Bucks legislator reveals latest Pa. liquor plan

Posted: June 20, 2013

HARRISBURG - Wine, beer, and liquor, all under one roof.

Buying alcoholic beverages in Pennsylvania should be that simple, according to a key Republican legislator who made public Tuesday his long-awaited version of a plan to privatize the sale of wine and spirits in the state.

But nothing is simple when it comes to privatizing the state's liquor system.

Sen. Chuck McIlhinney (R., Bucks), who chairs a committee that oversees liquor matters, is pushing a proposal that would allow beer distributors, restaurants, bars, taverns, and even hotels to obtain licenses to sell the alcohol trifecta. It would also usher in the era of the six-pack: Customers would be able to pick up one or more at any store that had a liquor license.

One thing McIlhinney's plan would not do is require about 600 State Stores to close, at least not immediately. Under his proposal, the oft-maligned stores would be shuttered if and when they became unprofitable and unable to compete with the private sector.

And his plan comes with big caveats. It does not yet have the support it needs to pass the 50-member, Republican-controlled Senate, the chamber's leaders acknowledge. If it gets enough votes, it will likely be changed, perhaps drastically, as negotiations begin in earnest with the House and Gov. Corbett.

Last but not least: Time is running out. Corbett has pressed hard for the legislature to deliver a privatization bill to him by the June 30 deadline to pass a state budget. That leaves less than two weeks for all sides to agree on an issue that has eluded governors and legislators since the end of Prohibition in 1933.

Still, Senate Majority Leader Dominic Pileggi (R., Delaware) on Tuesday called McIlhinney's plan "a great starting point."

Corbett, in a statement, called the proposal "another important step in giving Pennsylvanians what they want: choice and convenience." But he stopped short of saying whether he would support it.

That comes as no surprise to those who have followed the issue. The governor and the GOP-controlled House have been pushing for a far more expansive privatization bill, one that would sell off the retail and wholesale operations of the Liquor Control Board. The House, which passed its own privatization bill in March, would also open the liquor arena to more supermarkets and to big-box stores.

McIlhinney's plan would do none of that. In fact, it would have the state keep running the wholesale side for at least two years, and it would not change current laws for grocery stores and supermarkets that want to sell beer. Those stores now can obtain a special license to sell beer only if they have a seating area for customers to dine, which many stores say they cannot fit into their current spaces or cannot afford to build.

Instead, the proposal focuses on retailers who already sell alcohol.

"Many owners of beer distributors, taverns, and restaurants were forced to make a giant leap of faith and pour all of their financial resources into their business to succeed in the current system," McIlhinney said. "As we move toward liquor privatization, we need to give these small-business owners a way to protect their investment and avoid handing the entire liquor distribution system over to huge corporate interests."

He would allow beer distributors, who can now sell beer only by the case and keg, to apply for a license to sell wine and hard liquor. They could also seek a "specialty license" to sell a specific liquor, such as vodka.

Those beer distributors would be able to sell by the six-pack, long a desire on the consumer and retailer ends.

Restaurants, bars, and hotels, too, would be able to sell wine, spirits, and beer to go. At present, they can sell up to two six-packs; under McIlhinney's plan, they could sell up to four, and up to four bottles of wine.

McIlhinney would also allow direct shipment of out-of-state wine to Pennsylvania residents, who under current law must have their wine shipped to a State Store for pickup, where they also pay the state's full markup and tax load.

As for those unique-to-Pennsylvania taxes, McIlhinney's plan would do away with one: the 18-percent Johnstown Flood tax, which dates to 1936 and is still slapped onto all purchases at State Stores.

None of this was enough to quiet one of the staunchest foes of privatizing - the head of the union for State Store clerks, who promptly pilloried the latest plan. "No matter how the senator dresses this plan up, it would put 5,000 LCB employees out of work, hundreds of local beer distributors out of business, and the 10,000 Pennsylvanians they employ out of work as well," said Wendell W. Young IV, president of United Food and Commercial Workers Union Local 1776.

Top Senate staffers say they expect the Law and Justice Committee, which McIlhinney chairs, to take up his plan - and vote it out - as early as this week.

Then it would face a tougher test: the entire Senate.

Contact Angela Couloumbis at 717-787-5934 or at acouloumbis@phillynews.com, or follow on Twitter @AngelasInk.

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