Corbett’s New Liquor Privatization Plan Would Benefit Public Schools

Philadelphia Inquirer

Call it liquor privatization with a twist. Like others before him, Gov. Corbett wants to auction off Pennsylvania’s wine and liquor stores – but he wants to use the projected $1 billion in proceeds to help public schools.

Tying privatization to education aid was the surprise element in Corbett’s long-awaited announcement Wednesday of his proposal to get the state out of the business of selling wine and liquor. The governor, flanked by fellow Republicans from the state House, said his vision for privatizing was big and aggressive, and came down to two words: consumer convenience.

If public schools can be helped along the way, he said, even better.

“The selling of alcohol is not a core responsibility of government,” Corbett said at a news conference in Pittsburgh. “But education is.”

He added, “I believe it’s time to give Pennsylvanians what they want: choice and convenience.”

But comments hours later by a top Republican legislator offered a quick reminder of the biggest question mark over Corbett’s privatization push: Would linking it to school funding cause it to fare any better than past plans in a General Assembly that has historically resisted any bold changes in the liquor system?

This week, the top Republican in the state Senate said he was more open to modernizing the State Store system than in seeing it turned over to private industry. If that weren’t concern enough for the privatization forces, soon after Corbett’s announcement, Senate Majority Leader Dominic Pileggi signaled that he, too, thinks it is possible to give customers all the convenience and choice they need without a sell-off of the system.

“My view has been and remains that what Pennsylvanians want is easy, convenient access to beer and wine in convenience stores and supermarkets, and the ability to have specialty products shipped to their home,” Pileggi (R., Delaware) told The Inquirer. “How we get to that point – and whether it requires a wholesale sale – is something we will certainly be discussing.”

The legislature won’t be Corbett’s only headache. Unions representing both State Store clerks and schoolteachers were picking his proposal apart by dinnertime. And entrepreneurs with a stake in the liquor industry seem split at best.

School administrators’ initial reactions were mixed as well.

“Very welcome news, to say the least,” said Upper Darby superintendent Louis DeVlieger, on his way to a meeting to discuss the prospect of daunting deficits in his district’s budget. “I realize it’s a one-shot deal,” he said, “but anything at this point is appreciated.”

But Timothy Wade, superintendent of Jenkintown schools, said Corbett “should fully fund schools at the proper level and not make it contingent on other things.”

Still, Corbett’s liquor plan is, at its core, the most ambitious yet when it comes to deciding who gets to sell what and where.

Under the plan, retail beer distributors, who now can only sell by the case or keg, could apply for a license to sell the alcohol trifecta: beer, wine, and liquor. Supermarkets could sell a customer up to two six-packs of beer, and up to six bottles of wine. Convenience stores? A six-pack to go, no wine. Restaurants and taverns, which can now sell a customer no more than two six-packs of beer, could sell up to six bottles of wine.

Big-box stores would be allowed to sell beer by the case and up to six bottles of wine.

In a nod to beer distributors, Corbett’s plan would let them apply for “enhanced” licenses, allowing them — for the first time since Prohibition — to sell by the six-pack.

Despite that nod to distributors, which Corbett hopes will allow them to better compete once the beer market opens up, the industry was unhappy.

Consider this statement Wednesday from the Malt Beverage Distributors Association of Pennsylvania, which represents more than 450 distributors: “The plan . . . could force the closure of hundreds of small, family-owned and -operated businesses, throwing thousands of Pennsylvanians out of work.”

The governor said he expected liquor privatization to generate the $1 billion over four years, which would then be distributed to schools as so-called block grants. The state would require those dollars to be spent in four categories – school safety; early learning; science, technology, engineering and mathematics course programming; and “individual learning.” The money would be doled out using a formula based on student population and income level.

Like Jenkintown’s Wade, some educators saw the plan as a one-shot infusion that would do little for schools’ long-term financial planning, particularly as the pot of state education funds shrinks. Since taking office in 2011, Corbett has cut aid to public schools and higher education in order to balance the budget.

But Philadelphia schools chief William R. Hite Jr. was unequivocal: He likes Corbett’s plan. The state’s largest district, facing a $1 billion deficit over five years, recently borrowed $300 million just to keep schools open for the rest of the year.

“I’m in favor of any mechanism – one-time or sustainable – to fund schools,” Hite said. “We really are that desperate. We’re going to be advocating for any opportunities to improve revenue for schools.”

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