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Costa: Pa. Senate Democrats to counter liquor privatization plan

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Jasmine Goldband | Trib Total Media
Pennsylvania state Sen. Jay Costa, D-Forest Hills: “Sept. 15 is the day we wake up and recognize a whole series of changes and a whole series of reductions are going to be in place and those are going to have significant consequences.”

The last time Republicans in Harrisburg tried to sell off state-owned liquor stores, Democrats responded with a dead-on-arrival plan to squeeze more money out of the system.

This year, the dynamic is different, a key Senate Democrat said Wednesday.

House Republicans this month plan to pass a bill to sell the Pennsylvania Liquor Control Board stores and system to generate an estimated $1 billion for the state. Senate Minority Leader Jay Costa, D-Forest Hills, said he anticipates Gov. Tom Wolf will introduce liquor store modernization proposals.

“It’ll be more a conversation of customer convenience, customer access,” Costa said in a meeting with Tribune-Review reporters and editors, “along the lines of some of the things Senate Democrats have been talking about, in terms of modernization.”

Past proposals included expanding hours, flexible pricing and direct shipping policies aimed to generate $100 million to $125 million annually. Costa said those ideas have broader appeal than selling the system, even among some Republicans.

Though the House passed a privatization bill in 2013, it stalled in the Senate and failed to get to the desk of Republican Gov. Tom Corbett.

“If they didn’t lean the other way, privatization would’ve been done right now,” Costa said. “A lot of people aren’t buying that we sell off an asset of a billion dollars.”

House Majority Leader Dave Reed, R-Indiana County, said the privatization bill going to the floor this month is “a starting point.” That gives lawmakers and the administration from now through the close of budget season at the end of June to reach a consensus.

“There will probably be a whole host of possible ideas put on the table,” Reed said. “The hope or the goal will be to see where we can find some common ground.”

Wolf unequivocally disagrees with the concept of privatization, and instead supports expanded Sunday hours and opening state stores inside supermarkets. “I’m not sure there’s as much a passion for privatization as there is for modernization,” Wolf said at an unrelated news conference Wednesday. “We have a resource here, and it’s something we ought to make better and use to provide more revenues.”

Last fiscal year, the LCB transferred a record $526 million to the state’s general fund, which included state taxes and an annual $80 million transfer. Nathan Benefield, vice president of policy analysis at the free-market think tank Commonwealth Foundation that supports privatization, said the state would have flat or greater revenues under privatization.

“The excess profit the LCB makes would be replaced largely through annual license fees and fines and additional business taxes,” Benefield said.

Costa would like to go as far as expanding the wholesale arm of the business, with Pennsylvania acting as a supplier to other states. Though an unlikely sell in the Republican-controlled legislature, Costa said it’s worthy of discussion.

“If it’s something we’re already going to be able to do, it’s logical to grow that and enjoy the benefit,” he said.

Melissa Daniels is a Trib Total Media staff writer. Reach her at 412-380-8511 or [email protected].

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