Top PA Senator Still Not Sold on Liquor Store Privatization

By Melissa Daniels | PA Independent

HARRISBURG — Whether in a fast-food drive-through or with lawmakers in Harrisburg, people want to talk about liquor, said Senate President Pro Tempore Joe Scarnati, R-Jefferson.

“I took my son to the drive-through at McDonald’s last week to get a large French fry. The gal that handed me my bag out the window said, ‘Do you think the state stores are going to be privatized?’” Scarnati said during a speech at the Pennsylvania Press Club on Monday.

The crowd laughed. But Scarnati got serious when he talked about the attention privatization is getting in Harrisburg.

“Everybody wants to talk about liquor and that’s fine, we can talk about liquor,” he said. “But my point is, let’s not forget we have a budget.”

Attention has turned toward the state Senate since the House passed House Bill 790, which would effectively close all state-owned wine and liquor stores and create a new private licensing system.

There’s little to no support for the bill as written in the Senate, according to Scarnati. But that doesn’t mean lawmakers aren’t still furiously crafting and re-drafting proposals to get some type of liquor bill passed and sent to Gov. Tom Corbett.

Tuesday, senators will address the issue during a public hearing headed by the Senate Law and Justice Committee.

Scarnati said while access to liquor is important to his constituents, what’s more important is a plan that works.

“The last thing I want to be part of is creating another system that doesn’t work,” he said. “Let’s get it right.”

The state must constitutionally pass a budget by June 30, but Corbett has outlined three major proposals for passage along the same timeline – privatization, pension reform and transportation funding.

Scarnati said it’s time for lawmakers to start talking about the budget in concert with these policy changes. So far, caucus leaders and the administration haven’t had any substantive meetings, he said. On top of that, the state is facing revenue shortfalls, he said.

“You cannot go in and shut the LCB off like a light switch and it’s not going to cost the state budget something this year or the following year,” Scarnati said. “We have to account for that.”

But if privatization in some form is to happen, Scarnati said, the Senate aims to find a balance between the “ideology” of getting the state out of the liquor business without compromising existing private-sector businesses.

“It’s not just about grocery stores, it’s about beer distributors, too and we have to understand that,” Scarnati said.

Scarnati has a long history in the restaurant business, and he said it’s not fair to penalize liquor license holders who’ve played by the rules by suddenly expanding their local competition.

He also received $6,500 in campaign contributions from the Pennsylvania Beer Alliance in the 2012 election cycle, the most of any state lawmaker that year.

A compromise could wind up keeping state stores open. Scarnati is a co-sponsor of a proposal from Sen. John McIlhinney, R-Bucks, that would allow beer distributors to sell wine and spirits. Such a bill would expand retail outlets without selling off the state system altogether or shutting down the financially lucrative wholesale end of the Pennsylvania Liquor Control Board.

McIlhinney, chairman of the Senate Law and Justice Committee, is holding a hearing on liquor privatization Tuesday.

Republicans hold a one-seat majority in the Senate, meaning 26 of their 27 members must favor a proposal for passage.

As Scarnati put it, there’s no room for “slippage.” But Senate Democrats prefer a plan to modernize the state stores that expands hours and pricing models to make the LCB as much as $100 million more in revenue a year.

Caucus members are concerned privatization would increase alcohol consumption to Pennsylvania’s detriment. Modernization wouldn’t go as far, they say.

Senate Minority Appropriations Chairman Vince Hughes, D-Philadelphia, said the last thing a distressed community — one with high unemployment, drugs or already-high alcohol consumption — needs is more places to buy booze.

“There’s a difference between the number of hours a wine and spirits shops are open versus the number of outlets and retail outlets in a community,” Hughes said.

Contact Melissa Daniels at melissa@paindependent.com