Both sides in LCB debate state their case to senators
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HARRISBURG -- The fight between Gov. Tom Corbett and the state Liquor Control Board boils down to a simple question: privatization or modernization?
The LCB is trying to stave off the former by touting the latter, including permitting direct shipping to buyers' homes, expanding Sunday hours and putting in more wine kiosks, measures it outlined at a Senate Appropriations Committee hearing Tuesday.
Mr. Corbett, a conservative Republican, and legislators like Rep. Mike Turzai, R-Bradford Woods, want to privatize, meaning leasing the 620 state-owned-and-operated liquor and wine stores (and creating 130 new stores) to private operators, for one-time fees that could reach $2 billion.
But board chairman P.J. Stapleton and executive director Joe Conti, a former state senator, have a different idea. They want to modernize the 78-year-old system to make stores and their products more attractive to customers, a process that has been under way for several years.
Mr. Stapleton outlined proposed measures to the Appropriations Committee, telling members that the changes are also aimed at increasing the amount of money the LCB turns over to the state's general fund -- a welcome idea since the state budget deficit is estimated at $4 billion.
The LCB gives the state about $400 million a year in taxes from the 18 percent Johnstown flood tax (in place since 1936) and the 6 percent sales tax (7 percent in Allegheny County and 8 percent in Philadelphia.) The LCB turns over an additional $100 million a year from profit, generated in part by an automatic 30 percent markup imposed on all of its 25,000 types of wine and liquor. That profit amount has been declining, from $150 million in 2006 to only $80 million next year, a decline that senators expressed concern about, in light of the state's severe fiscal problems.
The proposed changes, which would need legislative approval, included:
First Published March 23, 2011 12:00 am
