Officials Ponder Privatizing State Liquor Stores
Local legislators are concerned how liquor and wine sales would be regulated
Gov. Tom Corbett has said privatizing the state liquor stores is a priority during his first term, but local legislators are unsure if they could support such a plan unless the state reaps billions from the sell-off.
Many states allow wine and liquor to be sold in grocery and drug stores, but the Pennsylvania Liquor Control Board, or PLCB, does not allow sales outside of state-controlled Wine & Spirit stores. Initial reports estimated the state could receive up to $2 billion from selling licenses to private businesses, although officials have since backed off that number.
“We have to look at all the aspects of it,” said state Rep. Nick Kotik, D-Robinson. “Right now it’s a big money-maker for the Commonwealth and (the PLCB) has made a good-faith effort to modernize.”
He said some state Wine & Spirit stores are not as profitable because they are located in rural areas, but are needed to serve residents who might be neglected by the private sector. Kotik added that he thinks the system is working well and is concerned that privatizing alcohol sales could mean there is “a liquor on every street corner and maybe manned by 16-year-old kids.”
“How do you enforce all of that? This has been tried before,” Kotik said. “I’m open minded, but you have to show me how the privatized system will be better than what we have now.”
State Sen. Wayne Fontana, D-Brookline, agreed that there should be government oversight on alcohol sales. He thinks the state does a good job balancing the demands between city, suburban and rural areas.
“(The PLCB is) moving forward with a lot of plans on how to make it more convenient,” Fontana said. “You’re not going to be able to control things as much by selling them off.”
He cautioned that selling licenses off to the businesses would be a one-time windfall and is worried how quickly that money would evaporate. He wants to make sure the state doesn’t lose an asset that has proven to be a consistent money-maker.
“The money is not going to solve our problems,” Fontana said. “It’s going to be a band-aid, and then it’s gone.”
Meanwhile, other state officials think privatizing the system will lead to better choices for consumers. State Rep. Mark Mustio, R-Moon, said he would like more choices, but is not sure if that might have a “ripple effect” on the sale of beer.
“It’s going to be a great debate. It certainly will be lively,” Mustio said. “Think about it from a convenience standpoint. If they should be sold privately, does that mean it goes into the grocery stores?”
He said the debate might hinge on that $2 billion estimate and reoccurring revenue. Mustio said there is some division within his Republican caucus over the idea, and he acknowledged that the PLCB has made progress in recent years.
“The state stores have added significant improvement since I was a kid, but there is a long way to go,” Mustio said.
Some local legislators are leery about opening liquor sales to private businesses and how that might impact underage purchases of alcohol. State Rep. Matt Smith, D-Mt. Lebanon, thinks the amount of potential revenue ultimately will drive the debate.
“I’m not someone who’s going to turn my back on any option, but I get concerned about … how many licenses are we actually giving out,” Smith said. “I don’t think we want a liquor store on every corner. I think you have to have a balanced approach.”
State Sen. John Pippy, R-Moon, plans on waiting to see what the state House does before forming a concrete opinion. He said there are numerous moving parts that will impact the debate over the coming months.
“While philosophically, I don’t think government should be selling alcohol, any plan we consider shouldn’t cost us money,” Pippy said. “I think there are very solid points on both sides. It will be a very significant debate.”