The state House is poised to vote this week on a bill that would privatize the sale of liquor and spirits in Pennsylvania.
In its first significant piece of business in the 2015-16 legislative session, the state House of Representatives is poised to vote this week on a bill that would get the state out of the liquor business. But some wonder how many legislators casting votes really know what the bill would do.
House Speaker Mike Turzai, R-Allegheny, said it's time to get state government out of the liquor business, but some question if he knows exactly what his bill that would accomplish that actually does.
Rep. Mike Sturla, D-Lancaster, and a union official suggest even the bill's sponsor, House Speaker Mike Turzai, R-Allegheny, seems confused about what's in the legislation based on comments he made during a recent PCN Call-in Program.
"It'd be interesting if the people who are voting on the bill had to take a test and had to get a passing grade before they could vote yes, I think it wouldn't pass," Sturla said.
But Turzai argues this issue was widely vetted prior to the House voting 105-90 two years ago on a bill that is nearly identical to the one that the House Liquor Committee will consider this morning.
Besides, that, he said, "We wanted to come out of the gate in the new session articulating our agenda for moving Pennsylvania forward. We think Pennsylvania has an antiquated system and we think that government should not only not be in the business of selling liquor but on many fronts, we think we should be moving to the private sector where opportunities make sense."
Gov. Tom Wolf, however, has made it clear to House leaders that he doesn't support privatization. Rather, he believes modernizing the state liquor stores is the way to produce new revenue for the state and address consumers' demand for more convenience.
"No matter what is in a privatization bill, the governor doesn't support privatization," said Wolf spokesman Jeff Sheridan.
At the very least, lawmakers should have a thorough understanding of the bill before voting on it, said Wendell Young IV, president of the United Food and Commercial Workers Union Local 1776, which represents the liquor store clerks.
"Most of those folks ran on a pledge of open, transparent government, vetting bills in public. If they believe what they said on the campaign stump, they ought to demand that of their leaders. Otherwise, they are not what they say they are," Young said.
On this particular bill, he notes there have been no public hearings where lawmakers and citizens could hear testimony about it. In fact, he said 53 new members have joined the House since the last time a public hearing was held on the issue. Young said even the House speaker might benefit from a refresher based on what he said during the recent PCN show.
On that show that airs statewide, Turzai said the bill called for auctioning off the 1,200 wine and spirit retail licenses that would be available for purchase. He repeated that statement in a phone interview with PennLive on Friday. He said beer distributors would get first dibs on buying the licenses "and what's not taken up, we'll auction those off ... that's how the buyers are being chosen."
Turzai's spokesman Steve Miskin called that "an honest error."
He said Turzai "lived and breathed" an earlier version of a liquor privatization bill that called for auctioning off licenses. That was one of several provisions that got struck from Turzai's original privatization bill and replaced with language that allows the licenses to first be made available to beer distributors for purchase and the rest on a first-come, first-serve basis.
Turzai also said on the PCN show, "The LCB has been operating in the red, in the red for the past 10 years." However, financial documents that detail the agency's history reflect profits of between $52.4 million and $128.3 million during that span. Even financial statements provided by the speaker's office don't appear to reflect 10 years of the LCB operating in the red.
The speaker also said the sale of the liquor system would bring in over $1 billion in upfront revenue. Young called that statement "just blatantly not true."
Maybe it's a matter of semantics but to Young, "upfront" means in the first year. Based on what he read in the privatization study done by Public Financial Management, the upfront revenue would be more like $137.5 million, although he said that figure doesn't take into account some of the personnel-related costs associated with dismantling the state system.
"Turzai ran on good government and vetting things and not liking backroom deals," Young said. "Not only is he not being honest about what is in the bill and the impact it would have on taxpayers in Pennsylvania, but there's 53 new legislators in the House since the last hearing on liquor privatization. And he says we don't need hearings on this? This is a disgrace. This is not the way our government should run."
Turzai said look around. Practically every state, including those around Pennsylvania, has turned its liquor business over to the private sector. It's time Pennsylvania gives up its Prohibition-era monopoly on the wine and spirits business.
"Government should not be in the sale of wine and spirits. We don't need to see much more than the fact that every neighboring state has a private sector approach," he said.
Sturla insists there are too many questions about the bill to rush into a vote just two months into the legislative session.
For example, he wants to know will Pennsylvanians be guaranteed the same selection of wine and spirits they have now? In Washington, which privatized its system in 2012, that has not proven to be the case yet.
The bill provides for up to 1,200 wine and spirit licenses, but if Walmart buys one does that allow it to sell wine and spirits in all of its stores? He also questions whether the convenience that consumers say they want will be allowed by this bill.
"I don't think the people who offered this thing know what's in the plan other than saying it's a privatization bill and that's good enough for me," Sturla said.
For the 29 freshmen legislators elected in November, some suggest they might not even know what questions they should be asking. However, to help educate them, House leaders provided testimony and transcripts from the last hearing on the topic held in 2011.
A few attended informational sessions that the House Republican leaders offered last week. In addition, Rep. Chris Ross, R-Chester, who chairs the House Liquor Control Committee, said lawmakers will have a chance to ask questions in the private caucus meetings to be held this week before the House vote.
"We're comfortable with this," Ross said. "This is another bill we adopted with a comfortable majority so I think we are just following through with what we did in the past."
Two midstate freshman contacted last week say they feel prepared to cast an informed vote on this bill and both are leaning toward supporting it.
Rep. Kristin Phillips-Hill, R-Jacobus, said she read through the pages of testimony from the last hearing and is doing her best to educate herself about the bill. She also said it was a topic that came up when she went door-to-door campaigning last year. People told her that the government doesn't belong in the liquor business and they want more convenience when it comes to buying alcohol, she said.
"It is incumbent on us to do our due diligence, do the research and go to the people who have the information and seek it out," she said. "I think I have the information necessary to make an educated vote on behalf of the people of the 93rd district."
So does Rep. Russ Diamond, R-Lebanon. He doubts that a public hearing on the bill would produce any new information that hasn't already been shared.
"Maybe from the outside it may look like we're rushing into this, but I think I have been provided enough information to satisfy my questions about what this legislation looks like," he said. "My main concern is I don't believe the commonwealth should be in the alcohol business. I believe customer convenience can be better served by private markets."
State Rep. Patty Kim, D-Harrisburg, listens to a debate that played out on the House floor in 2013 over a liquor privatization bill. The House Liquor Committee will take up a nearly identical version of that bill at its meeting today.
Rep. Patty Kim, D-Harrisburg, who is now in her second two-year term, said having had to vote on issues without the benefit of knowing the full context and history behind a bill in the last legislative session, she knows well what the freshmen legislators will go through this week.
Newbies, of which she still considers herself one, tend to depend on veteran lawmakers in their caucus to tell them about the bill and as new members of their caucus family, are less likely to vote independent of what the caucus wants because they are so new and not familiar with the process, she said.
She admits she felt pretty traumatized in November 2013 when she was asked to vote on a 127-page transportation funding bill that generates $2 billion-plus annually for transportation-related projects - and that was almost a year after she took office. The freshman face their first big vote in less than two months from when they were sworn into office.
"I don't envy [the freshmen] coming in and making a vote on such a contentious issue that will have a lot of amendments," Kim said. "It will be a tough time for them. It's like sink or swim."