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Questions as Corbett serves up liquor stores as shot for education

Questions as Corbett serves up liquor stores as shot for education

State Rep. Mindy Fee, a supporter of privatizing the liquor business, says the move is long overdue.

April Hershey, Warwick School District superintendent, says she will happily accept any money the governor offers from the deal.

Fee and Hershey reflect a common view among many lawmakers and school administrators asked about Tom Corbett's plan to turn over state-owned liquor stores to private hands.

An overwhelming majority of Lancaster County lawmakers and school administrators said they support the Republican governor's proposal to privatize liquor sales in the state -- a move that he said would generate $1 billion for public education.

Fee, a Manheim Township Republican, said the free market should rule the liquor industry.

"(The state) has had a monopoly on liquor for way too long," she said.

But if Corbett wants to win approval for his plan, state Sen. Lloyd Smucker said, he must convince legislators that the business model makes sense.

The state will lose the $550 million annual markup on state-store sales, but officials said it would be offset by $400 million in savings from the termination of state retail operations. An additional $150 million is expected from increased fees and fines.

"We'll need to take a look at all the numbers before I can say I'll support his actual proposal," he said.

The proposal will get the vote of state Rep. Dave Hickernell.

The West Donegal Republican said that based on a survey of his constituents about two years ago, and input he's received since then, a majority support privatization of the state stores.

State Rep. Mike Sturla said Pennsylvanians don't necessarily support privatization -- they want an easier way to buy their booze.

"What they want is convenience; they don't care who runs it," the Democrat said. "They just believe what they're being fed by the government, that this is the only way to do it."

Republican state Reps. Keith Greiner, of Leola, and Steven Mentzer, of Manheim Township, say they favor privatization because private companies can do the job better.

"The government shouldn't be in the business of doing something a private company should be doing," Greiner said.

Under the plan, an additional $224 million is anticipated from the auctioning of 1,200 wine and liquor licenses, with 800 reserved for large retail stores and 400 for smaller ones.

Every county would have at least as many stores that sell spirits as it does now and is likely to have even more, officials said.

Opponents of Corbett's proposal argue that expanding the sale of alcohol would increase accidents and violence fueled by drinking.

That is a very real concern for state Rep. Gordon Denlinger, who said he will review the plan carefully to make sure certain safeguards are in place.

"The number of new outlets may open the doors to difficulty for law enforcement," the Narvon Republican said.

Republican state Rep. Ryan Aument disagrees.

The West Hempfield lawmaker said enforcement provisions actually will be strengthened by the move.

"The (Pennsylvania Liquor Control Board) can focus entirely on making sure the laws are being followed," he said.

Bryan Cutler, of Peach Bottom, said he's always found it odd that the state sells and promotes alcohol while it also enforces laws about its use.

The Republican state representative said the governor's decision to sell off the state's licenses is a smart financial move as well.

Corbett said the plan would generate an additional $1 billion in revenue over four years. He said the money would be used to create a proposed block grant program to help finance certain public school programs.

Smucker said he thinks Corbett is on target with plans to use proceeds for education funding.

"Providing funding for quality education is good use of the dollars," the West Lampeter Republican said.

State Rep. Mike Folmer agrees.

However, as chair of the Education Committee, the Lebanon Republican is waiting to see the details before he calls Corbett's plan a slam dunk for schools.

"The devil is in the details," Folmer's Chief of Staff Fred Sembach said. "We need to evaluate what happens to those programs once the money runs out."

Sturla, a Lancaster city resident, said the proposal is just another attempt by Corbett to sell off the state's assets for short-term profits.

"I think Corbett is having a really tough time managing the state, while trying to keep his promise not to raise taxes," he said.

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District superintendents' initial reactions were mixed as well.

Corbett estimates that the sale of wholesale licenses would raise about $575 million, while the auction of wine and spirit licenses about $224 million. An additional $107 million would be raised through the wine/beer license application process and another $112.5 million from an enhanced beer distributor application process.

Overall, he said, the $1 billion would be given to fund education in the form of block grants over four years.

The money could be spent in four categories -- school safety, early education, individualized learning and science, technology, engineering and mathematics courses and programs.

Conestoga Valley School District Superintendent Gerald Huesken said Corbett's proposal is just another example of how education has become a political bargaining chip.

"Although I like the initiatives in education that the governor is identifying, it seems like the education connection is forcing a quick decision on another important issue that requires consideration and debate on its own merits," he said.

Brenda Becker, superintendent of Hempfield School District, said she has concerns about one-time infusion of cash.

"We need a comprehensive, sustainable plan developed on how to fund public schools moving forward," she said.

Over the past several years, April Hershey, Warwick's school chief, said, funding for programs helped by Corbett's proposal have been cut drastically.

"I'm not as concerned about where the dollars are coming from -- I'm just excited that we'll get something," Hershey said. "There seems to be some realization that schools need more help meeting the mandates imposed on us."

Solanco School District Superintendent Martin Hudacs said he's reserving judgment on the plan until he sees more details.

"He says privatizing the liquor system will bring in $1 billion but it doesn't always work out as planned," he said. "When it comes to education funding, a short-term windfall isn't as good as a steady stream of revenue."

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But not everybody's on board with the proposal.

About 5,000 PLCB employees may find themselves out of jobs. And the United Food and Commercial Workers Local 1776 isn't going to back down from a fight.

"We're not at all impressed with the plan and I think a lot of Pennsylvanians agree with us," said Wendell W. Young IV, president of the UFCW 1776, which represents about 3,500 state liquor store employees.

Young said he's confused as to why Corbett is determined to get rid of a system that generates big money.

He said he doesn't believe the governor's plan will actually compensate for the loss of more than $500 million that the stores deliver to the state every year.

The system does need to be modernized, he said, and the state's Auditor General's office already has identified ways to improve the system.

"It was dishonest and disingenuous to make it sound like this is the only way to improve the existing business model," Young said, adding that expanding operating hours would be one example.

But it appears the union has limited time to build its case.

Corbett's proposal calls for shutting down the 620 state stores within six months of the Legislature signing off on the plan. The transition to a fully privatized system could take as long as four years to complete, officials said. n

nThe governor and the attorney general's investigation. A9