New Castle News

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March 29, 2013

State store bill heading to Senate

CNHI — It took Peter Madison five years of working part time at liquor stores all over Northumberland County before he was able to land a full-time job in the system.

After 13 years of being a full-time clerk, now working at the state store in Shamokin, Madison is a union steward in the United Food and Commercial Workers union who is actively fighting to try to keep the state in the liquor business, despite a vote in the House that would dismantle the state store system. The bill now heads to the Senate.

“The system provides 5,000 people with family-sustaining jobs, not minimum wage jobs,” Madison said. “It keeps my family afloat and lets me pay my bills.”

Madison, who makes just over $37,000 a year, said Republicans have been misleading the public by repeatedly stressing, albeit correctly, that Pennsylvania is one of only two states with a complete monopoly on wholesale and retail liquor sales. But, of chief concern to advocates of the state-store system, there are 17 other states that maintain a level of government control over the sale of hard liquor.

Madison added he believes that because of the compensation and benefits, he values his job more than a clerk in convenience store or grocery store.

The entry-level base pay for a liquor store clerk is $22,396 or $10.77 an hour, state records show. The top base pay for a liquor store clerk is $42,015. Job placement ads for retail clerk positions around the state show that in most cases, entry-level pay is between $8 and $9 an hour.

While LCB employees are paid more than others in similar positions in the private sector, the state-store system’s expenses are covered by revenue from alcohol sales. And when all is said and done, there is still enough money left over at the end of the year for the liquor system provide $80 million in profit to the state.

House Republicans have estimated the House liquor plan would provide $1.1 billion in up-front revenue. But that number is based on the assumption that only one-quarter of the state’s beer distributors choose to purchase upgraded licenses to sell wine and liquor.

The fiscal note composed by the House appropriations committee estimates the House plan would only generate $27 million in ongoing revenue, far short of the $80 million now provided by the state monopoly. Republicans have argued the gap would be closed by increased taxes paid by the private retailers.

However, the uncertainty is bothersome, noted Sen. Elder Vogel, a Republican serving Allegheny, Beaver and Lawrence counties.

“I can understand that you would say that it is not a core government function,” Vogel said. “But replace the revenue for me.”

Vogel said the state is facing other expensive problems, such as the need to fix aging highways and bridges and the cost of an underfunding pension. With those bills looming, there will have to be careful consideration of the full economic blow that could come from dumping the liquor system.

Vogel said it is far from clear the Senate will be in a position to vote on the liquor plan in time for this year’s budget.

“It took the House two and a half years to pass a bill,” he noted.

“The House has a spent a lot of time on it,” said Sen. John Gordner, R-Columbia County, adding he would expect the Senate Law and Justice Committee would conduct “several” hearings on the liquor plan.

“We would be remiss if we did not spend some time to consider the proposal and its ramifications,” he said.

Senate Democratic leaders said they will push a legislative alternative that keeps the state store system in place.

Senate Minority Leader Sen. Jay Costa, D-Allegheny County, said there is “little or no support in the Senate Democratic caucus” for the House bill.

The House version of the liquor privatization bill passed with lawmakers sticking along party lines with 105 votes in favor and 90 opposed. The Senate advantage in the Senate is just 27-23, meaning every vote will count.

(Email: jfinnerty@cnhi.com)

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