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Liquor privatization bill receives a major boost in Pennsylvania

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Heidi Murrin | Trib Total Media

HARRISBURG — A proposed House-Senate bill to privatize state liquor sales was approved in committee Sunday, setting up a historic vote by the full Senate.

The measure would lease the state’s wholesale system, allow facilities with restaurant licenses to sell limited amounts of wine and liquor per transaction and let beer distributors sell unlimited amounts of spirits and wine.

If all permits are not purchased by distributors, licenses would be auctioned off to the private sector for a minimum $150,000 bid, according to a summary of the bill. So-called big-box stores could bid on licenses not taken by distributors.

The 600 state-owned Wine & Spirits stores would be closed by the Liquor Control Board based on availability of wine and liquor in the area and the store’s profitability. There is no timetable for store closures.

The bill received a spirited debate and was approved 7-4 by the Senate Law and Justice Committee.

Democratic Gov. Tom Wolf has said he favors “modernizing” the state-controlled system and not closing state stores. He said in March that he would veto a House-passed liquor divestiture bill. The compromise legislation used the House bill as a starting point but has numerous changes. Lobbyists, legislative staffers and analysts say they expect Wolf to veto it.

Wendell W. Young IV, president of United Food and Commercial Workers Local 1776, said there’s no doubt in his mind Wolf will veto it.

“I think this bill is a mess,” he said.

Pennsylvania is one of two states to control wholesale and retail liquor and wine sales.

“If Pennsylvania’s system was so wonderful, the other 48 states would adopt monopoly booze,” said Matt Brouillette, president of the Commonwealth Foundation.

Jeffrey Sheridan, Wolf’s spokesman, said the governor will make up his mind about the issue if and when a bill lands on his desk.

The full Senate could vote Tuesday once the Appropriations Committee examines the fiscal impact. The Republican-crafted state budget, due by midnight Tuesday, counts on $220 million annually from what they consider to be liquor reforms.

Democrats blasted the bill for its potential to eliminate 4,700 jobs at state stores.

“Someone is going to have to sit at the dinner table and look at their spouse and say, ‘Our government just eliminated my job,’ ” said Sen. Jim Brewster, D-McKeesport.

Sen. Scott Wagner, R-York County, said there are many knowledgeable state store workers whose expertise will be valued by private industry. He estimated that half the 4,700 employees would get work in private stores. The bill provides a grant through the Pennsylvania Higher Education Assistance Agency to retrain LCB employees.

“This is an opportunity to get rid of a system that’s just not working,” he said.

The legislation was written to benefit wholesalers and retailers, union leader Young contended. Profitability for the liquor system will become a problem quickly, he said.

The idea of leasing wholesale control to private interests has not been publicly vetted, Young said.

While the House has twice approved a liquor privatization bill, the Senate has not, said G. Terry Madonna, political science professor at Franklin & Marshall College. Despite efforts by three former Republican governors, Dick Thornburgh, Tom Ridge and Tom Corbett, the state stores have remained under commonwealth control. Corbett twice tried to push privatization, but the bill could not get through the Senate.

“The election of Tom Wolf has motivated and galvanized Republicans,” Madonna said.

The Senate has become a bit more conservative with new members such as Wagner and new leaders, he said.

Brad Bumsted is a state Capitol reporter for Trib Total Media. He can be reached at [email protected].

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