Gov. Tom Corbett on Wednesday unveiled an ambitious proposal to get Pennsylvania out of the liquor and wine business by replacing hundreds of state-owned stores with twice as many private outlets and allowing beer and wine to be sold at a wide range of stores.
"I want Pennsylvanians to enjoy the same convenience that virtually every other American today has," said Corbett, who unveiled his proposal at a news conference.
Several local state lawmakers said they have yet to read the details of the plan but agree with Corbett's privatization efforts.
Corbett said the plan would generate an additional $1 billion in revenue over several years. He said the money would be used to create a proposed block grant program to help finance certain public school projects.
"Conceptually, I'm with (Corbett)," said State Sen. Mike Waugh, R-Shrewsbury. "I always believe we should explore the possibility of putting our liquor and beer and wine sales on more of a consumer-oriented private industry type of basis."
Waugh said he thinks Corbett is on target with plans to use privatization proceeds for education funding.
"Revenue generated by wine and spirits stores go into the general fund where we get funds for education," he said. "We're often struggling to find revenue for education, so I would support using (privatization funds) for education funding."
Another view: Rep. Ron Miller, R-Jacobus, said he supports the idea of the state getting out of the liquor business and agrees with Corbett's efforts to generate additional education funds.
"But if it's a one-time infusion from the sale, that's where I have concerns," he said. "We don't want to end up in a money situation like we had with the stimulus funds. When it ran out, the state couldn't raise enough money to keep it up."
Like Waugh and Miller, State Sen. Lloyd Smucker, R- West Lampeter Township, said he generally agrees with the idea of privatizing liquor stores.
"I think the (liquor business) is something that could be done more efficiently privately than by the government," he said. "There's a conflict existing today between distribution of liquor and the enforcement side."
York City School Board President Margie Orr said she would support any funding that would steer money toward York City schools, which face a $10 million deficit next year.
"Sure. I'm not going to say no to money," Orr said.
But not everybody's on board with the proposal.
Sen. Rob Teplitz, D-Dauphin and York counties, said he's dumbfounded at why Corbett is determined to get rid of the only two areas of state government that generate big money: lottery and liquor.
He said he doesn't believe the governor's plan will actually compensate for the loss of more than $500 million per year from the liquor stores, a "steady, stable funding stream we need to balance a budget."
"I don't think anyone, if we were designing a plan from scratch in 2013, would design the system we have now, but it exists and there are many positive aspects to it," he said. "It brings in money and keeps alcohol out of the hands of minors. I don't see the benefit of dramatically changing the system."
The system does need to be modernized, he said, and and the state's Auditor General's office has already identified ways to improve the system.
The plan: In Corbett's plan, most of the revenue, a projected $575 million, would come from the sale of wholesale liquor licenses.
An additional $224 million is anticipated from the auctioning of 1,200 wine and liquor licenses by the state's 67 counties, with 800 reserved for large stores and 400 for smaller ones. Those licensees would be required to set up separate stores to sell wine and liquor.
Other revenue would flow from the sale of beer and wine licenses to retailers, including big-box stores, grocery stores, pharmacies and convenience stores. Beer distributors, which currently only sell beer by the case, could obtain an enhanced license that would allow them to sell in smaller quantities.
The plan calls for shutting down the 620 existing state stores, a move strongly opposed by employee unions.
About 3,200 state store employees could lose their jobs over the next four years, according to state spokesman Eric Shirk.
"So we're talking about something happening periodically, not all at once," he said. "There are more than 600 stores. In this plan, the state would auction off 1,200 licenses. There would be opportunities for people to find jobs. With more places getting licenses, there's a net growth in jobs through this plan."
The transition to a fully privatized system could take as long as four years. However, the closing of the state stores would begin within six months and be completed in the second year, according to the administration.
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