Republican legislator estimates selling state liquor system could net $1B
Pennsylvania’s Speaker of the House-designee Mike Turzai won’t abandon his quest to get the state out of the liquor business.
“Not only does it move us to the 21st century, which it does, finally, but it has an important revenue projection attached to it,” Turzai said.
For the past several years, the former majority leader has led the charge to sell off the Pennsylvania Liquor Control Board, a plan he will push next year. But other liquor law discussions are evolving as the upcoming session’s priorities take shape. Some would aim to bring more money into the state system, while others would focus on making it easier for consumers to buy or transport alcoholic beverages.
Drew Crompton, chief of staff to Senate President Joe Scarnati, R-Jefferson County, said liquor laws, including privatization, are likely to be topics of conversation when lawmakers return in January. Preliminary discussions with the House Republicans have occurred, he said.
“It is certainly a potential revenue source and one we’ll continue to look at,” Crompton said. “We have a big contingent in our caucus that would like to make fairly substantial changes to current liquor laws.”
Turzai’s privatization bill passed the House in March 2013, but the Senate did not agree to it. Turzai, a Marshall Republican, estimates selling off the state system could raise $1 billion, although the amount would depend on license fees and the number purchased. Privatization, he said, could provide help in closing the state’s projected structural deficit of about $2 billion next fiscal year.
The state’s liquor business makes a profit and contributes an $80 million payment to the general fund each year, in addition to taxes. The LCB reported in September paying a record $526 million in liquor tax, sales tax and transfers to the state’s general fund.
Yet the LCB’s profitability is dwindling, said Budget Secretary Charles Zogby during his mid-year budget update. Estimates from the Office of the Budget show expenditures were projected to increase by 6 percent, while revenue was set to go up by only 3 percent.
Gov.-elect Tom Wolf, a Democrat, is among those hoping to increase the LCB’s profits.
“Gov.-elect Wolf supports modernization of the state’s liquor stores, which can produce new revenue that can be used to fund vital programs while preserving good-paying, middle-class jobs,” said spokesman Jeff Sheridan.
Such efforts could include relaxing Sunday sale limitations, ensuring competitive pricing against other states, expanding the number of state stores in supermarkets and allowing direct shipment of wine and spirits.
In a co-sponsor memo to other senators, Sen. Larry Farnese, D-Philadelphia, said allowing residents to order wine would bring state law into compliance with a Supreme Court decision that said a state can’t treat in-state or out-of-state wineries differently when it comes to shipments.
“The bill is meant to expand consumer choice while still enabling Pennsylvania wineries to maintain their ability to sell direct to consumers, which makes up a considerable amount of sales for many of them,” Farnese said in the memo.
Teed up for next year is a proposal from Sen. Dominic Pileggi, R-Delaware County, that would make it legal for Pennsylvanians to bring alcohol into the state purchased elsewhere. Under law, “bootleggers” who cross the border to buy alcohol can be subject to a fine of $10 per bottle of beer or $25 per bottle of liquor.
So far, the bill has three co-sponsors, according to Pileggi’s staff.
A similar proposal was introduced in the House last session.
Melissa Daniels is a Trib Total Media staff writer. Reach her at 412-380-8511 or [email protected].