When you need to fill a multi-billion dollar budget shortfall without raising taxes, as Gov. Tom Corbett has promised to do, a multi-billion dollar payday sounds pretty good. That's probably part of why Corbett has promised to take a whack at privatizing Pennsylvania's state liquor store system, which House Majority Leader Mike Turzai has estimated could yield up to $2 billion.
But State Rep. Mike Sturla, a Democrat who represents Lancaster County, told the Philadelphia Daily News editorial board yesterday that Corbett might want to check that number. Sturla said the sale of the state stores would probably generate much less, about $500 million, because the $2 billion estimate is partially based on a Price Waterhouse study commissioned during the Ridge Administration that valued the stores at $1 billion.
“Well, if you actually go back and look, the Price Waterhouse study that was done was based on assumptions that the Ridge Administration had given them, which they later then, after hearings, were told, 'No, those are the wrong assumptions,'” Sturla said.
The study was redone after the Liquor Control Board provided new numbers, and the stores were re-valued at between $230 million and $400 million.
Sturla doubts that the system has grown dramatically in value since that time, saying liquor sales have basically stayed flat since 1995. The current value of the system, he guessed, is probably closer to $500 million. That's still a lot of money, but not anywhere close to the $2 billion estimate. It's worth asking if this public asset -- and yes, the liquor system is a publicly-owned asset -- should be sold for that price.
Turzai's office did not immediately response to a request for comment.