Representatives Talk Transportation, Liquor System

Hazleton Standard Speaker

Gov. Tom Corbett has said fixing the state’s roads and bridges will cost $3.5 billion.

State Rep. Jerry Knowles, R-124, Tamaqua, believes Pennsylvania can generate half that by selling its liquor stores. He has introduced legislation that would channel proceeds from their sale into a special transportation fund.

Knowles was one of seven state legislators who attended a recent legislative “roundtable” meeting sponsored by the Manufacturers and Employers Association at Top of the 80s in Sugarloaf.

Knowles said his bill, which would not be enacted unless the liquor stores and are sold, would be one answer, but not the only answer, to the transportation funding problem.

“If the sale generated $1.2 billion, or $2 billion, it would go into a special fund,” he said. “We would put 20 percent, or about $400 million and interest, into the transportation fund every year for five years. It would be for roads and bridges, not mass transit. It’s not a cure-all, but over the course of the next next five years, it will be a help.”

Knowles said other funding sources have to be identified for roads and bridges.

“I think we all recognize the huge challenge we face with our infrastructure,” he said. “We’ve got to look at many creative ways (to raise money). We’ve got to look at how the prevailing wage is driving up the cost of roads and bridges. We need to take a good, close look at PennDOT’s (the state Department of Transportation)’s budget, where they are spending money.”

Knowles said taxing natural gas extracted from the Marcellus Shale is not the answer.

“I’ve got constituents coming up to me and saying, ‘Tax those drillers, and none of us will have to pay taxes.’ That us not the case,” he said. “Anyone who thinks a tax or an impact fee on drillers is going to solve all our problems, nothing could be farther from the truth.”

State Rep. Doyle Heffley, R-122, Lower Towamensing Township, said areas of innovation to save money have to be identified.

“It’s not just about raising more capital,” he said. “We have to look for more efficiency in the system. The governor’s (transportation funding) task force addressed modernizing the program at PennDOT. Being able to go online and electronically file an application for a highway occupancy permit would be phenomenal for business.

“We also have to look at the soft costs of construction, because, for instance, 40 percent of bridge costs are eaten up in engineering costs, like historical and archaeological studies. There are some redundancies. We need to come up with a template”

State Sen. John Yudichak, D-14, Nanticoke, said transportation and how to tax Marcellus Shale are “the two most important public policy issues we will have to make decisions on in the next year” because of the bad condition of the state’s roads and bridges.

Yudichak said the state has to invest in its infrastructure to grow economically.

He said a way to permanently fund transportation and other infrastructure has to be identified “so we don’t have to do battle every year to find the dollars. We are getting less dollars from the federal government every year, and construction inflation is through the roof. We need to have a strong public sector to do this infrastructure project, so we can set the stage for the real job creators, the private sector.”


Andy Falco of Hydra Tech Pumps, Nesquehoning, chairman of MAEA’s board of directors, said a recent Qunnipiac University poll found that privatization of liquor stores is favored by 69 percent of Pennsylvanians.

“I honestly believe there are very few things we in government can do better than the private sector,” Knowles said. “There are core services of government, transportation education and corrections. I strongly believe time has come from the privatization of liquor stores.”

Heffley said more licenses will mean more service.

“We are looking at doubling the amount of licenses (twice as many licenses as there are state stores) so there will be a lot more businesses to cater to people’s requests,” he said. “Right now, 73 percent of liquor sold in Pennsylvania is sold by the private sector. Beer distributors do a great job across the state. They are accountable, and they’re good community partners. And, we are losing an incredible amount of business because people go out of state to buy liquor.”

However, Democrats who attended the roundtable, including state Rep. Eddie Day Pashinski, D-121, Wilkes-Barre, said the State Store system provides many benefits.

“Alcohol is the leading drug in our society,” Pashinski said. “The responsible, accountable, appropriate handling of this particular commodity is absolutely imperative. Aesthetically, the stores are beautiful, well-lit, and have an expanded product line that is less expensive than any other state, and it’s all top-shelf stuff. People who work there have a living wage job. If they sell to a minor, their job is in jeopardy. It’s not the same incentive as a businessperson, because they want to sell it.”

Pashinski said the current system generates funds.

“Hundreds of millions dollars fund state police and other needed programs,” he said. “No taxpayer dollars go into it. It is an entity owned by the Pennsylvania citizen. Right now, we have a program that is working.”

Knowles said he supports House Bill 11, which would privatize liquor stores.

Introduced by state Rep. Mike Turzai, R-28, Pittsburgh, the legislation would auction 1,250 liquor sales licenses – 750 Class A licenses to retail outlets with 15,000 or more square feet of retail space and 500 Class B licenses to retail outlets with less than 15,000 square feet of space.

Class A licenses would typically be held by grocery stores and “big box” retail outlets, while the Class B licenses would go to independent operators.

Wholesale licenses would be sold based on a contractual relationship between manufacturer/importers and a wholesaler to be the exclusive wholesaler for their products within the state.

“The local businessman is probably is not going be able to afford one (license),” Pashinski said. “Big box stores will get the license, and won’t hire any more people.”

Knowles said the state would not lose as much money as some legislative leaders claim if liquor stores are privatized because the greater part of that amount is sales tax.

“I’vwe heard figures as high as $600 million – even from the Republican Caucus – that we will lose,” Knowles said “It will be more like $60 million, and that’s a lot of expenses that will not be incurred by the state (if the system) goes into the private sector,” Knowles said.

Heffley said the state can make up that difference with taxes already imposed on liquor.

State Rep. Neil Goodman, D-123, Mahanoy City, said Turzai’s bill will make it more difficult for a consumer to purchase alcohol in Pennsylvania.

“We have 10 liquor stores in Schuylkill County,” he said. “At $2.5 million a license, how many stores do you think Schuylkill County will have? We (America) are the second-largest purchaser (of liquor) to Canada. If we privatize, we’ll have fewer stores, with a smaller selection. It will make a handful of people very rich.”

State Sen. David Argall, R-29, Tamaqua, and state Reps. Tarah Toohil, R-116, Butler Township, and Mike Tobash, R-125, Schuylkill Haven, also attended the roundtable.

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