Corbett Announces Liquor Privatization Plan; $1 Billion in Proceeds to Fund Education

“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 governor said Wednesday.

Gov. Tom Corbett on Wednesday announced his plan to privatize the liquor system in Pennsylvania and committed $1 billion in proceeds from the process to education funding.

The governor said the $1 billion will be used to create the Passport for Learning Block Grant, which will provide flexibility to schools, allowing 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.”

He continued: “I want Pennsylvanians to enjoy the same convenience that virtually every other American has today. 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. 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 1,200 wine and spirits stores.

During the previous decade, the state stores’ expenses have grown faster than their revenues, Corbett added.

He said 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 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 patrons, 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.

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.

What do you think? Good idea? Bad idea? Leave your opinion in the comments section below.


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Greg January 31, 2013 at 07:42 PM
I actually dont have a problem with closing the liquor sotes. I do have a problem with the state auctioning the liquor licenses off. Theres no way that a small mom and pop operation can compete with the big box stores, Walmart and Giant Eagle. Also, is it just me or is it wrong that the money is going towards education? Sounds like hes trying to place the teachers unions against the state store unions. It would kind of work better if the money went to public transportation funding. By the way, whatever happened to the revenue from the casinos that was supposed to help out with our property taxes?
Greg January 31, 2013 at 07:43 PM
liquor stores...not liquor sotes
another PR mom February 01, 2013 at 06:12 PM
seriously????? you guys just do not want him to succeed and I am convinced of that. Why in the heck would it matter where the money comes from. Only an idiot would not want to change our state store system----or a union hack. Bet you guys are both.
Phil February 01, 2013 at 06:32 PM
"nor the increase in costs of spirits to provide profits to the owners..." Clearly you never lived in one of the other 48 states that have privatized distribution systems. If you had, you'd realize that the privatized competition drives prices WAY down! I think you're letting your personal politics get in the way of what is obviously a belated, right decision.
Cindy Cusic Micco February 02, 2013 at 04:53 PM
Please comment on the issue at hand and avoid personal attacks.


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