April 5, 2017
HARRISBURG — In a state Capitol room full of union members opposed to the legislation, the House Liquor Control Committee on Monday approved two bills whose sponsors believe are building on the liquor reforms of Act 39 of 2016.
Near party-line 14-12 committee votes approved both House Bill 438, which would allow restaurants and hotels to sell up to four bottles of spirits, and House Bill 991, which could result in 2,000 retail stores legally selling wine and spirits in addition to the 600 state liquor stores.
While winning approval, the sponsors of the bills, Rep. Mike Reese, R-Westmoreland, for HB438 and Rep. Adam Harris, R-Juniata, and the majority chairman of the House Liquor Control Committee, for HB991 didn’t offer an estimate of the economic impact of liquor privatization.
The lone GOP “no” vote on both bills, Rep. Scott Petri, R-Bucks, drew up his own projections for HB438.
Petri said the initial license fee of $2,000 for a spirit expanded permit, allowing restaurants and hotels to sell up to four bottles, or 3,000 milliliters of spirits for off-premise consumption, is a “give-away of an asset this commonwealth owns. … I think these licenses are worth much more in the neighborhood of $80,000.”
Wendell Young IV, president of Food and Commercial Workers union Local 1776 — which represents state store workers — also spoke on the license fees being too small, emphasizing that he does not believe that implementing these bills as they are will be financially sound. He also said he has yet to see any analysis that shows liquor privatization produces lower liquor prices.
“Our prices are lower than more than 40 states around the country, including our border states,” said Young, who argued West Virginia and Iowa lost significant amounts of profit for decades following privatization.
Shauna Boscaccy, executive director of the House Liquor Control Committee, did offer a projection regarding HB991 on what privatizing retail stores to sell wine and spirits would bring to the state, when asked by Petri.
“Assuming that 40 percent of licenses are sold in the first year and based on the fencing (the distance a retail store has to be away from a state store) and the restrictions in there, it would bring in an excess of $300 million.”
Petri was not satisfied with this, though, saying, “I can’t vote in favor of giving something away to private industry that is an asset to the taxpayer unless they are going to be made whole.”
Young echoed Petri, claiming, “This amounts to a subsidy to the private sector.”
Harris said he was inspired to write the bill because of the limited access that residents of Perry County, a neighbor to his district, have to purchase liquor, emphasizing there is only one state store in Perry County (in Duncannon), which is why this bill would help serve the rural areas of the state. There had been a state store in Newport, Perry County, but it was closed.
Democratic members, although concerned with the financial aspects of the bills, were more vocal regarding the impact to their communities.
Kevin Boyle, D-Philadelphia, identified the two bills as “self-privatization of the state liquor system” and said that the majority party is “piece-mealing” privatization, and this is the latest step in unraveling a hugely profitable liquor system for the taxpayers of Pennsylvania. Regarding the concern of increased crime at corner stores, coined “stop and gos,” Boyle went as far as calling it “irrational” to pass these into law.
Boyle explained that, including taxes, the state-run liquor system generates $600 million for the General Fund.
Rep. Marie Donatucci, D-Philadelphia, pressed the issue of increased crime due to the process of liquor privatization needing increased enforcement.