Before the General Assembly moves on the privatization of the state liquor store system, it has to come up with a reliable estimate of the revenues raised through the sale. A recent Senate hearing demonstrates how difficult that might be.
Opponents of the sale say estimates of the state raising $1 billion to $ 2 billion – as some proponents insist – are way over blown.
Jim Sgueo of the National Alcohol Beverage Control Association told members of the Senate Law and Justice Committee for the sale of the 750 state stories to raise between $1 billion and $2 billion each license would have to go for approximately $2 million.
Sgueo said he has never seen a license in any state sell for even close to $1 million.
But Nathan Benefield of the Harrisburg-based Commonwealth Foundation told members that one-time revenues of $1 billion to $2 billion are a “reasonable expectation.”
Benefield said the state would not just be selling the licenses, but the real estate and its wholesale operations.
The $1 billion to $2 billion figure stems from a proposal introduced in previous legislative sessions by House Majority Leader Mike Turzai, R-Allegheny.
The state store workers union, the United Food & Commercial Workers Local 1776, insist the Turzai based his estimates on faulty numbers that in turn come from a 1997 study.
“Price Waterhouse originally said that a sale in 1997 would raise $600 million, but then conceded that the Ridge Administration had provided faulty numbers,” said Wendell Young, president of the union.
“Now, to get $2 billion, Turzai wants to sell 750 retail and wholesale licenses at a $2.3 million average – a figure achieved nowhere in the U.S. for similar licenses. For example, New Jersey’s average license sells for less than $250,000.”