Key Pa. senator still deciding beer, liquor bill

HARRISBURG, Pa. (AP) -- How much the Pennsylvania treasury will suffer from privatizing state-controlled wine and liquor sales — and how to keep prices from rising in such a system — will be among the many questions a key state senator will try to answer as he finalizes a piece of much-anticipated legislation.

Sen. Charles McIlhinney, R-Bucks, still has a lot to consider in a shrinking amount of time after he wrapped up the third and final Senate Law and Justice Committee hearing Tuesday on the liberalization of Pennsylvania's beer, wine and liquor sales.

The hearing was the start of what is expected to be a busy month as Gov. Tom Corbett presses lawmakers to pass legislation on the matter before July 1, when lawmakers traditionally leave Harrisburg for the summer.

But a bill that passed the House in March is essentially dead in the Senate, and McIlhinney now must wrestle with the expectations of the beer-drinking public, opponents to a state-controlled wine and liquor system and a slew of companies that want a piece of the alcoholic beverage business in Pennsylvania.

"Nobody has been able to consistently define what privatization is," McIlhinney said after the hearing. "Getting that all together and putting it out there that everybody can say, 'Yeah, that's what I meant by privatization,' is something I'm going to try to do."

McIlhinney said he expects to finish writing his legislation in the next two weeks and seek passage in a chamber controlled 27-23 by his fellow Republicans.

The issue is a special one for Corbett, a champion for privatization who would like a high-profile legislative victory before he runs for re-election next year.

Underscoring that importance, Lt. Gov. Jim Cawley was flanked by several top administration aides, including Health Secretary Michael Wolf and State Police Commissioner Frank Noonan, as he said the private sector can be trusted to sell alcohol and stressed the administration's commitment to responsible sales.

The hearing had some tense moments, including once heated exchange between Cawley and Sen. Jim Ferlo, D-Allegheny, over making alcoholic beverages more widely available.

At one time, backers of privatizing the system had figured it could raise $2 billion or more in a one-time windfall. But that expectation in the Senate is gone, and McIlhinney said trying to raise substantial sums from selling retail and wholesale wine and liquor licenses will simply jack up prices.

"We're not trying to raise the money," McIlhinney said. "I guess if I gouge my consumers I can get more money out of it, but this is about the convenience and choice for the citizens."

McIlhinney says he is leaning toward a plan that would allow the state's approximately 12,000 existing private retail beer licensees — eateries, bars and distributors, as well as supermarkets or convenience stores with a restaurant-style beer license — to buy licenses to sell wine and liquor.

He also has suggested a willingness to relax the restaurant-style seating, food and space requirements that supermarkets, convenience stores and other retailers must obey if they want to sell alcoholic beverages. Meanwhile, beer licensees would be free to sell in a wider variety of volumes.

McIlhinney's bill might leave it up to the Liquor Control Board to shut down state-controlled liquor and wine stores, a decision that would come down to the price, selection and accessibility that is afforded by private sellers.

Another challenge for McIlhinney will be figuring out how to brace the state treasury to lose a revenue stream of more than $100 million a year from liquor store profits. That may mean keeping the state-controlled wholesale system.

"There's got to be a better way to divest of an asset without just giving it away basically over the next few years for a windfall that can be spent in just a couple years," McIlhinney said.