HARRISBURG — A House panel Monday took the first step toward getting Pennsylvania out of the liquor business.
The House Liquor Committee on a 14-10 vote approved a bill that would phase out the 619 state-owned stores and create 1,200 wine and spirits licenses for private businesses.
Republican Gov. Tom Corbett called it a “momentous first step to bring Pennsylvania into the 21st Century and provide Pennsylvanians with the convenience and choice that Americans in 48 other states enjoy.”
Democrats on the panel contended the bill was being rushed through without hearings. Two separate efforts to halt the bill and hold hearings were defeated along party lines.
Rep. Ted Harhai, D-Westmoreland, said beer distributors operated under one set of rules for decades and now that is being changed. “I’m very, very concerned about our beer distributors as we know them today,” Harhai said. He said five out of six distributors in his area are not interested in selling wine.
Democrats also said the burden on state police for enforcement is being expanded without additional funding for more troopers working out of the Liquor Control Board’s Liquor Enforcement Bureau. Liquor chairman John Taylor, R-Philadelphia, said that issue could be dealt with as warranted in the state budget.
Rep. Nick Kotik, D-Coraopolis, tried to ban campaign contributions from wine and spirits licensees. He said it was fitting given the “pay-to-play” corruption scandal at the Turnpike Commission state prosecutors unveiled last week.
Taylor suggested it would be wrong to single out on segment of licensees. He said he would support an across-the-board ban affecting all licensees.
Pennsylvania and Utah are the only two states that control retail and wholesale sales.
Pennsylvania’s system became law in 1933 after the end of Prohibition. In the words of former Gov. Gifford Pinchot, who signed the bill into law, the state-controlled system was intended to make the purchase of liquor “as inconvenient and as expensive as possible.”
House Majority Leader Mike Turzai, R-Bradford Woods, has said he wants to push for a full House vote on his bill, possibly later this week.
Pennsylvania’s state stores employ about 3,500 clerks. Turzai supports providing tax incentives to companies that hire laid-off state store workers.
Under the bill, beer distributors would get the first right of refusal for the wine and spirits licenses. Grocery stores could sell wine and beer if they have separate sections selling food. Big-box stores could bid on wine and spirits licenses after the beer distributors decide whether they want to pay the fees for selling wine and liquor. There are 1,138 beer distributors. Box stores could have one wine and spirits store per county and only five statewide.
Corbett intends to use the revenue for education grants. The governor estimated $1 billion would be available. Taylor said under this version of the bill it would be about $800 million.