Pa. Senator: I’ll Introduce New Liquor Privatization Bill

Scott Wagner is circulating a memo seeking co-sponsors for a bill that would eliminate state stores. A privatization bill passed the House in February.

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Scott Wagner, who last year won a special election to the Pennsylvania Senate as a write-in candidate, is attempting to do what many politicians have tried to do before and failed: Privatize the state’s liquor system.

On Tuesday, Wagner began circulating a co-sponsorship memo saying he would be introducing legislation that would privatize the liquor system “in the near future.”

Wagner, a Republican who has spent heavily supporting pro-business candidates in the past, said that “private enterprise always does a better job selling a product than government” and the current state store system “is wholly inadequate for Pennsylvania consumers.”

His memo continued:

Pennsylvania’s wine and spirits business is financially unsustainable. In the summer of 2014, an internal PLCB memo stated that “the long term financial health of the state store fund, including the annual $80 million profit transfer to the General Fund is in jeopardy as cost growth for PLCB operations and the State Police enforcement is outpacing the revenue growth from the sale of wine and spirits.”

Further, a recent internal document from the Commonwealth’s Budget Office predicts that the PLCB State Store Fund will lose more than $10 million in FY 2017-2018 and the loss will balloon to $125 million in FY 2019-2020. These fiscal realities make changing the present PLCB system a legislative priority. The numbers were validated by the PLCB earlier this year.

Of course, it was just 18 months ago that the LCB reported record state store numbers in the 2012-13 fiscal year. The LCB and state negotiate the amount to be transferred to the General Fund each year.

Wagner says Pennsylvania loses hundreds of millions a year from border bleed — customers near the border who travel to other states to purchase wine and spirits.

Per a release, his bill would not create any new licenses. Instead, existing liquor licensees would be able to buy an amended license that would allow them to serve wine and liquor. Distributors could sell an unlimited amount, while places with restaurant licenses would be able to sell up to 3 liters of wine and/or liquor per transaction.

The wholesale system would also be privatized, and state stores would be gradually phased out. The bill would also have “language to assist displaced PLCB employees, such as additional training and incentives for private retailers to hire these employees.” Displaced means “laid off,” obviously.

If passed, Wagner says his bill would generate $600 million for the state this year. “The bottom line is,” he said, “we need pro-consumer legislation to get Pennsylvania out of the spirits and wine business and make it like the beer business.”

Meanwhile, a Franklin & Marshall College poll finds 49 percent of Pennsylvanians strongly or somewhat support privatizing liquor stores (it hit a high of 55 percent in 2002). Among those polled, 38 percent believe the stores should be sold off, 31 percent say they should be modernized and 26 percent say they should be left alone. (Six percent aren’t sure.)

Earlier this year, a House committee voted 15-10 along party lines to privatize the state’s liquor system. It then passed the full House.

Gov. Tom Wolf has vowed to veto any privatization bill. He favors modernizing it, which would bring expanded hours, home delivery and other conveniences to Pennsylvania consumers. The debate is now largely a partisan one in Harrisburg, with only a few Republicans voting against the liquor privatization bill in the House vote. “No one has yet made the case to me as to why it would be better for the people of Pennsylvania,” State Sen. Daylin Leach told Montgomery Media last month. “We know it would toss a lot of high paying union jobs to be replaced with a lot of lower paying nonunion jobs.”

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