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Politics & Government

Senate GOP Calls Its Alcohol Sales Plan A 'Starting Point'

State Senate GOP leaders have presented a counter-offer to the state House's liquor privatization plan, though they admit they don't yet have the votes to pass it out of their chamber.

The measure could expand the sale of alcohol to some 14,000 additional retailers without setting a hard line on the closing of state stores. It would allow beer distributors, hotels, and restaurants to sell wine and liquor and allow certain grocery stores to sell wine. It would also include a number of so-called modernization measures, like allowing state stores to extend their hours and letting beer distributors sell alcohol in smaller quantities.

It does not prescribe a method for shutting down state stores, instead leaving discretion up to the state Liquor Control Board to close stores based on profitability.

The measure also would not sell off the state's wholesale operation for wine and liquor, but set up a study of such divestment in two years.

"What we're doing is increasing the value of our wholesale system," said Sen. Chuck McIlhinney (R-Bucks), who authored the proposal. "So when we take the time to evaluate in a couple of years, it's going to be worth considerably more as a privatized system than it is right now with an artificially controlled 600 or so stores that we currently have."

Republican House leaders and the Corbett administration have said privatization of the state's wholesale operation is important to an acceptable bill.

The plan would also eliminate the 18 percent tax on wine and liquor. McIlhinney said even without the tax, the plan would mean an increase in state revenue by as much as $170 million in the first year of his plan's implementation. He said revenues over what the Liquor Control Board has collected in past years would be set aside to fund a property tax freeze for seniors, Department of Public Welfare rape crisis and domestic violence programs, and a "Safe Ride Home Grant" program.

Union members and Democrats scoffed at the estimate and the plans for it.

"There won't be money for property tax or education or anything else," said Wendell Young, spokesman for the union representing state store clerks. "Taxpayers of Pennsylvania are going to lose hundreds of millions of dollars on this."

Democratic state Sen. Jim Ferlo of Allegheny County, who has his own so-called modernization proposal for the state stores that would make them more profitable, said he objects to prospect of a "proliferation" of wine and liquor licenses. He said he doesn't see how the state would yield an additional $140 million to $170 million under the plan, as McIlhinney claims.

"I don't see where the numbers add up to be the equivalent reimbursement of all these lost revenues," Ferlo said. "So there are major problems with this proposal."

Senate Republicans say they'll vote the bill out of committee this week.

Republican Senate Majority Leader Dominic Pileggi said the plan doesn't yet have the 26 votes it would need to pass out of the Senate.

"But we certainly do have votes to move this bill from committee, which is the first step in the process," Pileggi said. "I think it's an excellent starting point."