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Pa. House suspends debate on liquor privatization

By 69 News, (follow: @69news), news@wfmz.com
Published On: Jun 12 2012 05:02:30 AM CDT
Updated On: Jun 12 2012 07:11:13 AM CDT

HARRISBURG, Pa. -

Pennsylvania's House of Representatives spent three hours Monday night debating a proposal to end nearly 80 years of state control over liquor and wine sales and sell the business to private operators, only to go home without taking a vote.

House Speaker Sam Smith, R-Jefferson, suspended the debate shortly after 10 p.m. until at least Tuesday.

It was the first time since the present system was established in 1933 that privatization has been debated on the floor of the Legislature, House officials said, and more than 250 amendments were still pending as lawmakers interrupted their discussion of the first one.

Proponents said Majority Leader Mike Turzai's proposal would provide the convenience and lower prices consumers want, while opponents warned it would throw thousands of state employees out of work while failing to placate constituents who find better deals in neighboring states.

"Since Gov. Thornburgh, this state has been talking about moving into the 21st century," yet the state-controlled system remains intact, Turzai said as he opened the discussion shortly after 7 p.m. "Why is PA so anachronistic?"

Turzai, whose original privatization bill was scuttled by a committee in December, advocates replacing the present network of 620 state-owned stores with as many as 1,600 privately owned ones.

Under the amendment, the more than 1,000 beer distributors would get the first shot at buying the retail liquor and wine licenses in what Turzai described as an attempt to help distributors facing growing competition from supermarket chains selling six-packs that distributors cannot now sell.

Distributors that buy the licenses would become the only locations in the state that offer one-stop shopping for beer, wine and liquor. However, industry officials say the countywide license prices that are expected to exceed $800,000 in some Philadelphia suburbs may be more than they can afford.

Licenses not sold to distributors would be sold in a public auction to other businesses, Turzai said.

Distributors, currently limited to selling beer by the case or keg, would be permitted to sell six-packs as well, while supermarkets and taverns would be permitted to sell more takeout beer under the amendment.

Turzai and his allies cited a potential $1 billion-plus windfall from privatization. They said polls consistently show strong public support and predicted the change could create "family-sustaining jobs." A companion bill would tap that extra revenue for highway and bridge repairs, he said.

Rep. Kate Harper, R-Montgomery, said Pennsylvanians "have been around. They've been to New Jersey. They've been to Delaware. They know that states just like ours don't have state-run alcohol stores. ... Our constituents want us out of the business."

The legislation is strongly opposed by the union representing thousands of state-store workers on grounds that they can do a better job of collecting taxes, enforcing the drinking age and offering a broad product selection than private operators could.

Turzai said his proposal would provide help for displaced workers, including tax credits for companies that hire them and tuition assistance for those seeking additional education.

But Democrats challenged the accuracy of Turzai's estimate of the privatization windfall, saying it was based on an analysis of an entirely different plan, and predicted that his amendment would cause prices to increase as they did when the state of Washington recently privatized its liquor sales.

Leaders of the Republican majority in the state Senate have made clear they do not anticipate any action on privatization in that chamber before lawmakers break for their summer recess.

"Looking forward to working on Rep. Turzai's comprehensive privatization proposal in the fall," Senate President Joe Scarnati, R-Jefferson, tweeted Monday.