Turzai: privatization top fall priority
While the Legislature's fall agenda is already packed - Marcellus Shale rules and fees, dealing with recommendations from the Transportation Funding Commission, renewing a push for school vouchers, etc. - Turzai said selling the state stores is his top priority.
Capitol Bureau Chief Tracie Mauriello writes in her first take on the plan that Democrats are already condemning the idea as foolhardy and a job-killer for the 5,000 current liquor store employees.
Mr. Turzai said he expects retail prices to be more competitive without sacrificing tax revenue the state would continue to collect under a revamped system.
Liquor Control Board officials, though, say their buying power already results in low prices and that they already provide a reliable revenue stream to the state's general fund.
Mr. Turzai's plan would eliminate the LCB's 30 percent mark up, the 18 percent Johnstown Flood Tax and the handling fee that now ranges from about 70 cents to $1.50 a bottle.
Instead, he would implement a gallonage tax that is based on volume and alcohol content. Meanwhile, he said, the market would dictate retail mark-ups.
He said any revenue loses would be mitigated by a significant reduction in "border bleed," when Pennsylvanians cross state lines to find better prices in surrounding states where liquor sales already are privatized.
Mr. Turzai's proposal protects small retailers by designating 500 "Class B" licenses for outlets with 15,000 square feet of sales space. Meanwhile, 750 "Class A" licenses would be available to larger retailers such as grocery stores and super centers.
Some of the licenses could go to beer distributors, Mr. Turzai said.
He has said that the licenses could fetch up to $2 billion at auction, but Democrats' say their estimates are much lower and the potential loss of revenue is not worth the risk.
"This whole concept is misguided," said House Minority Leader Frank Dermody, D-Oakmont, during an interview in his Capitol office. "What a time to be doing this."
He lamented that the plan could put 5,000 state store employees out of work and loosen control over sales without guaranteeing financial gains.
Mr. Turzai's plan mitigates critics' concerns about underage sales by mandating training, requiring employees to be at least 21, instituting a computerized age verification system, conducting compliance checks and establishing heavy penalties for violators.
His legislation also includes provisions to help displaced state store workers. It provides hiring preference for other state jobs, education grants to prepare them for other careers and tax credits for employers who hire them.