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Governor Corbett Receives Privatization Plan for Liquor Control Board

Press Release

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Location: Harrisburg, PA

Governor Tom Corbett today announced that the study for proposedprivatization of Pennsylvania's Liquor Control Board is finished and on his desk.

"Now begins the process of thoroughly reviewing each proposal and determining the best solution for all citizens of Pennsylvania and consumers,'' Corbett said.

"Pennsylvania should not be in the business of selling alcohol. It's time to get state government out of the retail trade business and instead focus on essential public services -- that's what taxpayers expect of us."

The study, conducted by Public Financial Management Inc., or PFM, wascommissioned by the Governor's Office to analyze the current system and evaluate the potential for privatization of its wholesale and retail wine and liquor operations.

In its study, PFM also evaluated various approaches to privatization, and researched current business and industry data to predict financial performance under a variety of scenarios.

Based on that analysis, as well as comparisons to other states, PFM recommended that a privatized system affords the state the best opportunity to improve on the current system as well as provide the best financial benefits for its citizens.

The nearly 300-page report recommends two positive alternatives, one of which is similar to the plan suggested last July by state Rep. Mike Turzai. The House majority leader's plan proposes creating retail and wholesale liquor licenses and auctioning them to the highest bidders.

"I support taking the state out of the liquor business and putting it back into the free market,'' Corbett said. "Majority Leader Turzai's proposal is the place to start.

"We need a proposal that limits the number of retail outlets to protect our neighborhoods. At the same time, the state needs to exit a business it should never have been in to begin with. Captive markets do not make for a free people.

"I am optimistic that, together with the House and Senate, we can craft an approach to privatization that will manage the sale and distribution of alcoholic beverages, improving the overall customer experience, while maintaining the health and safety of Pennsylvania's citizens and communities,'' Corbett said.

Should legislation offering a viable alternative to the current system reach his desk, Corbett added, he would likely sign it into law.

Corbett, along with his staff, will now thoroughly review the study and evaluate the options, including how to best disburse revenue from license sales. Proceeds from privatizing liquor sales could result in revenue which could be dedicated to a number of other goals, including the state's transportation needs.

"Our system of state stores harkens back to a time government thought it knew best what was good for us," Corbett said, noting that the Liquor Control Board was formed nearly 80 years ago following the end of Prohibition. "History has shown -- as it always will -- that the people, not government bureaucrats, know best how to live their lives.''

The report is available at the Liquor Privatization Analysis: Final Report link found in the left navigation bar of the Office of the Budget website at www.budget.state.pa.us.


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