Thursday, July 28, 2011
Associated Press
HARRISBURG
The leading advocate of privatizing liquor and wine sales in Pennsylvania pitched his plan to a key legislative committee Wednesday, even though it was not yet officially a bill, signaling the long road that lies ahead.
House Republican leader Mike Turzai was armed with charts and facts about his plan as he testified alone before the House Liquor Control Committee. Several dozen state-store employees, all wearing bright yellow union T-shirts, attended the crowded hearing.
Turzai, who also fielded questions from the panelists, said his proposal would enhance customer convenience, generate a one-time windfall of as much as $2 billion for the state treasury and strengthen enforcement of state alcoholic-beverage laws.
“Change is always difficult, but that doesn’t mean we shouldn’t do it,” the Allegheny County lawmaker told the committee.
“If ever there’s an opportune time to show that we are not doing business as usual in Pennsylvania and that we are actually focusing on our constituents and our consumers and can do some good things as a result,” he said, “now’s the time.”
Democrats on the panel challenged some of Turzai’s proposals, such as his claim that the state would take in the same amount of tax revenue whether it is collected by state employees or hundreds of private entrepreneurs.
“You believe that, when it goes private, that we’ll get all those taxes, we won’t have to hire any new people at the Department of Revenue?” asked Rep. Dante Santoni of Philadelphia, the committee’s ranking Democrat. “Have you checked with the state treasurer or state attorney general to see what losses we might experience under that system?
Privatization of liquor and wine sales has been proposed before by Republican governors, only to be scuttled by the Legislature.
GOP Gov. Tom Corbett, who took office in January, has endorsed the concept but so far, not Turzai’s proposal, which was still in draft form Wednesday. Turzai said he expects it to be introduced soon.
Corbett spokesman Kevin Harley said his boss is awaiting a report from a consultant, Public Financial Management Inc., that he said is analyzing the implications of several approaches to privatization.
“Once that’s complete, we’ll look at it, and make a determination of the best course to follow,” Harley said.
The committee plans to have at least three more hearings on the issue, said its chairman, Rep. John Taylor, R-Philadelphia.
Turzai wants to replace the roughly 620 state-owned liquor stores with twice as many stores in 750 retail zones across the state. Businesses would bid on the 1,250 retail licenses that Turzai says are likely to cost from $25,000 to more than $1 million each, depending on the size and location of the store.
The sale of the retail licenses and a smaller number of wholesale licenses would generate up to $2 billion for the state treasury, Turzai estimates.
His plan also would eliminate the 18 percent “Johnstown Flood tax” — which has been on the books for 75 years and originally was intended to help the city for which it is named recover from a devastating 1936 flood — and the Pennsylvania Liquor Control Board’s 30 percent markup. It would replace them with a per- gallon tax that would range from $8.25 to $12 depending on the type of beverage and its alcohol content.
A scaled-down state liquor board would remain to issue licenses, enforce laws and oversee alcohol-education programs.