The Pennsylvania House of Representatives began debate Wednesday on another proposal to privatize the operations of much of the state-controlled wine and liquor store system, but it faces an uncertain fate and is challenged as a long-term fiscal loser for the state government.
The proposal, which would also liberalize beer sales laws, was expected to pass the Republican-controlled chamber over the protests of Democrats and a few Republicans. However, the Senate has been cool to it and it faces a veto by Democratic Gov. Tom Wolf, who favors keeping the state system and trying to make it more profitable.
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A similar bill passed the House two years ago, but it died in the Senate, despite support from then-Gov. Tom Corbett, a Republican.
Critics said the state government will take a long-term financial hit from losing control of wine and liquor purchases and that small businesses will suffer while large corporate interests will benefit. But supporters say it is time to break the state monopoly and reap $1.1 billion that they project from license sales, most of it from wholesale distributors.
Pennsylvania is the largest of 17 states that play some role in the control of wine and liquor, whether at the wholesale or retail level, or both, according to the National Alcohol Beverage Control Association in Alexandria, Virginia.
During a lengthy debate, lawmakers jousted over whether the measure would lead to lower or higher prices, better or worse selection, more or less alcohol consumption and more or fewer incidents of sales to minors. Critics also pointed out that many of the system's 4,300 store employees stand to lose their jobs.
Under the proposal, all but 100 of about 600 government-owned and -operated liquor stores would gradually close and employees there would get help finding new jobs.
The state, meanwhile, would be allowed to sell 1,200 licenses for private retailers to sell wine or liquor, or both, and it would give existing beer distributors the first shot at buying them at a steep discount. The license fees will vary, depending on the population of the county where they are located.
Grocery stores of at least 10,000 square feet would be able to apply for a license to sell wine, but not liquor, with the licenses limited to one per 15,000 people.
However, the bill's most lucrative element for the state, and the private sector, are licenses for wholesale distributors. Sales of those licenses would reap $615 million, according to a House Republican analysis.
On beer laws, beer distributors, now limited to selling at least a case at a time, would be able to sell six-packs or 12-packs. Restaurants, which now can sell 12-packs of beer for takeout, would be able to sell up to a case, in six-pack increments.