House Majority Leader Mike Turzai, R-Allegheny pitched his plan to privatize the state liquor stores to the House Liquor Control Committee on Wednesday, July 27.
Turzai was the only one to testify before the committee, but chairman John Taylor, R-Phila., said more hearings on the issue were planned.
Turzai has said he believes he can muster the votes in the House to approve privatization, but in the Senate fellow Republican and President Pro Tem Joe Scranati, R-Jefferson recently said that privatizing the liquor system was not at the top of his agenda.
One of the key’s to the Turzai plan is preserving revenues the state now earns on the taxes applied at the retail level, and profit the liquor system turns over to the state’s General Fund each year. Turzai defended the revenue projections in his plan before committee members.
“Selling the state’s liquor system could generate up-front revenue of about $2 billion,” Turzai said.
He said that this would be accomplished by not only auctioning the the state’s 1250 liquor stores but by selling the inventory as well. On the tax front, the 18 percent Johnstown Flood Tax and the Pennsylvania Liquor Control Board’s 30 percent markup would be replaced by a per gallon tax ranging from $8.25 to $12, depending on the types of liquor or alcohol content.
Turzai said increased competition on the retail level will lead to more selections and lower prices. He also said that those who now work for the state liquor system would be given first preference to jobs in the private market.
But Wendell Young, President of the United Food and Commercial Workers 1776, which represents the state store workers, has said that Turzai’s legislation won’t generate anywhere near the upfront revenue he claims and that the bill would put nearly 5,000 people out of work.