Liquor Privatization Issue Down To The Wire As Lt. Gov. Jim Cawley To Testify

Harrisburg Patriot-News

It has been a very long last call in Pennsylvania. For more than two years, lawmakers have debated the pros and cons of scraping the state’s 80-year-old liquor monopoly.

Will a sale of the state’s 600 wine and liquor stores generate a financial boost to the state’s budget? How will the 4,000 state workers be compensated? Will cases of drunken driving and underage drinking rise or drop in a free market?

So many ‘what if’s” as the clock ticks.

On Tuesday, the Senate Law and Justice Committee will host its third and final hearing targeting liquor privatization. The pressure is mounting.

Lt. Gov. Jim Cawley is scheduled to testify on behalf of the governor’s administration. Gov. Tom Corbett has said he would like to see a proposal on his desk by the June 30 budget deadline.

This is not the first time Pennsylvania has attempted to pass legislation to privatize the state’s liquor stores. Both governors Dick Thornburgh and Tom Ridge unsuccessfully tried.

The latest efforts were spearheaded more than two years ago by House Majority Leader Mike Turzai, an Allegheny Republican. He introduced a bill in June 2012 but it failed to pick up momentum.

Earlier this year, Gov. Corbett energized the push to privatize during a Pittsburgh press conference. The governor proposed funding educational programs through a potential sale of the state-run system.

“Why do we continue to deal with an antiquated liquor system that is 75 years old? The question should be ‘Why don’t we have choice? Why don’t we have convenience like the other 48 states in the union?’” Corbett said.

In March, the House of Representatives passed what was deemed a historic bill designed to dismantle the state-run stores in favor of opening up liquor sales to private business.

The bill allows beer distributors first shot at 1,200 wine and liquor licenses and would allow supermarkets to sell wine.

Turzai called the proposal “A-plus product.” “This is a great opportunity for Pennsylvania. It is a historic opportunity for Pennsylvania,” he said.

But not everyone is in agreement. Some of the most outspoken opponents against privatization include the United Food and Commercial Workers Local 1776 who have stood their ground under leader Wendell Young IV.

Nicknamed “the yellow shirts” for the bright union shirts, members have crowded into hearings and converged at the Capitol to spread their message. Most recently, the union paid for radio and television advertisements touting Corbett’s push to privatize as a “reckless scheme.”

Along with union members, beer distributors have been critical of some elements of the privatization legislation. On one side they would like to sell smaller packages of beer beyond cases but on the other side they say competition from the private sector would create an uneven playing field and hurt business.

“Eighty to 90 percent of our income comes from beer sales. How are we going to be making a living if everyone has it?” asked Mark Tanczos, president of the Malt Beverage Distributors Association of Pennsylvania.

Their biggest competitors would include grocery stores who applaud the idea of selling alcohol, whether it be wine, beer and liquor.

Giant Food Stores, Weis Markets, Target and Walmart have all said they would sell alcohol just as they do in their stores in other states.

Already, more than 150 supermarkets in Pennsylvania sell beer via restaurant liquor licenses. Those licenses require supermarkets to have separate cash registers and sit-down cafes.

And there is room for growth. David McCorkle, president and CEO of the Pennsylvania Food Merchants Association in Camp Hill, said the bill currently would carve out about 820 grocery licenses, not enough to allow the more than 5,000 grocery outlets throughout the state, to sell wine.

The bill also leaves convenience stores out of the equation. McCorkle would like to see more grocery licenses, and licenses for convenience stores.

Then there are the consumers. Everyone says they want to be able to buy wine in the supermarket or a six-pack at the local beer distributor.

But when you boil down the issue, it’s not at the top of most voters’ agendas.

In a recent Franklin & Marshall College poll 47 percent of voters said they support selling off the state-run stores to the private sector, a drop from 53 percent in February. In addition, the number of those who say they strongly oppose privatization is 31 percent, up from 24 percent in February.

“I think in the last couple of months there is less support for liquor privatization. There has been a long debate and it centers around a lot of things,” said poll director G. Terry Madonna.

So will this be the year Pennsylvania uncorks a privatization deal?

Senate Law and Justice Committee chairman Sen. Chuck McIlhinney, a Bucks County Republican, has said he will introduce his own bill this month. But he has left many scratching their heads with his shifting positions and conflicting statements.

“Sen. McIlhinney is trying to navigate the turf wars among a variety of interest groups … all while appeasing his own constituents and hanging onto to his seat,” said Ed Uravic, a Harrisburg University of Science and Technology professor who spent 20 years as a GOP legislative aide in Harrisburg and Washington.

“He could be dragging his feet, or he could be making a political move,” Uravic added.