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January 29, 2013 | By | Posted in Legislature

Top GOP lawmakers aren’t buzzing over privatization plan

By Melissa Daniels | PA Independent

DRINK UP: Privatizing Pennsylvania’s state control system for selling liquor is on Gov. Tom Corbett’s radar, but leading lawmakers are hedging their support and voicing other options.

HARRISBURG – The governor wants it, as do many consumers. Still, not everyone is sold on the idea of getting Pennsylvania out of the liquor business, including two top Republicans.

Gov. Tom Corbett hasn’t announced his liquor privatization plans, but the mere concept already has Senate President Pro Tempore Joe Scarnati, R-Jefferson, and Speaker of the House Sam Smith, R-Jefferson, mulling alternatives.

Scarnati said he is willing to hear privatization proposals to sell off the state liquor system, but he supports legislation that would change how the Pennsylvania Liquor Control Board does business, ultimately allowing it to make more money.

SCARNATI: Senate President favors pursuing modernizing the Pennsylvania Liquor Control Board.

For several years Senate Republicans have pushed for “modernization” plans making the state system more convenient to consumers – and profitable for the state.

“I think we can put a couple trains on the track and continue to work through this,” Scarnati said.

Modernization reforms, involving changes to pricing, hiring and retail operation, could make the state $75 million to $100 million annually, according to Scarnati, who said that money could flow to the state budget. The LCB brought in more than $1.5 billion in sales in fiscal 2010-11, $105 million of which went to the state’s general fund.

But the state would still control the system.

On the House side, Smith said he envisions Pennsylvania considering a hybrid plan that allows some private sales, such as beer in grocery stores, or allowing beer distributors to buy licenses to sell wine while keeping spirits under state control.

Smith said he doesn’t see selling off licenses for state stores as the only option.

“It seems to me, logically, that here what we might end up with is a hybrid where you’re succeeding in providing private opportunities but not exactly abolishing the system as we know it,” he said.

Corbett will unveil his plan at a news conference set for 2 p.m. Wednesday in Pittsburgh. The administration has kept mum on the details, but Corbett has repeatedly said he believes the state should not be in the business of selling liquor.

Though Corbett may have trouble winning over Scarnati and Smith, the governor has a key ally in House Majority Leader Mike Turzai, R-Allegheny, who crafted a privatization proposal last year.

That legislation would have generated about $1.6 billion in revenue from selling off liquor licenses and would have kept tax revenue from alcohol roughly consistent with current levels. But it failed to get the support to pass, and members of the United Food and Commercial Workers said the plan would eliminate as many as 4,500 jobs.

SMITH: Speaker of the House sees liquor privatization turning into a “hybrid” plan that doesn’t abolish state system.

Scarnati and Smith say they haven’t yet seen specifics of Corbett’s proposal. But they are wary about what it could do to rural areas.

The LCB operates more than 600 retail wine and spirits store statewide. Scarnati said he wondered whether private retailers would choose to operate a store in some parts of the state where they are unlikely to turn a profit.

Smith, too, said rural areas might wind up shortchanged if the state were to sell off its liquor stores.

“We have a system today that isn’t that great but it functions,” Smith said. “The last thing I want to do is change to a system that the public is less satisfied with.”

Contact Melissa Daniels at melissa@paindependent.com

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Melissa Daniels is a reporter for PA Independent. She can be reached at 717-350-0962 or Melissa@PAIndependent.com

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