Liquor privatization doubts linger even as PA House moves budget

By Andrew Staub | PA Independent

HARRISBURG, Pa. — The state House approved a $29.1 billion budget Wednesday, which banks on $380 million from selling off the state’s liquor stores. The budget now heads to the state Senate.

“This is not the end of the discussion,” state Rep. William Adolph, Republican chairman of the House Appropriations Committee, said on the House floor. “I’m sure our friends in the other chamber will make some changes to this plan, but this is an important first step forward to getting a fourth on-time budget.”

It’s the second straight year the House has put pressure on the Senate to get Pennsylvania out of the liquor business. But just because the House included revenue from privatization doesn’t mean it’ll be part of the final budget.

Like Adolph said, changes are probably coming in the Senate, which hasn’t embraced liquor privatization. Instead, the Senate has looked at more modest changes that keep the state store system intact while expanding wine and beer sales.

Even if the Senate changed course and took up privatization, there’s doubt it could bring in $380 million next year, as House Majority Leader Mike Turzai believes is possible.

“We don’t expect any liquor reform proposal which can be enacted over the next week or so to generate that amount of first-year revenue,” said Erik Arneson, a spokesman for Senate Majority Leader Dominic Pileggi, R-Chester.

State Rep. Joe Markosek, the Democratic chairman of the House Appropriations Committee, said “if by some miracle” liquor privatization becomes law, the governor’s own study noted it would take years to transition from the current system.

For now, the House version of the budget hinges upon revenue that depends on a change to state law that hasn’t been made, Markosek said. At one point, he called the budget bill “full of fantasy.”

“The time has come when we must choose whether we are willing to accept a budget that is held together with nothing more than tape and rubber bands,” Markosek said.

While the House debated the budget — on its way to a 110-93 vote — Senate Minority Leader Jay Costa, D-Allegheny, told reporters he didn’t believe it was the “real budget.” Aside from a dependency on fund transfers, there was the iffy issue of privatization, he said.

“Quite frankly, there’s been absolutely no discussion on that issue in our side of the building,” Costa said, noting a severance tax on natural gas extraction and increased cigarette tax are among the revenue generators “in play” in his chamber.

Lawmakers have until June 30 to pass a budget, though Corbett has said he’s OK missing the deadline.

The budget passed the House nearly along party lines. Every Democratic member voted no, while state Rep. Todd Stephens of Montgomery County was the lone GOP lawmaker to cast a no vote.

Stephens said he had concerns the $250 million Race Horse Development Fund was left untouched, while his local school districts were left with a “pittance” from the state.

Staub can be reached at Andrew@PAIndependent.com. Follow @PAIndependent on Twitter for more.