Last updated: March 21. 2013 11:58PM - 2196 Views

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HARRISBURG — A Republican plan to phase out Pennsylvania’s 600 state-operated liquor stores and raise millions in revenue by selling licenses to private businesses passed the state House easily on Thursday and was sent to the state Senate.


The 105-90 vote after about seven hours of debate was a victory for members of the majority Republican caucus and their ally, Gov. Tom Corbett, also a Republican.


Democrats warned the privatization bill will put thousands of state store employees out of work, cost more and generate less revenue than supporters predict, and make alcohol more widely available, bringing with it a range of social problems.


“This is not a business friendly bill,” said Rep. Margo Davidson, D-Delaware. “This measure has the potential to destroy small businesses and ravage communities.”


Supporters said the state should not be selling alcohol and said private businesses would improve customer service, create jobs and put an end to a Depression-era system of state control that was nearly unique across the country. They said sales would increase in part by recapturing customers from Pennsylvania who currently purchase wine and liquor from other states, particularly New Jersey.


“We are moving in the right direction,” said Majority Leader Mike Turzai, R-Allegheny. “There are going to be thousands of new private-sector jobs, not only in retail but in wholesale.”


Both sides said the proposal was likely to see changes in the state Senate, where the Republican leader said discussions would soon begin regarding how that chamber will respond.


The 194-page bill would give existing beer distributors the priority in purchasing 1,200 wine and spirits licenses. It also would allow groceries to sell wine, and enshrine their current ability — won through court rulings — to sell takeout beer. Eventually, another 600 licenses could be added to the mix.


Corbett, who supports privatization, has said the fees from the licenses — at least hundreds of millions, perhaps as much as $1.1 billion — should go to improving public education.


But the bill does not dictate how the money is spent, only that it should be deposited in a special account. Legislative officials said the spending would be determined in separate, future legislation.


“I’m sure, just as I’m standing here today before you on this historical vote, that money generated by the sale of these licenses will be put into public education,” said Appropriations Committee chairman Bill Adolph, R-Delaware.


Rep. Jake Wheatley, D-Allegheny, was one of several members who represent cities to express concern that some communities would be flooded with new retail booze outlets.


“When this thing is fully instituted, and we see an increase of alcoholism, or we see an increase of destruction that happens in our neighborhoods because of accessibility to a drug, then we have a responsibility to pay for that,” Wheatley said.


Senate Majority Leader Dominic Pileggi, R-Delaware, said earlier in the day that the goal should be improving selection, price and convenience.


“I don’t think anyone expects the Senate to just take up the House bill and move it to the governor’s desk as-is,” Pileggi told reporters in a conference call.


“I think the focus should be on what the system would deliver to the citizens of Pennsylvania,” he said. “I’m not as caught up in the ideological part of the legislative effort as the benefits to citizens.”


Under the bill, the state would continue to operate liquor stores in otherwise underserved markets until the number of stores dips below 100 stores. It provides for special job placement benefits for displaced Liquor Control Board employees. State taxes, including the 18 percent Johnstown Flood Tax, would continue to be levied, and supporters noted that the private retail operators would also be contributing payroll and business taxes.


It also provides a system by which those buying licenses can finance them over four years.

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