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Governor Corbett Proposes Liquor Privatization Plan

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Grocery stores, pharmacies, convenience stores, restaurants and "big box" stores would be able to sell beer and wine to go under a liquor license privatization plan announced by Pennsylvania Governor Tom Corbett in Pittsburgh on Wednesday.

"Why do we continue to deal with an antiquated liquor system that is seventy-five years old? The question should be, why don't we have choice? Why don't we have convenience, like 48 other states in the union?" asked Corbett, calling the state's system of liquor sales a "vestige of prohibition."

Corbett said his plan would be phased in over the next four years, starting with the auction of the 1,200 licenses for hard liquor currently belonging to state stores. The administration predicts nearly $800 million from the bids on both retail and wholesale licenses. New licenses would be created for beer and wine sales.

With thousands more licenses for beer and wine sales would come higher revenue through license renewal fees. The administration says that would be enough to match the current revenue created by the state's direct sale of wine and spirits, while making it more convenient for people to pick up drinks. Rather than switching to a gallonage tax as proposed in past privatization plans, Corbett would keep the current Johnstown Flood Tax of 18%.

While Corbett said there will "certainly" be more locations and more kinds of alcohol to choose from, he said the market would determine the total number of stores and the prices of beer, wine, and liquor.

"I think upon the area, and upon what you are looking for, price is going to fluctuate," said Corbett. "Competition affects prices, and location affects prices, so it'll be more dependent upon that."

He said the new reality of thousands more alcohol outlets would be accompanied by "substantial increases" in law enforcement. That would include mandatory suspensions for multiple offenses, and higher fines that would pay back into state police liquor law enforcement.

As for the roughly 5,000 potentially displaced employees working at the state liquor stores, Corbett said he would create tax credits for businesses that hire them. He said they would also receive two-year grants and would be given preference when applying for "civil service" positions.

The administration's proposal was roundly criticized by State Senator Jim Ferlo (D-Allegheny), who said the plan would turn Pennsylvania into "the Wild West of booze sales."

"Quick estimates based on the leaked proposals are that 20,000 new retail outlets will be permitted to sell beer and wine, not only grocery stores, but Targets and Walmarts, Rite Aids and Co-Gos and CVSs, 7-11s and Sunoco gas stations and even your local convenience store," said Ferlo.

Ferlo said it's not a good plan to send the thousands of state store workers into unemployment for a one-time revenue boost. He said the state should instead modernize the current system of liquor sales.

Governor Corbett said he expects a "spirited" debate on the legislation when it is introduced to the House next week.

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