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March 10, 2011 | By | Posted in Governor, Legislature

Corbett puts philosophical over fiscal in on-going Pennsylvania liquor debate

VIDEO INSIDE:  Some Republicans question effort’s chance of success

 

By: Eric Boehm | PA Independent

 

Ten words uttered by Gov. Tom Corbett during his budget address Tuesday may have shifted the debate over privatizing the state-owned liquor stores in Pennsylvania.

 

“This isn’t about the money. This is about the principle,” said Corbett, seemingly casting aside half of the argument Republicans have made for months about the merits of privatizing the 624 state-owned liquor stores.

 

Led by Majority Leader Mike Turzai, R-Allegheny, proponents of the privatization effort have been advancing a two-pronged argument. They say privatization would remove government from doing something it should not be involved with in the first place and would generate potentially $2 billion at a time when the state is searching for ways to fill an expected $5 billion deficit.

 

Gubernatorial spokesman Kevin Harley did not immediately respond to questions Thursday as to whether the governor stands by the $2 billion revenue estimate for the sale of the stores.

 

While addressing the Pennsylvania Press Club in January, Turzai made it clear the potential revenues would not be available until next year due to the length of time needed to competitively auction off the state store licenses after a bill was passed.  However, the potential $2 billion windfall has continued to be a major part of the Republicans’ argument.

 

It was no less so for Corbett, who frequently pointed to the sale of the state liquor stores during his campaign as a way to generate revenue without raising taxes, which he promised not to do.

 

Now in office, Corbett may have shifted the argument in the span of a few sentences Tuesday morning, but the governor made no mistake about his commitment to getting Pennsylvania out of the liquor business.

 

“Government should no more run the liquor stores than it should run the pharmacies and gas stations,” said Corbett. “Business and its opportunities belong to the people.”

 

Notably absent from the address was a reference to the potential revenues available from privatizing the stores.

 

But moving to a philosophical argument instead of a fiscal argument has some Republicans questioning whether there is enough support for the privatization effort.

 

“I had always thought we were talking about money,” said state Rep. John Payne, R-Dauphin, during Thursday’s meeting of the House Liquor Control Committee. “Maybe we are now talking about whether morally we should be in the business. That will be a different approach for me.”

 

Committee Chair John Taylor, R-Philadelphia, went a step further, suggesting the support for privatization is directly linked to the fiscal incentives.

 

“The more we slip down in terms of priorities into philosophy, the more difficult it is politically,” Taylor said.

 

Taylor said he still expects to see a bill in front of the House Liquor Control Committee by early April, though the timing will depend on several factors.

 

Tuesday, Corbett also announced the formation of an executive-level task force to examine “what jobs now performed by government might be better done by the private sector.”

 

Separately, the state Senate’s Liquor Control Committee has called for an independent study to be conducted on the potential profits to be gained by auctioning the state store licenses.

 

Steve Miskin, Turzai’s spokesperson, said Thursday the effort to craft a bill was continuing, with input from the governor.

 

“We’re getting a lot of constructive comments back and we’re going to be put together the best and strongest bill possible,” said Miskin.

 

State Rep. Dante Santoni, D-Berks, who already opposes the privatization effort, said the philosophical argument will cause more problems than the fiscal approach.

 

“I think as you get away from the argument of dollars, with the budget deficit we have it becomes more problematic for the governor to get the bill through,” said Santoni.

 

Santoni said also questioned the $2 billion revenue figure. He said the only way to get to that figure would be to increase the number of licenses sold, which would cause the value of the licenses to drop.

 

Opponents of privatization point to the annual payments made by the state store system to the state budget – which range from $50 million to $150 million depending on various factors – and claim there are social benefits to having the state in control, such as less underage drinking.  Those statistics are disputed by proponents of privatization.

 

Even if support has been dampened, Taylor said there will still be a “willingness to engage” the privatization debate in the committee.

 

“If we were to set up a system from scratch, it would not have government in it,” Taylor said . “It is much more difficult to dismantle than to create, so we’re going to look at what makes sense to get to there from here.”

 

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