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December 08, 2016
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PA House passes historic liquor bill; Senate may be tougher to convince

Employees at the state store in Hawley, PA may be seeking new employment if the liquor privatization plan passed by the house is also ratified by the senate.
TRR photo by Fritz Mayer

HARRISBURG, PA — The Pennsylvania House on March 22 passed what Governor Tom Corbett called historic legislation that would privatize the state owned system of wine and liquor stores. He said it was the first time either chamber of the government has passed such legislation since the end of the Prohibition era 80 years ago.

The bill would ultimately give total control of the issuance of permits to sell alcoholic beverages and enforcement of the liquor laws to the state, but the retail sale of all beer, wine and liquor would be handled by the private sector.

There were several changes in the house legislation as compared to the bill proposed by Corbett. For instance, current beer distributors, which are already private, will be given first opportunity to buy the new wine and spirits licenses before anyone else, and the price will be lower than what others will be asked to pay.

Union representatives and others have expressed concern about the number of jobs that will be lost if the state system is privatized. Representative Duane Milne said that there will be more jobs because the privatized system will be larger than the current one.

Milne wrote, “Privatization will yield more employment opportunities for workers, as a state store system with 600 stores gives way to a market-driven system of upwards of 1,800 outlets. These private operations all will be seeking to hire employees experienced in the adult beverage sector. Additionally, entities hiring employees of the state store system will be granted a $2,000 per year tax credit for each such employee hired.”

On the other side of the equation, there is concern that employees now earning state pensions will not receive those pensions under a privatized system of the sort the house envisions.

The measure passed in the house with a vote of 105 in favor of privatization and 90 opposed, but the senate may not be so quick to serve up a majority in support of the measure.

Senate Majority Leader Dominic Pileggi said finding 26 votes in the senate to allow the plan to go forward may prove difficult. He said, “One of the issues that has been raised many times is the access issue for rural areas that are served by the state store system, that might not get sufficient service from private licensees.” He added that the focus of a bill supported by the senate would have to address convenience, selection and a competitive price.

Also, the issue of whether or not the state should immediately end state participation in wholesale operations would have to be settled. Corbett said he understood there was still a lot of work to be done to get the bill passed.

The next step in the process would be for the senate to hold hearings on the proposed legislation.