Corbett Announces Liquor Store Privatization Plan

Gov. Tom Corbett announced his plan to privatize the liquor system in Pennsylvania and committed $1 billion in proceeds from the process to education funding. How do you feel about the plan to privatize the state stores?

Gov. Tom Corbett, joined by state Rep. Mike Turzai, R-Allegheny County, on Wednesday announced his plan to privatize the liquor system in Pennsylvania and committed $1 billion in proceeds from the process to education funding.

Corbett said the $1 billion will be used to create the Passport for Learning Block Grant, which will provide flexibility to schools, allowing our public schools, instead of Harrisburg, to decide what their students need.

The grant will focus on four priority areas: school safety, enhanced early education programs, individualized learning and science, technology, engineering and mathematics courses and programs.

“Our proposal is part of my commitment to changing Harrisburg, streamlining
government and moving Pennsylvania forward,” Corbett said. “Our plan gives
consumers what they want by increasing choice and convenience, and helps to
secure our future by adding $1 billion in funding toward the education of our
children, without raising any taxes.”

The $1 billion in revenue will come from the three to four year process of selling the LCB: $575 million from the wholesale license process, $224 million from the wine and spirits retail auction process, $107 million from the wine/beer license
application process and $112.5 million in the enhanced beer distributor application process.

“Pennsylvania and Utah are the only two states in the country who have fully state-controlled liquor systems,” Corbett said. “Our plan sells both the wholesale and retail arms of the state-run liquor business.”

He continued: “I want Pennsylvanians to enjoy the same convenience that virtually every other American today has today. My plan gets the state completely out of the liquor business. The state will no longer be a marketer of alcohol; instead, it will now focus on its role as a regulator. It also creates an unprecedented opportunity for economic expansion for private sector employers while remaining revenue neutral for the state.”

Currently, there about 600 state stores in Pennsylvania, the governor’s plan allows for 1,200 wine and spirits stores.

During the previous decade, the state stores’ expenses have grown faster than their revenues, Corbett added.

He said his plan will offer Pennsylvania consumers greatly increased convenience and choice, because they will be able to buy the products they desire in a simpler, more accessible and more rational way. For example, consumers will be able to buy beer and wine where they shop for groceries, buy six-packs of beer at a distributor instead of being forced to buy an entire case, and buy a six-pack of beer at a convenience store.

Currently, Pennsylvania has far fewer alcohol retail establishments per resident than the average state. This proposal would allow the number of establishments to be naturally driven by the market, as it is in other states.

Corbett said his plan balances the increased amount of retailers with additional enforcement measures.

The governor’s plan calls for significantly enhanced fines for selling to minors and visibly intoxicated patrons, with penalty ranges increasing from $1,000 to $5,000 to $5,000 to $10,000. The additional money from license surcharges and increased fines will be designated for enforcement efforts of the Pennsylvania State Police, Bureau of Liquor Control Enforcement, who will see a 22 percent funding increase under this plan. Corbett also proposes a 75 percent funding increase for alcohol treatment and prevention efforts.

New alcohol retailers, such as wine and spirits stores, grocery stores, pharmacies and convenience stores must all use an ID scanner device before they can sell alcohol.

Corbett also explained that his proposal is fiscally neutral. Every dollar not returned to the state due to the divestiture of the LCB is returned to the state through restructured fees. He also noted that history in other states shows that many of the private sector jobs created will have comparable compensation.

Corbett also noted that his plan includes measures for affected LCB employees,
including tax credits for businesses that employ separated workers, educational
credits, civil service credits, individual employment plans and a multi-agency
committee to help displaced employees find re-employment.

What do you think about privatizing the state liquor stores? Leave your opinion in the comments section below.

Ed M February 06, 2013 at 03:16 AM
Part of that profit comes from the 18% Johnstown Flood Tax that is collected on all wine and alcohol sales in the Commonwealth. It doesn't show on the receipt and it has been going into the general fund for about 40 years. Doesn't it make you wonder what that money is being used for?
BennyB February 09, 2013 at 05:17 AM
I’m not sure you really understand how capitalism works in this country Roger. Without the help of the gov’t this country would not have the wealth it does. If this was truly a “free market” we would look more like a third world country. Making a list of other business for the gov’t to run is beside the point. I’m not trying to restructure society, I’m simply saying the system is in place, over all it gives the most good to the most people. So why change it? This topic isn’t a philosophical one, it’s a practical one. You privatize, and you may get more choice and cheaper prices, but we can’t know for sure till it happens. When Washington State privatized last summer they saw prices on many popular liquors go up. You also get more convenience. What you lose is $500 mill a year and 4 thousand plus, good paying jobs. Is that really worth it? If you’re a drinker that can’t get what they want then maybe. If you’re not a drinker though, why would you ever want to change it? Within two years the PLCB will have made that billion Tom is talking about. Then what, where does the money come from to make up for the $500 mill annually? We know Tommy boy won’t tax his buddies in the gas industry. Also I wasn’t trying to say that if you open a private business you automatically become rich. What I was trying to say is that the only people that will be able to afford the license will be big companies, not mom and pops.
Roger February 10, 2013 at 10:43 PM
Benny, yes, I think I do understand capitalism. In the past 45 years, I have been involved in entrepreneurial efforts, or small business ownership. Keeping the PLCB in control of retail operations has zero to do with the wealth of the Commonwealth. No, providing a list of other businesses is hardly beside the point. Like others, you make an assertion that the present system works very well, and should not be changed. If it works so well, you must have a list of other businesses that the state government should be owning and operating. Others have tried to make a list, and I am giving you an opportunity to create such a list and justify why state-managed operations would be better. You have also advanced the argument of the $500M in revenue. This is a fact, but without the split of profit/taxes, it means nothing. Taxes will remain in place. The two years mentioned is bogus, without the splits. Why is the responsibility of the state government to provide good paying jobs, ones that are directly supported by a state-managed business? Why is the big companies vs. mom and pops, an issue? Where the licenses go depends upon the auction. What is wrong with letting the free market work on this matter? If it does matter, then I return to the former question: What other businesses should it matter?
BennyB February 18, 2013 at 04:11 AM
The list is beside the point. The point is that there is a system in place that works fine. so why change it? Just like other things work fine not in being run by government. So why change it? If the tax revenue will remain the same under the privet system then the price of booze will be higher. No business has the buying power of the state.
Laughing at Trannie Fable March 13, 2013 at 03:36 PM
Worst - Comment - Ever!! So you are telling me that the state-employeed liquor store worker has been "extensively" trained to help me select my beverage of choice? That is truly funny! They are doing a "great job" if they can even point you in the right direction of the bourbon aisle, let alone what variety of red wine will pair well with my dinner. Let capitalism and the supply/demand market work - if your local liquor store doesn't carry your favorite selection, request it, if it sells they'll stock it and if it doesn't find somewhere that will. The expenses outgrowing the revenue that the governor is speaking of is in part to you wanting the state-ran store to "order it specifically for you," it is a sense of entitlement, that only benefits you and costs the state and its taxpayers more money.


More »
Got a question? Something on your mind? Talk to your community, directly.
Note Article
Just a short thought to get the word out quickly about anything in your neighborhood.
Share something with your neighbors.What's on your mind?What's on your mind?Make an announcement, speak your mind, or sell somethingPost something
See more »