State liquor stores should stay, top Senate Republican says

HARRISBURG - The state should stay in the liquor business for now, the Senate's top Republican said Thursday, all but slamming the brakes on momentum for privatizing the Liquor Control Board.

Senate President Pro Tempore Joe Scarnati (R., Jefferson) told reporters that while he realized many Pennsylvanians supported selling the state liquor stores, he thought the time wasn't right. He said the Senate would have other pressing issues when it returned in the fall.

What's more, Scarnati said, removing some of what he called the LCB's "handcuffs," such as limited store hours and a 30 percent markup on each bottle sold, could boost its value. Getting rid of it now would be akin to a fire sale, he said.

"I'm not so sure that we in Pennsylvania have yet got the best bottom line out of our liquor system that we can," he said Thursday.

His stance put him at odds with another key GOP legislative leader, and threw cold water on a privatization drive whose proponents had seemed confident that their issue would be ripe for attention in September, after the legislature's summer break.

Gov. Corbett has made no secret of his desire to get the state out of the business of selling alcohol. And polls show a majority of Pennsylvanians are ready to scrap the system, in place since the 1930s.

Last week, House Majority Leader Mike Turzai (R., Allegheny) unveiled his bill to privatize the retail and wholesale operations of the LCB. Through a spokesman, Turzai said Thursday that he believed Scarnati's comments only reinforced the need to privatize.

"The fact that you have to go to the legislature to make business decisions explains the archaic, wacky process that we have here in Pennsylvania," said spokesman Steve Miskin. "It's not Prohibition."

Turzai's legislation would double the number of liquor stores in the state by auctioning 1,250 retail licenses. It would also end the LCB's automatic 30 percent markup, and replace the 18 percent so-called Johnstown flood tax with a levy ranging from $8.25 to $12 per gallon, depending on the product and its alcohol content.

Miskin predicted his boss' bill would get to a House vote in October and then go to the Senate. Senate Majority Leader Dominic Pileggi (R., Delaware) said Thursday that Scarnati's view did not necessarily reflect a consensus of Senate Republicans, who he said have varied views on the issue.

Still, Scarnati influences the flow of legislation in the Senate and is hardly alone in his skepticism about selling the stores. The idea has historically faced stiff opposition from most Democratic legislators, from the union that represents LCB clerks, and from social conservatives who want the state to keep a lid on alcohol consumption.

While leaving some room for negotiation, Scarnati said he thought people should be asking two things: "Should the state remain in the business of selling alcohol? And the hard question is, will change improve our system?"

He said that if the legislature could undo the "handcuffs" it placed on everything from LCB markups to store hours, the agency could bring in more revenue.

Changing those rules, Scarnati argued, would also improve liquor licenses' eventual value at the auction block.

Turzai, the House GOP leader, has estimated such an auction would generate about $2 billion in state revenue, a figure opponents dispute.

In any event, Miskin said Thursday, money is not the main issue. He went on to echo Scarnati's framing of the first question.

"Whatever you get monetarily is icing on the cake," Miskin said. "It's not about getting the money. It's about, 'Should government be in this business?' "