The Tribune Democrat, Johnstown, PA

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January 31, 2013

A strong shot of controversy: Liquor plan delights some, vexes others

JOHNSTOWN — When Gov. Tom Corbett ran for office three years ago, Norm Sunday voted for him.

“I thought he had good business sense,” Sunday said.

At least he felt that way until Corbett pitched a plan on Wednesday that the Bargain Beer ’n Pop owner says would kill his business.

“His plan sucks,” Sunday said.

Down the road, Robert Kring, 22, stood outside a Sheetz on Haynes Street in Johnstown’s Kernville neighborhood, imagining the day he could pick up a six-pack alongside a sub and chips.

“Heck yeah,” Kring said. “I’d support that.”

Both sentiments were echoed across the state on Thursday in reaction to Corbett’s plan to privatize the state store system, change liquor license costs and auction many of the permits to convenience stores, big-box chains and other retailers.

It’s a move Corbett calls long overdue. It would pull Pennsylvania out of a liquor business monopoly it has held since Prohibition was repealed in 1933. At the same time it would funnel proceeds from liquor license auctions to education, he said Wednesday.

But opponents, led by unions, are slamming the move. Critics say the proposal would cost thousands of state workers their jobs and potentially shutter many current retailers who could not afford to battle head-to-head for licenses against large distributors or chains such as Wal-Mart, Giant Eagle and Target.

“Most distributors like mine, we couldn’t afford to compete,” Sunday said, pointing to a folded newspaper article on his counter that outlined the plan.

“There’s more than 13,000 distributors like me across the state,” he added.

“If we’re supposed to pay $150,000 for a distributor’s license, it’d close us all down.”

Mike Crossey, the Pennsylvania State Education Association’s president, said, “Linking liquor store privatization to school funding is just another way of holding students hostage to the governor’s political agenda.” Crossey is a Dormont area special education teacher for Keystone Oaks schools.

He called Corbett’s plan “a scheme” with education funding as bait.

But Corbett said this week he’s simply trying to change a broken state liquor system – and in the process create a $1 billion fund for the state’s school systems.

Corbett’s administration estimates that $1 billion would include $575 million from the wholesale license process,

$224 million from the wine and spirits retail auction, $107 million from new wine/beer licenses and $112.5 milion from  enhanced beer distributor licenses that would also allow holders to sell spirits.

Pennsylvania and Utah are the only states left in the nation using the state store system.

“It’d sure be nice to be able to grab a six-pack down the street on a Sunday when you’re heading home to watch the football game,” said Akeem Little, 28, of Johnstown. “A lot more convenient.”

The National Federation of Independent Business applauded Corbett’s plan.

“We need to replace this bureaucratic and antiquated system with a more efficient and convenient private-sector model that meets the demands of modern society,” the group said.

The governor’s move also comes at a time when the PLCB has been under fire.

The board has been criticized for how it’s handled the marketing of a series of in-house TableLeaf wines. The effort has been criticized as secretive.

And that was just one in a series of moves that put scrutiny on board CEO Joe Sconti, who announced this month he is stepping down from his $156,000-a-year job.

It might all seem a bit familiar. Thirty years ago, Gov. Dick Thornburgh made a hard push to privatize liquor stores while a then-PLCB chairman was also under fire.

“It’s a question of controlled monopoly versus free enterprise,” Thornburgh told The Tribune-Democrat in February 1984. “It’s time for a 20th century whiskey rebellion in Pennsylvania to put an end to this bloated bureaucracy.”

Thornburgh’s term as governor and the 20th century both ended without that happening.

And some leaders on both sides of the aisle in Harrisburg questioned whether Corbett’s plan, as proposed, has a better chance now.

“If it’s a discussion about the state stores, let’s have it,” state Rep. Carl W. Metzgar, R-Somerset, said from his office. “But why muddy it up with all of these other issues – education and bringing in distributors.”

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