Brad Bumsted
Pittsburgh Post-Gazette
House Majority Leader Mike Turzai, R-Bradford Woods, today launches the debate over state store privatization by filing a document seeking co-sponsors for his bill that would end the state’s liquor monopoly.
Pennsylvania’s 644 state-owned liquor stores and its wholesale operation would be scrapped under Turzai’s bill. His bill is expected to expand the number of outlets and offer them at auction.
State taxes on liquor would be overhauled under his proposal.
“We have an opportunity to move Pennsylvania out of the post-Prohibition era by allowing the private sector to sell wine and spirits,” he argues in the memo expected to be filed today. “The legislation will provide consumers better selection, lower prices and greater convenience, while at the same time strengthening the enforcement and regulation of our liquor laws.”
Selling Pennsylvania’s state stores will be on the front burner when the Legislature returns to session in September. Republican Gov. Tom Corbett identifies it as a priority.
Two former Republican governors, Dick Thornburgh and Tom Ridge, both pushed to sell the state stores but were unsuccessful.
Turzai plans to introduce the bill next Wednesday, when details will be available.
Privatization opponents counter that the state stores have been modernized and that they provide reliable tax revenue for the state. Historically, one of the key arguments made against selling the stores is that the state-controlled system deters drinking by minors.
The Liquor Control Board announced this week that it was transferring a record $496 million in tax revenue and profit to the state treasury based on $2 billion in sales.
Turzai says the state stores on average bring in $90 million in profits and that the remainder is from taxes on wine and liquor, which the state will continue to get in a private system. He has predicted annual state revenues will be higher with privately-owned stores.
As with a similar bill he filed last session as minority whip in a Democrat-controlled House, Turzai’s bill is expected to require use of ID scanners with age verification.
How much revenue would be garnered from selling liquor licenses remains to be seen. Estimates have ranged from hundreds of millions to as high as $2 billion.
A Corbett administration consultant is studying the pros and cons of selling the state liquor system and is expected to estimate its worth. That study by Public Financial Management is expected to be released this month.
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