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On Privatizing Pa. Liquor Stores, Conklin Is Opposed; Corman, Undecided

on January 13, 2011 7:53 PM

Gov.-elect Tom Corbett has been crystal-clear:

He wants Pennsylvania's state-run system of 625 retail stores to be privatized. A Reason Foundation estimate suggests that the system could fetch as much as $1.7 billion, according to a Patriot-News report.

Two State College-area lawmakers both said they fully expect the idea to inspire a strong debate in Harrisburg this year. But state Sen. Jake Corman, R-Benner Township, and state Rep. Scott Conklin, D-Rush Township, are approaching the matter in different ways.

Corman, who chairs the Senate Appropriations Committee, told that "I certainly can be for privatization." If it happens, he said, he thinks it should be done "from a public-policy point of view and not driven by the state budget (or) to plug a state budget hole."

Pennsylvania is expecting a structural budget deficit of several billion dollars in the next budget cycle.

Officially, Corman said he has not staked out a formal position on state-store privatization. "It certainly won't be the easiest thing in the world to do," he said.

Conklin, meanwhile, does not support privatization, said Conklin aide Tor Michaels. He emphasized that the system delivers millions of dollars in annual profit for the state -- about $105 million a year, according to the Patriot-News.

"Currently, we definitely want to see the (fiscal) projections into the future if we should let an asset like this go," Michaels said. He said the system is able to offer low retail prices "because there's such a bulk buy" on the supply end.

And "we also believe the state-store employees do an excellent job in vetting the people who come in, to cut down on underage drinkers purchasing alcohol," Michaels said.

(Another key local legislator, state Rep. Kerry Benninghoff, R-Bellefonte, could not be reached for immediate comment. He has been coping with a recent death in his family.)

Nearly 20 states have state-run alcohol-store systems. (The number can vary slightly, depending on how "state-run system" is defined.) In Pennsylvania, the state-store system took shape in the 1930s and has survived multiple prior attempts at dissolution, including one by former Gov. Tom Ridge.

It's not yet clear how or when Corbett will introduce his privatization plan; his inauguration won't happen until Monday. But the governor-elect has vowed that his concept will "help to address the state's need for additional funds, (insure) ongoing revenues and (minimize) the impact on current workers."

That's what he said in a press release issued by his campaign in October.

"Given the current economic climate in Pennsylvania, state government can no longer be in the liquor store business," Corbett said in the statement. "We need to move our state out of the 19th century and refocus state government on its core functions and services for our residents."

In State College, the local state-run liquor stores routinely rank among the highest-grossing locations in the Pennsylvania system. But the Borough Council president, Ron Filippelli, said he doesn't think the council will "be involved in the (privatization) debate at all."

"It's not something we have any control over," he said.

On a personal level, Filippelli said he's concerned "that the state not lose revenue" if the system goes private. Ideally, he said, he would like to see local communities have more control over alcohol licenses and the policing of licensed establishments -- now handled primarily by the state itself.

"State stores do huge business now," Filippelli said. "Do I think a private-sector arrangement would be worse than that? I doubt it. ... It's hard to imagine it would make much difference in that regard."

Similarly, Corman said no evidence suggests that states with privatized systems have more alcohol-related incidents on the police logs.

"I think just the fact that it's private doesn't necessarily mean there would be more problems with alcohol," he said.

But Michaels, speaking for Conklin, said that "I can't see any scenario where it would have a positive impact in the State College community or in the Penn State community." He referenced "the problem that already exists here in this town when it comes to drinking."

"We can be proven wrong," though, Michaels said. " ... There will be a vigorous debate this year over this subject. It has already begun."

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