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Senate point man says liquor privatization doesn't add up - abc27 WHTM

Senate point man says liquor privatization doesn't add up

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HARRISBURG, Pa. (WHTM) -

There are numbers, numbers, and more numbers flying around Harrisburg in the push to privatize liquor.

Four-thousand state store workers, billions in sales, millions in taxes; just to enumerate a few.

But one important number is $90 million. Over the past five years, the Pennsylvania Liquor Control Board averaged $90 million in profit after expenses and transfers.

Pennsylvania is in the booze business and business has been good. It turned $103 million in profit last year.

That's the number many lawmakers will focus on when trying to decide whether to sell off the state stores, as House Republicans are proposing. So what's the selling price of an asset that brings in $90 million a year?

Senate hearings this week estimated the House plan would generate $550 million in licensing fees.

"That's a bad deal," said Senator Chuck McIlhinney (R-Bucks/Montgomery), the chairman of the Law and Justice Committee.

That's a bold statement from the Republican who's currently crafting the Senate's privatization plan. He admits he's hesitant to dump a $90 million a year sure thing for $550 million.

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

The conservative Commonwealth Foundation strongly supports privatization and strongly disagrees with McIlhinney's assessment.

"The PLCB isn't making money any more than the IRS makes money," said CF's Nathan Benefield. "It collects money from consumers and taxpayers."

Benefield argues that turning liquor sales over to the private sector would more than make up for that $90 million. He says there would be more liquor licenses, more booze sold and more tax dollars generated.

But does the average drinker care where the money ends up? Poll numbers suggest that most consumers want the ability to purchase beer and wine at grocery stores. They also want to buy six-packs at beer distributors. Currently, they can only buy beer by the case at distributors.

Make those two changes and much of the complaint about Pennsylvania's system goes away, the theory goes.

McIlhinney agrees with that theory and intimated that he'll craft legislation that will create more outlets and more convenience while keeping Pennsylvania in the state store business. He wouldn't give specifics, but promised a bill within two weeks.

"Selling it outright right now, I don't think is something you're gonna see in the bill," he said.

There is a philosophical argument, and it's frequently made, that state government has no business being in the booze business. It's a valid point.

But for some lawmakers, like McIlhinney, it's completely besides the point.

Arithmetic is more important than philosophy. Does the math work? Is the plan that's on the table add up to a good deal for Pennsylvanians?

Those are questions a lot of lawmakers will be asking themselves in the next few weeks.

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