HARRISBURG - Jobs are going unfilled. Morale is low. Even the chairman says he doesn't believe the state should be in the booze business.

Yet the agency that runs Pennsylvania's liquor stores says that even in the face of Gov. Corbett's efforts to privatize its retail and wholesale operations, it is more productive than ever.

Such was the testimony Monday by top officials at the Liquor Control Board budget hearing before the Senate Appropriations Committee.

LCB brass said they have been turning more than $100 million a year in profit for the last several years - and kicking more than $80 million of that into the state's cash-strapped coffers.

Yet LCB board member Robert Marcus contended that the agency is operating on a scaled-down staff while the Corbett administration refuses to sign off on filling key vacant positions.

"We are not permitted to hire," Marcus told the committee during a hearing before an audience dotted with the yellow T-shirts of the labor union that represents state wine and spirits store clerks. "The governor's office won't approve them."

As for all the privatization talk emanating from the Capitol these days, Marcus said: "We have a morale issue when you have people in the legislature and the governor's office continually talking about getting rid of [LCB] jobs."

The testimony was the first public sign that some officials at the agency may start fighting back as the governor and fellow Republicans in the House work on a measure to auction off the state's 600-plus wine and spirits stores to the private sector.

Though a bill has yet to be introduced, Corbett has said privatizing the system that has been in place since the end of Prohibition would reap more than $1 billion, which he proposes to distribute to public schools over four years to help pay for early childhood education, school safety, and other initiatives.

Reached for comment Monday, Corbett spokesman Kevin Harley noted that the LCB is an independent agency that controls its own finances and hiring, and said he was not aware of any open positions that the administration had refused to fill.

Marcus, a Republican whose tenure on the board predates Corbett's governorship, painted a different picture. He said roughly 250 positions, many of which he described as essential, remain unfilled. Meanwhile, he said, the agency has run into stiff resistance in the House as it has tried to push for changes that would make the State Stores more consumer-friendly - such as allowing customers to receive direct wine shipments at their homes, and permitting more stores to open on Sundays and for longer hours.

The latter alone would increase profit by at least $10 million annually, the LCB estimates. Instead, the agency has focused on making changes in things it does control, such as location, by moving wine and spirits stores to sites next to supermarkets or beer distributors to give customers something approaching one-stop shopping.

Even LCB Chairman Joseph "Skip" Brion, a Corbett appointee who again acknowledged Monday that he does not believe the state should be in the business of selling alcohol, expressed some frustration at the lack of legislative action.

"I don't believe we should be in the liquor business," Brion said. "But by the same token, we are in the liquor business. So my attitude is, make it the most profitable and the best that you can."

The LCB officials had a receptive audience. Many senators, including leaders in both parties, have made little secret of their belief that a wholesale sell-off of the system is not necessary to improve customer convenience, and have said that allowing the state agency to modernize and be more competitive is a preferable route to take.

Senate Appropriations Chairman Jake Corman (R., Centre), while noting that there is an inherent conflict between having the state in charge of both selling liquor and regulating it, complimented LCB officials.

"You are doing a fabulous job running it," Corman said.

The agency's leaders may get a chillier reception Tuesday morning in the House, where Republican support for privatizing the system is stronger. LCB officials are scheduled to take questions from the Appropriations Committee.

Contact Angela Couloumbis at 717-787-5934 or acouloumbis@phillynews.com, or follow on Twitter @AngelasInk.