For the first time in Pennsylvania history, a chamber of the Legislature today started to debate legislation to privatize the state liquor stores and shift the sale of liquor and wine to private retailers.
The issue has been pending off and on for three decades and three Republican governors, including current Gov. Tom Corbett, have sought legislation to privatize the liquor system. But the proposal has never garnered enough support to come up for a floor vote.
The state House tonight is considering a plan pushed by House Majority Leader Mike Turzai, R-Bradford Woods, his spokesman Stephen Miskin said.
Just a year ago, his bill was believed to be on life support.
Dozens of amendments were pending as Turzai continued to push for legislation to end Pennsylvania’s status as one of only two states controlling the wholesale and retail sale of liquor and wine. Utah is the other.
Turzai’s amendment to an earlier version of H.B. 11 calls for selling the 600-plus state-owned stores and issuing 1,600 retail licenses. Beer distributors, now able to sell beer only by the case, would be able to sell in any combination of six packs. They would get the first shot at buying wine and liquor licenses, too. The bill overhauls the archaic tax structure which still imposes the 18 percent “Johnstown Flood Tax,” imposed to help victims after the 1936 flood. His bill replaces that tax with one based on gallons sold.
The so-called gallonage tax ranges from $8.25 to $9 for wine and $11 to $12 per gallon for spirits.
A final vote would take place later this week.
“It’s an awful bill for consumers,” said Downtown attorney R.J. O’Hara, who specializes in handling liquor licenses and is representing grocery stores in the privatization battle. “It won’t work for grocery stores if it passes. It’s an awful bill for grocery stores.”
Giving beer distributors the first crack at licenses means it “will not come close to being a free auction,” O’Hara said.
But Matthew Brouillette, president of the Commonwealth Foundation, which supports privatization, said, “Government in the booze business is a lose business for both taxpayers and consumers. Privatization of wine and spirits will provide us with greater selection, lower prices and better services while limiting government to its proper oversight role.”
Jay Wiederhold, president of the Pennsylvania Beer Alliance, a beer wholesalers group, said the alliance “vigorously” opposes the bill. The alliance believes “under HB 11 the consumers of Pennsylvania would have a smaller selection in the average wine and spirits store as well as higher prices.”
Senate President Pro Tempore Joe Scarnati, R-Jefferson County, who last year expressed reservations about an earlier Turzai bill because of the impacts on rural areas, issued a statement on Twitter yesterday that said, “Looking forward to working on Rep. Turzai’s comprehensive privatization proposal in the fall.” Lawmakers will also be campaigning for re-election in the fall and might be loath to take up a controversial measure.
A revised copy of Turzai’s plan includes a provision that a state store must remain open if no wine and spirit license is purchased within a 10-mile radius