HARRISBURG — A Bucks County Republican lawmaker opposed to selling off state-run liquor stores on Thursday unveiled an alternative to privatization of Pennsylvania’s market share of the industry.
State Rep. Gene DiGirolamo, R-18, Bensalem, says his seven-point plan would raise an extra $185.5 million in profit in its first year while making it more convenient for consumers to buy alcohol. That would increase the total projected annual profit to more than $300 million, DiGirolamo said.
The proposal would allow more state stores to open on Sundays with expanded hours, provide more flexibility over pricing, and speed up the state’s process for reviewing leases — all changes the Pennsylvania Liquor Control Board has urged the state Legislature to make.
The alternative plan centers around expediting efforts to locate state-run wine and spirits stores within supermarkets and large retail outlets, a concept similar to a Starbucks outlet or private bank operating inside a grocery store.
DiGirolamo’s plan resembles pieces of a stalled bill introduced last March by State Sen. Jim Ferlo, as well as other so-called modernization proposals that have been floated in the Legislature.
“I don’t like the word ‘modernization,’ but it combines some of the things people have been talking about as modernization and other ideas the Pennsylvania Liquor Control Board has come up with as a way to enhance customer convenience and also to dramatically increase the profits that the LCB returns to the state,” DiGirolamo said.
Gov. Tom Corbett has instead called for full-blown privatization, and a watered-down version of the governor’s plan to shut down the state’s 606 stores and auction off 1,200 liquor licenses cleared the House floor last March. The Senate came close to voting out its own plan just before the July 1 budget signing.
“We certainly don’t have an agreement,” Senate Majority Leader Dominic Pileggi said late afternoon Thursday. “There have been productive talks; we’ve made incremental progress. We have a shared goal of greater convenience for consumers, and at the top of that list is a greater availability of beer and wine in convenience stores and supermarkets.”
In his Feb. 4 budget address, Corbett touted last year as the closest Pennsylvania has gotten to overhauling its Prohibition Era-system, and he reiterated his commitment to privatization in 2014.
“We’ll review Mr. DiGirolamo’s plan,” Corbett spokesman Jay Pagni said Thursday. “That being said, we have had extremely productive discussions with the leaders of both chambers, and we’re working toward a system that will provide customers the convenience and competitive pricing that Pennsylvanians have a right to.”
Neither the Corbett administration nor legislative leaders are divulging the details of those recent talks, with Lt. Gov. Jim Cawley again working to build consensus in both chambers.
“We’re having excellent conversations with the Senate and narrowing differences,” said Stephen Miskin, spokesman for House Majority Leader Mike Turzai. “There’s optimism that it will happen.”
Pennsylvania’s liquor laws date back to 1933, when Prohibition ended and then-Gov. Gifford Pinchot said the purpose of the Liquor Control Board was to “discourage the purchase of alcoholic beverages by making it as inconvenient and expensive as possible.” In the United States, only Pennsylvania and Utah retain full control of wholesale and retail wine and liquor operations, though 18 states control some aspect of liquor sales.
DiGirolamo, who chairs the House Human Services Committee, was one of five Republicans to break party lines by voting against the privatization plan the House advanced last year. He says he opposes getting the state out of the booze business for several reasons, including concerns over increased alcohol abuse and laying off more than 5,000 union employees.
The union lobby against privatization has been one of several obstacles to passing a plan, with most Democrats opposed to laying off state workers. Skeptics have also worried about privatization’s effect on small beer distributors, many of which don’t necessarily want to expand into wine and liquor sales and fear that big-box retailers would put them out of business.
Opponents to privatization question whether the one-time revenue from selling off stores and ensuing tax boost in private sales are enough to justify overhauling the existing system. In 2012-13, the PLCB pumped $512 million into the Pennsylvania Treasury.
Wendell Young, president of United Food and Commercial Workers Local 1776, said DiGirolamo’s new proposal includes good ideas that have been raised for years. Young said he believes that GOP leaders pushing privatization have been politically motivated to keep the Liquor Control Board operating under antiquated rules.
“The better the system does, the less likely they’re going to achieve their goal of privatization,” Young said.
Liquour Control Board officials say they’ve done the best they can under existing law to make modern upgrades in recent years, including expanding product offerings, bolstering online availability, providing a new home delivery option and remodeling stores to more closely resemble private retailers.
Pileggi said it’s “very possible that some of the components that are referred to as modernization could be part of the legislation” that privatization proponents put forth this spring.
The goal is to advance a privatization before the July 1 state budget deadline, after which many lawmakers will shift their focus to the November elections.
“We want to do a single comprehensive bill,” Pileggi said. “I think there’s a window of opportunity here through June 30 ... I don’t think there’s much likelihood of a bill being moved in the fall.”
Natasha Lindstrom can be reached at firstname.lastname@example.org.