March 26, 2017
The Daily Item
HARRISBURG — A year after Pennsylvania freed the six-pack, is it time to liberate the state’s vodka and whiskey too?
House Republicans are preparing to make a new push to further dismantle the state government’s role in the liquor business. The head of the House liquor control committee on Friday introduced legislation to allow privately-run liquor stores.
The plan would create a retail liquor store franchise license to allow private stores to sell wine and spirits, state Rep. C. Adam Harris, R-Juniata County, said in a memo to lawmakers.
In addition the original license fee, the plan would require liquor stores to pay a yearly fee based on sales.
“This will not only provide for much needed revenue as we begin budget negotiations, but will also create a continuing stream of revenue,” Harris wrote in the memo.
It’s part of a broader effort by Republicans in the House to build on the momentum created by last year’s liquor reforms. A separate bill, which has not been introduced, would “free the wine” by allowing all grocery stores to sell wine, not just those locations with cafes.
That legislation, sponsored by Speaker Mike Turzai, R-Allegheny County, would allow groceries to stock wine in the shelves in grocery aisles and be paid for at the cash registers with the rest of the groceries, instead of in segregated areas. Additional details about that measure were not immediately available Friday.
But under Harris’ plan, liquor store licenses would be awarded to counties at a rate of 1 per 6,000 residents. But no county would get fewer than 15 licenses, according to a copy of the legislation provided by Harris.
Under the plan, the state would charge license fees based on the size of the store, starting at $100,000 for small stores and up to $500,000 for the largest stores.
Stores would be allowed to be open from 9 a.m. to 11 p.m., except on Sundays. To keep Sunday hours of 9 a.m. to 9 p.m., the store would need to pay the state an extra $5,000 fee. The law also would require that stores offer at least 200 different liquor products in large counties and at least 100 different products in small counties.
The move comes less than a year after Gov. Tom Wolf signed into law the most ambitious reforms to the state’s liquor laws since the end of Prohibition. The most noticeable changes allowed many grocery stores and convenience stores to begin selling wine, along with beer. They also gave beer distributors the right to sell beer in smaller quantities and the state Liquor Control Board the green light to keep more state stores open on Sundays and on legal holidays.
State Rep. Frank Burns, D-Cambria County, said that Republicans are making the new push for private liquor stores to exploit the pressure on the Legislature to balance the state budget without raising taxes.
“I suspect this is the same bill that’s failed multiple times,” Burns said. “They are just trying again because they’re hoping that the desperate need for revenue” will overcome resistance to the bill.
Burns said the state could generate more money by allowing bars to offer video gambling terminals.
While Republicans control both chambers of the Legislature, Wolf, a Democrat, doesn’t appear eager to embrace the plan should it land on his desk.
“Gov. Wolf’s priority is allowing the historic reforms enacted last year to be in place,” said Wolf spokesman J.J. Abbott.
“He is working diligently to ensure the (Liquor Control Board) is doing everything they can to maximize returns and consumer convenience based on those reforms.”
Wendell Young, the president of Local 1776 of the United Food and Commercial Workers union, which represents state store employees, echoed the governor’s sentiment, saying it’s too soon to make another dramatic change to the state’s liquor system.
Young and other critics say the plan will cost the state money as revenue that now pours into state coffers will end up in the bank accounts of the businesses running the liquor stores.
“Pennsylvania generates among the highest amounts of revenue per gallon of wine and spirits” in the nation, Young said. “That’s a good result for taxpayers.”
Decisions based on money
Proponents of privatization argue it’s not a good result for Pennsylvania residents who want to buy wine and liquor. And the added costs of government benefits for state store workers only make the prices in the state stores less competitive.
“The salaries, health insurance, retiree health insurance and defined benefit pensions for the unionized government retail wine and liquor stores are far more generous than what private sector retail stores offer,” said state Rep. Brad Roae, R-Crawford County. “It’s great for the employees but the public pays higher prices.”
Other House Republicans expressed general support for the idea of allowing private stores to sell liquor.
State Rep. Fred Keller, R-Snyder County, said that he’s uneasy about the fact that the state seems to be making decisions focused on what will make money for state coffers.
“We cross a dangerous threshold when our litmus test is whether it generates revenue,” he said. Still, he would likely back the bill because he doesn’t believe the government should be in the business of selling booze, Keller said.
State Rep. Tedd Nesbit, R-Mercer County, said he’s likely to support the idea, but he expressed some reservation about how many locations might be allowed.
“Generally, I don’t think the state should be running a business like liquor stores, but we have to tread carefully, we don’t need a liquor store on every corner.”
Harris said there is room for the state to add more liquor store locations.
“In many cases, our rural areas suffer the greatest burden of this low density of outlets, forcing our citizens to travel great distances to purchase wine or spirits,” Harris said in the memo seeking support for his legislation.