Path to privatize Pa. liquor sales awash in dissension

Pennsylvania Auditor General Jack Wagner is taking a shot at the proposal to turn state liquor sales over to the private sector.

There have been several different estimates about how much Pennsylvania stands to make by privatizing its liquor system. They range from $1 billion to $2 billion dollars in one-time revenue.

But Wagner said Wednesday those figures are pure speculation.

“What is the real number? No one knows what the real number is. And that’s the point I want to make today,” Wagner said. “No one knows what that real number is.”

House Majority Leader Mike Turzai, sponsor of a privatization proposal, accused Wagner of kowtowing to the labor union representing liquor store employees.

“Jack Wagner has no data, he hasn’t done any comprehensive study. His is just at the behest of the unions, on his way out the door, you know to try to buck up the unions,” Turzai said. “And I understand, he’s always been tied to the unions.”

A private firm reporting to Gov. Tom Corbett advised the state to privatize its liquor system, estimating a return of up to $1.6 billion.

Turzai said that’s the study that deserves attention.

“I stand by the Public Finance Management Report,” he said. “It’s an independently contracted agency to look at this. They’ve done work for Governor Rendell, they’ve done work for Governor Corbett, they are not Republican or Democrat, they are in the business of doing evaluations.”

Wagner said that, during tough economic times, the state shouldn’t be privatizing for the sole sake of privatizing. And, he said, the state Liquor Control Board brings in sorely needed revenue.

“Over the last five years, the taxes coming in from the liquor system have increased by 17.6 percent … 17.6 percent in the last five years. Taxes in general in the commonwealth of Pennsylvania have declined 1.1 percent in the last five years,” Wagner said.

The Legislature has a full plate for the remaining month of this year’s session.

It must settle the next decade’s district lines, both at the legislative and congressional level.

And the two chambers are negotiating a final Marcellus Shale natural gas drilling impact fee.

So, while Corbett has said he wants the state out of the liquor business, the proposal may not be voted on until spring.