The Tribune Democrat, Johnstown, PA

Local News

March 30, 2013

Liquor store privatization plan’s prospects uncertain in Senate

HARRISBURG — It took Peter Madison five years of working part-time at liquor stores all over Northumberland County before he was able to land a full-time job in the system.

After 13 years of being a full-time clerk, now working at the state store in Shamokin, Madison is a union steward in the United Food and Commercial Workers union who is actively fighting to try to keep the state in the liquor business despite a vote in the state House that would dismantle the state store system.

The bill now heads to the state Senate.

“The system provides 5,000 people with family-sustaining jobs, not minimum wage jobs. It keeps my family afloat and lets me pay my bills,” Madison said.

Madison, who makes just over $37,000 a year, said that Republicans have been misleading the public by repeatedly stressing, albeit correctly, that Pennsylvania is one of only two states with a complete monopoly on wholesale and retail liquor sales. But, of chief concern to advocates of the state-store system, there are

17 other states that maintain a level of government control over the sale of hard liquor.

Madison added that he believes that because of the compensation and benefits, he values his job more than a clerk in a convenience store or grocery store.

The entry-level base pay for a liquor store clerk is $22,396, or $10.77 an hour, state records show.

The top base pay for a liquor store clerk is $42,015, but with overtime, a handful made more than $50,000 and one clerk’s pay topped $60,000 in 2012, state records show.

Job placement ads for retail clerk positions around the state show that in most cases, entry-level pay is between $8 and $9 an hour.

While LCB employees are paid more than others in similar positions in the private sector, the state-store system’s expenses are covered by revenue from alcohol sales. And when all is said and done, there is still enough money left over at the end of the year for the liquor system to provide $80 million in profit to the state.

House Republicans have estimated that the House liquor plan would provide $1.1 billion in upfront revenue. But that number is based on the assumption that only one-quarter of the state’s beer distributors choose to purchase upgraded licenses to sell wine and liquor.

The fiscal note composed by the House appropriations committee estimates the House plan would only generate $27 million in ongoing revenue, far short of the $80 million now provided by the state monopoly. Republicans have argued that the gap would be closed by increased taxes paid by the private retailers.

However, the uncertainty is bothersome, said  Sen. Elder Vogel, R-Lawrence.  

 “I can understand that you would say that it is not a core government function,” Vogel said. “But replace the revenue for me.”

Vogel said that the state is facing other expensive problems – like the need to fix aging highways and bridges and the cost of an underfunded pension. With those bills looming, there will have to be careful consideration of the full economic blow that could come from dumping the liquor system.

Vogel said that it is far from clear that the Senate will be in a position to vote on the liquor plan in time for this year’s budget.

“It took the House 21/2 years to pass bill,” he said.

“The House has spent a lot of time on it,” said Sen. John Gordner, R-Columbia, adding he would expect that the Senate Law and Justice Committee would hold “several” hearings on the liquor plan.

“We would be remiss if we did not spend some time to consider the proposal and its ramifications,” he said.

Gordner said that the House legislation wisely set aside the revenue because it is not clear how much money the state will get. Corbett had originally proposed that the up-front money would be used to fund $1 billion in special grants for schools.

Sen. Gene Yaw, R-Lycoming, who sits on the Senate Law and Justice committee, said he is still reviewing the language in the House bill, but said that the fate of the state store system has not been his chief concern.

Most voters are focused on whether the plan will improve convenience, and Yaw said he is concerned about how the plan will impact beer distributors.

Senate Democratic leaders said that they will push a legislative alternative that keeps the state store system in place.

Senate Minority Leader Jay Costa, D-Allegheny, said there is “little or no support in the Senate Democratic caucus” for the House bill.

The House version of the liquor privatization bill passed with lawmakers sticking along party lines with 105 votes in favor and 90 opposed.  The Senate advantage in the Senate is just 27-23, meaning every vote will count.

A Senate bill intended to modernize the existing liquor system rather replace it, has 26 co-sponsors, Democrats said.

“That is a good jumping off point for conversation,” said Sen. Vincent Hughes, of Philadelphia, Democratic chairman of the Senate appropriations committee.

“We have them right where we want them,” joked Wendell Young IV, president of the United Food and Commercial Workers Union Local 1776, which represents state store employees.

 “I have my ideas about where senators are, but I think they should be allowed to analyze the legislation and its impacts before they are pressured to take a position.”

Young said union officials are particularly pleased that members of the Senate have indicated that there will be public hearings on privatization legislation.

Republicans in the state House argued that hearings were not needed in 2013 because they had held hearings on the issue last year and the perspective of witnesses were considered when the current liquor privatization bill was developed.

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