A legislative panel on Monday endorsed a revamped version of Gov. Tom Corbett’s liquor privatization bill that would give existing beer distributors first crack at liquor and wine licenses and expand the sale of wine in grocery stores.
In a 14-10 party-line vote, the House Liquor Committee backed a bill that would potentially phase out the existing state-controlled stores while the number of private operators grows.
State Rep. Kurt Masser (R-107), who is on that committee, was one of those 14 votes and noted his opinion has never changed; he believes the government should not be in the booze business.
“The government should focus on core government services,” he said. “Even in my days as county commissioner (in Northumberland), I said the government should not be in the nursing home business.”
Both the GOP governor and Rep. John Taylor, the Philadelphia Republican who chairs the committee, called approval of the amendment a “first step” that would lead to scrutiny of the complicated legislation not only on the House floor but in the Senate.
“We have a long way yet to go, but their vote today starts us down the path to do something truly historic” for Pennsylvanians, said Corbett, whose efforts to privatize certain government functions also includes the management of the Pennsylvania Lottery.
Minority Democrats pushed unsuccessfully for additional public hearings before any committee vote.
“I just think there are way too many questions on this particular bill,” said Rep. Paul Costa, D-Allegheny, the panel’s ranking Democrat.
Under the bill, the state’s 1,200 beer distributors would be given one year to decide whether they wanted to buy a license to sell wine, a liquor license or both. Fees for wine licenses would cost as much as $37,500 and as much as $60,000 for liquor licenses, but the distributors could opt to pay off that expense over four years for an additional 5 percent.
While there are fewer licenses under the committee’s proposal compared to the governor’s proposal, Masser said he is glad the existing beer distributors would be given first dibs to become “one-stop shops” for beer, liquor and wine.
“I was worried about our existing small businesses and whether they would be able to survive. If they want, they can grow and expand their businesses. There’s a number of distributors excited about this proposal,” he said.
After that, the remaining licenses plus as many as 600 additional ones at the discretion of the Pennsylvania Liquor Control Board would be offered to other buyers on a first-come-first-served basis and at much higher fees.
The 600 state stores would be gradually reduced while the number of licensees in each county grows. For the thousands of state employees who would lose their jobs, the bill provides preferential treatment for other state hiring, grants for additional education and a two-year tax credit for private employers that hire those workers.
All state stores in any one county will be closed when the total number of alcoholic-beverage licenses and the proposed new wine license for grocery stores reaches twice the number of state stores. If the number of state stores falls below 100 statewide, they all would be closed.
If grocery stores obtain a restaurant license, requiring them to have a separate eating facility, they also would be allowed to sell beer in addition to wine.
Corbett spokesman Kevin Harley said license fees under the latest version of the bill would generate most of the $1 billion that Corbett had earmarked in his bill for special grant program for public schools over four years.
The governor’s original plan, sponsored by House Majority Leader Mike Turzai, called for closing the state stores and auctioning off the 1,200 wine and liquor licenses to businesses that included big-box retail stores, grocery stores, beer distributors, convenience stores and pharmacies.
“The governor always said that his bill was a starting point,” Harley said.
The bill will be sent to the House for a vote. If it passes, it will be sent to the Senate for a vote.
“Time will tell if it passes,” Masser said. “We tried it under two other governors and it didn’t make it. We’ll see if the votes are there or not.”