Pa. Governor Divides, Hopes to Conquer Union Opposition to Liquor Proposal

Published February 8, 2013

Pennsylvania Gov. Tom Corbett has unveiled a plan to privatize the Keystone State’s monopoly liquor store system, simultaneously executing a move intended to accomplish a goal of his administration while undercutting some of his loudest critics.

In Pittsburgh, Corbett, a Republican, said the proceeds from selling off the state liquor stores – estimated at more than $1 billion—would be used to increase funding for basic education over the next four years. The revenue could be used to increase school safety and security and create a grant program for school districts to use for early education, individualized learning, and math, science, and technology courses.

“Our plan gives consumers what they want by increasing choice and convenience, and helps to secure our future by adding $1 billion in funding toward the education of our children, without raising any taxes,” Corbett said.

New Element

By linking the issues, Corbett is likely hoping to short-circuit the opposition to liquor privatization by promising a boost to schools.

That element was missing in previous efforts by Gov. Dick Thornburgh in the 1980s, Gov. Tom Ridge in the 1990s, and Corbett last year to privatize the liquor stores, said Terry Madonna, professor of political science at Franklin and Marshall College.

Ridge’s 1997 liquor plan, for example, was tied to funding for new sports stadiums, arenas, and civic centers.

“This is the first time privatization has been linked to major funding for something like education,” Madonna said. “[Corbett] can leverage the political support for funding education.”

Labor Union Opposition

Labor unions have been the loudest opponent of liquor store privatization, led by UFCW Local 1776, which represents about 3,000 state workers in the liquor store system.

But labor unions are also among the loudest voices calling for more funding for education. On that front they are led by the Pennsylvania State Education Association, or PSEA, with more than 180,000 members.

PSEA President Michael Crossey characterized Corbett’s proposal as “holding students hostage to the governor’s political agenda.”

Pennsylvania has about 620 state-owned and -operated liquor stores. The privatization proposal would allow 1,200 licenses for the sale of wine and spirits.

Corbett’s plan would also allow wine and beer to be sold in supermarkets and would give beer distributors the right to sell six-packs and the chance to buy a license to add sales of wine and spirits.

However, the plan would keep the taxing structure in place, Corbett said, including the much-maligned 18 percent “Johnstown Flood Tax.”

Corbett said the PLCB would remain in place as an administrative and regulatory body.

‘Down to Competition’

“It all comes down to competition,” Corbett said. “What have we been running now for 75 years? A monopoly. We have laws against monopolies in this country, but we’re saying the state can still remain in a monopoly when it comes to selling wine and liquor.”

Linking the new education block grant to revenue from the liquor stores is a strong play by a governor criticized for his inability to make deals on major issues during his first two years in office.

“This is a departure from the last two years. It shows his willingness to use carrots to negotiate with the legislature on his agenda,” Madonna said.

But he still has to deal with lawmakers.

Modernizing Monopoly

Senate President Joe Scarnati (R-Jefferson) said he wanted to explore a series of bills written by state Sen. Chuck McIllhinney (R-Bucks) aiming to “modernize” the liquor monopoly by allowing stores to change pricing structures and operating hours, among other things.

Scarnati said he wanted to “put both trains on the tracks,” and he criticized the potential linking of key issues, calling it “Washington-style politics” and “hostage-taking.”

After Corbett’s announcement on Jan. 30, state Sen. John Yudichak (D-Luzerne) told reporters said the governor’s interwoven plan was a “bizarre and unhealthy attempt to tie education achievement to what can only be described as a one-time alcohol-funded stimulus package.”

Eric Boehm ([email protected]) is a reporter for PA Independent, where an earlier version of this article appeared. Used with permission of