A state budget deficit of up to $1.4 billion could open the door to GOP Gov. Tom Corbett’s top priority — selling the state liquor stores. And while it’s also been the No. 1 issue for House Majority Leader Mike Turzai, R-Marshall, Senate Republicans, incredibly, have stood in the way.
Privatizing the state stores struck a raw nerve with some GOP senators sensitive to union interests (store clerks are unionized). There also was a fear that in large rural districts, state-operated stores wouldn’t be replaced by privately run stores. In other words, constituents would have to travel too far to buy wine or liquor.
Liquor privatization also was tied to transportation funding; the Senate wanted new revenue for roads, bridges and mass transit. But House Republicans were reluctant. Nothing is ever dead in the state Legislature, however.
As of June 30, when liquor store divestiture was bound with legislation for transportation revenue, both stalled. A $2.4 billion transportation plan won approval by the General Assembly last month. It finally was decoupled from liquor.
Will we now see a full-blown plan selling off the state stores at once? Very doubtful. It might not happen at all. But it’s got a shot now that coming up with the need for new revenues is becoming the priority.
There are plenty of other options, legalizing more gambling such as keno and pension reform among them. Full Medicaid expansion is another possibility. But selling the state stores long has been a popular notion with most Pennsylvanians (though, in fairness to the opposition, it’s not a burning issue). That said, the dynamics of state store privatization could change shortly.
A fiscal argument against it is that it’s no instant jackpot; it would take months, even a year or more, to set up the sale of new liquor licenses and close state-owned stores. A political argument against it is the complication of a powerful union with a lot of money and a lot of clout — the United Food and Commercial Workers — battling it at every turn.
Most likely it becomes a Plan B solution for a hybrid mix of more private wine, liquor and beer sale options while reducing the number of state-owned stores. It’s already trending that way at grocery stores.
Opponents of privatization argue it would be jeopardizing a sure thing — the money the state can count on annually from state liquor store profits. Proponents argue that private business can sell anything better than government.
More guarantees for laid-off state store workers could help seal a deal.
Avoiding a state tax hike is what puts liquor store divestiture in play. Cutting education and welfare, the usual suspects, is likely off the table with Corbett running for re-election.
Source: Pittsburgh Tribune-Review