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July 9, 2014, 7:48 pm

Corbett promises liquor proceeds to Pa. schools

  • Written by KEVIN BEGOS and PETER JACKSON
  • Published in News Headlines

PITTSBURGH — Gov. Tom Corbett on Wednesday unveiled an ambitious plan to end the state monopoly over the sale of liquor and wine by replacing hundreds of state-owned stores with twice as many private outlets and allowing beer and wine to be sold at a wide range of stores.

"I want Pennsylvanians to enjoy the same convenience that virtually every other American today has," said Corbett, who unveiled his proposal at a news conference halfway across the state from the Capitol in Harrisburg, where lawmakers will decide its fate.

The Republican governor said the plan would generate $1 billion in revenue that would be funneled to public schools over four years to create a proposed block grant program.

The money would help finance programs involving school safety, learning in reading and math through third grade, individualized learning programs and science, technology, engineering and mathematics instruction in the sixth to 12th grades.

Most of the revenue, a projected $575 million, would come from the sale of wholesale liquor licenses.

An additional $224 million is anticipated from the auctioning of 1,200 wine and liquor licenses, with 800 reserved for large retail stores and 400 for smaller ones. Those licensees would be required to set up separate stores to sell wine and liquor.

Every county would be allocated at least as many wine and liquor stores as it now has and is likely to gain more, officials said.

Other revenue would flow from the sale of beer and wine licenses to retailers including big-box stores, grocery stores, pharmacies and convenience stores.

Beer distributors, which currently only sell beer by the case, could obtain an enhanced license that allows them to sell beer in smaller quantities.

Also, because they also are eligible to compete for the wine and liquor licenses, beer distributors could become the only one-stop sources of liquor, wine and beer.

House Majority Leader Mike Turzai, R-Allegheny, the Legislature's leading liquor privatization advocate, and Lt. Gov. Jim Cawley joined Corbett at the event.

Corbett's proposal, the latest in a battle that has raged off and on for decades, calls for shutting down the 620 existing state stores, a move fiercely opposed by employee unions. Corbett called the current system "a vestige of Prohibition."

One legislative critic, state Sen. John Yudichak, said the move would throw thousands of state-store employees out of work. He lumped it in with the administration's pending contract to turn over management of the Pennsylvania Lottery to a British firm.

"The governor's fixation with privatization now includes a bizarre and unhealthy attempt to tie education achievement to what can only be described as a one-time alcohol funded stimulus package," said Yudichak, D-Luzerne.

The transition to a fully privatized system could take as long as four years. However, the closing of the state stores would begin within six months and be completed in the second year, according to the administration.

Corbett touted the changes as enhancing convenience for people who want a six-pack of beer or a bottle of wine, but officials said prices are not expected to change significantly.

Taxes on alcoholic beverages would remain unchanged under the proposal, but increased sales are projected to generate $13 million annually in new revenue.

The state will lose the $550 million annual markup on state-store sales, but officials said that would be offset by an expected $150 million increase in fees and fines, plus $400 million in savings from the termination of state wholesale and retail operations.

Interest groups were quick to respond to the governor's proposal.

"Our students shouldn't have to count on liquor being available on every corner in order to have properly funded schools," said the state's largest teachers' union, the Pennsylvania State Education Association.

The Pennsylvania Association of Staff Nurses and Allied Professionals said expanding the sale of alcoholic beverages would increase accidents and violence fueled by drinking.

"Our state does not need more liquor stores," said Patricia Eakin, the union's president.

The National Federation of Independent Business applauded the governor.

"We need to replace this bureaucratic and antiquated system with a more efficient and convenient private-sector model that meets the demands of modern society," the NFIB said. -- (AP)