improve ailing state roads and bridges.

Mr. MacNett said the liquor store system is also an asset.

The Senate Republican review of whether to sell the state stores "was stimulated by the governor's proposal to sell the turnpike," he said. "That has triggered a review of what other state-owned assets the state might possibly privatize."

Testifying tomorrow will be some opponents of selling the liquor stores, such as unions representing the 2,500 Liquor Control Board employees, along with members of Mothers Against Drunk Driving and other social conservatives.

The groups come from different political points of view, but in the past have combined to pressure lawmakers to keep hands off of the state-run system, which has existed since Prohibition ended in 1933.

The unions fear members would lose their jobs if private owners take over the liquor stores. MADD fears that liquor might become more accessible, especially to students and underage consumers, if the stores are operated by businessmen whose major interest is making a profit through larger sales.

Members of fiscally conservative groups, such as the Commonwealth Foundation and the Reason Foundation, who generally believe in private enterprise rather than expanded government operations, will testify too.

Also testifying will be some investment bankers and other financial experts who might put a price on the entire state store system.

Mr. Corman said he's heard a sale could fetch "somewhere in the neighborhood of $1 billion."

Democratic governors, perhaps because of pressure from employee unions, have generally opposed selling the state store system. Gov. Bob Casey did so in the late 1980s and early 1990s, and Mr. Rendell said yesterday he doesn't think such a sale is a good idea.

"We've made so much progress now [in making state stores more customer-friendly] that it's unnecessary," he said.

Since he became governor in January 2003, there have been improvements at state liquor stores, including a wider selection of wine, clerks with more knowledge about wines, wine-tastings at stores and some being open on Sunday afternoons.

Critics still complain, however, that it's more difficult to find a liquor store in Pennsylvania than in other states where the stores are privately run. They also say the selection of wines and liquors in Pennsylvania stores still pales in comparison with that in other states.


Bureau Chief Tom Barnes can be reached at tbarnes@post-gazette.com or 1-717-787-4254.


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