Pittsburgh - January 30, 2013 - Governor Tom Corbett, joined by Rep. Mike Turzai, R-Allegheny, today announced his plan to privatize the liquor system in Pennsylvania and committed $1 billion in proceeds from the process to education funding.
Corbett said that the $1 billion will be used to create the Passport for Learning Block Grant, which will provide flexibility to schools, allowing our public schools, instead of Harrisburg, to decide what their students need.
The grant will focus on four priority areas: school safety, enhanced early education programs, individualized learning and science, technology, engineering and mathematics courses and programs.
"Our proposal is part of my commitment to changing Harrisburg, streamlining government and moving Pennsylvania forward," Corbett said. "Our plan gives consumers what they want by increasing choice and convenience, and helps to secure our future by adding $1 billion in funding toward the education of our children, without raising any taxes."
The $1 billion in revenue will come from the three to four year process of selling the LCB: $575 million from the wholesale license process, $224 million from the wine and spirits retail auction process, $107 million from the wine/beer license application process and $112.5 million in the enhanced beer distributor application process.
"Pennsylvania and Utah are the only two states in the country who have fully state-controlled liquor systems," Corbett said. "Our plan sells both the wholesale and retail arms of the state-run liquor business."
"I want Pennsylvanians to enjoy the same convenience that virtually every other American today has," Corbett said.
"My plan gets the state completely out of the liquor business. The state will no longer be a marketer of alcohol; instead, it will now focus on its role as a regulator," Corbett said. "It also creates an unprecedented opportunity for economic expansion for private sector employers while remaining revenue neutral for the state."
Currently, there about 600 state stores in Pennsylvania, the governor's plan allows for 1200 wine and spirits stores.
During the previous decade, the state stores' expenses have grown faster than their revenues, Corbett added.
Corbett said that his plan will offer Pennsylvania consumers greatly increased convenience and choice, because they will be able to buy the products they desire in a simpler, more accessible and more rational way. For example, consumers will be able to buy beer and wine where they shop for groceries, buy six packs of beer at a distributor instead of being forced to buy an entire case, and buy a six pack of beer at a convenience store.
Currently, Pennsylvania has far fewer alcohol retail establishments per resident than the average state. This proposal would allow the number of establishments to be naturally driven by the market, as it is in other states.
Corbett said that his plan balances the increased amount of retailers with additional enforcement measures.
The governor's plan calls for significantly enhanced fines for selling to minors and visibly intoxicated persons, with penalty ranges increasing from $1,000 - $5,000 to $5,000 - $10,000. The additional money from license surcharges and increased fines will be designated for enforcement efforts of the Pennsylvania State Police, Bureau of Liquor Control Enforcement, who will see a 22 percent funding increase under this plan. Corbett also proposes a 75 percent funding increase for alcohol treatment and prevention efforts.
Corbett's plan also calls for mandatory minimum license suspensions for businesses convicted of second and subsequent offenses for sales to minors or to VIPs. This will cause violations to be more meaningful, instead of being considered just a cost of doing business.
New alcohol retailers, such as wine and spirits stores, grocery stores, pharmacies and convenience stores must all use an ID scanner device before they can sell alcohol.
Corbett also explained that his proposal is fiscally neutral. Every dollar not returned to the state due to the divestiture of the LCB is returned to the state through restructured fees. He also noted that history in other states shows that many of the private sector jobs created will have comparable compensation.
Corbett also noted that his plan includes measures for affected LCB employees, including tax credits for businesses that employ separated workers, educational credits, civil service credits, individual employment plans and a multi-agency committee to help displaced employees find re-employment.
Along with Rep. Turzai, Corbett was joined at the event by Rep. Rick Saccone, R-Allegheny; Rep. Mike Regan, R-Cumberland; Rep. Jeff Pyle, R-Armstrong; Rep. Dan Moul, R-Adams; Rep. Warren Kampf, R-Chester; Rep. Seth Grove, R-York; Rep. Eli Evankovich, R-Westmoreland; Rep. Harold English, R-Allegheny; Rep. George Dunbar, R-Westmoreland and Rep. John Lawrence, R-Chester.
Meanwhile, the Commonwealth Foundation had this to say:
The Commonwealth Foundation applauds Gov. Tom Corbett for introducing a plan to end the state government's Prohibition-era liquor system in Pennsylvania.
Today, Pennsylvania remains one of only two states in the entire nation (the other Utah) where government wields complete control over all wholesale and retail sales of both wine and spirits. Gov. Corbett's proposed overhaul of the outdated liquor laws will bring Pennsylvania into the 21st century.
"The governor is giving the people of Pennsylvania what they want--more choice and greater convenience," said Matthew J. Brouillette, president and CEO for the free-market think tank. "Pennsylvanians would finally be able to buy bread, beer and Bordeaux all in one stop on privately-run shelves."
Ending the state-run monopoly will unleash millions of dollars in new business investment, create thousands of new jobs across the state and allow more wine shops and liquor stores to open.
Pennsylvania loses millions of dollars annually in liquor sales and tax revenue because residents willingly break the law and cross the border to buy wine and liquor in other states. This proposal will keep revenue in Pennsylvania by ending the need for residents to bootleg wine and spirits across state lines to get the price and selection they want.
Polling has consistently shown overwhelming majorities of Democrats, Republicans and Independents support ending the monopoly in favor of privatization that will bring personal and economic freedoms while keeping more jobs and higher tax revenues flowing into the community chest.
"Government should focus on improving education and public safety, not spending tax dollars advertising and selling alcohol," said Brouillette. "At the end of nearly 80 years of control, the PLCB ponderously produced a monopoly of manipulation, mediocrity, malfeasance and mismanagement."
It was recently revealed that the state spent as much as $10 million creating and marketing its own brand of wine that competed with privately-owned Pennsylvania wineries. Privatizing state stores will end this conflict of interest, removing government from the business of peddling alcohol and ensuring the PLCB's sole mission is to enforce the law.