Pennsylvania House votes to privatize wine and liquor sales

HARRISBURG - The state House of Representatives took a historic step Thursday night, passing a bill that would privatize the sale of wine and liquor in Pennsylvania for the first time since Prohibition.

After seven hours of fiercely partisan debate, the House voted, 105-90, to approve the measure, which calls for gradually selling off licenses to private entrepreneurs, starting with beer distributors, and eventually closing the 600-plus State Stores.

All but five Republicans backed the bill. Every Democrat opposed it.

"Today, the House of Representatives made history," declared Gov. Corbett, who had favored a bolder plan but who lobbied hard for the revised version, contacting GOP lawmakers personally. "Never before has a liquor-privatization bill passed either chamber of the legislature."

Still, as every elected official knows, history can be rewritten, and now the bill goes to the Senate, where it is sure to face additional revision if not resistance.

A top Republican in that chamber predicted as much even before the House voted. "I don't think anyone expects the Senate to simply take up the House bill and move it to the governor's desk as is," Majority Leader Dominic Pileggi told reporters Thursday.

Though he would not predict what the Senate version could end up looking like, Pileggi (R., Delaware) said it might take time because a privatization measure "is not something that has been an item of active interest and discussion in the Senate."

Nevertheless, Thursday's vote was significant. As Corbett said, never before had any privatization bill gotten this far in the legislative process, and not for a lack of trying. Several Republican governors have tried and failed at or near the starting line.

"This is win-win-win," trumpeted Majority Leader Mike Turzai (R., Allegheny), the House's most vocal supporter of privatization.

The bill the GOP-controlled House passed Thursday is a toned-down version of the plan Corbett had proposed. It calls for gradually selling off licenses to the private sector, and would give beer retailers first shot. After that, other businesses, including supermarkets and big-box stores, would be able to enter the liquor arena.

State Stores would be phased out, and some in sparsely populated counties could remain open.

Democrats condemned the bill as bad morally and worse fiscally, warning during Thursday's debate that increased access to alcohol would lead to increased drinking and the social ills that come with it. They said privatization would cost 3,500 State Store clerks their jobs.

And they disputed Republican estimates that the proposed selling of liquor licenses would generate $800 million, which Corbett has said he wants to direct to public schools for early-childhood education, school safety, individual learning, and science, technology, engineering, and math programs.

Democrats also argued that the state would lose out on $170 million annually if the Liquor Control Board was privatized, in part because the LCB would no longer be sending its profits to state coffers. And they called the bill confusing, saying it sets up a system that would still force customers to travel to different places to get the products they want.

House Minority Leader Frank Dermody (D., Allegheny) said the bill's licensing definitions were harder to get through than War and Peace. "It truly is March madness," he railed.

"Whether it's from the perspective of the taxpayer, whether it's from the perspective of the consumer . . . this bill is a loser and should be voted down," Rep. Brendan Boyle (D., Phila.) said during the debate.

Indeed, the path to buying liquor won't always be clear.

Under the bill, beer distributors could continue to sell just beer, or they could also apply for a license to sell wine, liquor, or both along with suds. Because not all will opt to sell the same products, consumers will not be guaranteed the convenience that privatization supporters claim it will deliver.

Supermarkets could sell up to 12 bottles of wine, but not beer, unless they had a special permit. That permit would require them to have a seating area where customers can eat.

Restaurants and hotels, too, could buy different licenses, but most would be allowed to sell only up to two six-packs to take out. They could sell wine and spirits, but only if those bottles were open - presumably after diners order a bottle with a meal.

"Why would you ever vote for something that ludicrous?" asked Rep. Mike Sturla (D., Lancaster), who openly scoffed at the proposal.

But supporters, all Republicans, scoffed right back. They said the LCB had an inherent conflict - regulating alcohol while trying to promote its sale - and suggested the oft-criticized board does neither well.

And they argued that Pennsylvania will not fall apart if it becomes the 49th state to allow people to buy alcohol in a private establishment. Utah is the only other state with a government that runs both the wholesale and retail liquor operations.

"God forbid an individual in Pennsylvania be allowed to walk into a store and buy beer, wine, and liquor. The Earth would come to a halt if we allowed that to happen. Can you imagine we would give that kind of freedom of choice?" said Rep. Warren Kampf (R., Chester).

He added: "I support this legislation because I think it starts treating Pennsylvanians like the adults that they are."

The five Republicans who crossed the aisle to vote no were Gene DiGirolamo, Frank Farry, and Paul Clymer of Bucks County; Tom Murt of Montgomery County; and Mark Gillen of Berks County.

As for the measure's fate in the Senate, Pileggi dodged the question of whether his caucus preferred modernizing the system to selling it off. He said he didn't subscribe to labels. Even so, some Senate leaders have made no secret of their preference for modernizing the State Store system over ditching it.

Pileggi has said he thought it was possible to give customers the convenience and choice they want without selling off the system. Still, he said he expected to hold hearings on the bill in the next 30 to 60 days.

What changes senators will make remains a question. But this might give some idea of the direction they could take: Sen. Chuck McIlhinney Jr. (R., Bucks), who chairs the committee that oversees the LCB, has a bill that would, among other things, let beer retailers buy a special license to sell wine and liquor; it would keep the state in the wholesale business of buying wine and spirits.

"We need 26 of our 27 members in our [GOP] caucus, at a minimum, to pass a bill," Pileggi said, "so there is a very practical consideration ahead about what proposal would 26 members . . . support."

He added: "And we haven't had this discussion yet."

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