From PA Chamber of Business & Industry

Last week, the House passed historic liquor reform legislation that Gov. Tom Wolf publicly signed on Wednesday, June 8. On Tuesday, the House voted 157-31 on concurrence in favor of H.B. 1690, which provides for the private sector sale of wine in grocery stores with a restaurant license; allows takeout wine sales in licensed restaurants, bars, hotels, supermarkets and delis; and lets about 14,000 holders of takeout beer licenses to sell up to four bottles of wine; among other improvements to the current state store system.

The new law makes no changes to the current sale of liquor and does not close any state stores.   Governor Wolf issued a statement calling the bipartisan effort “the most significant step the commonwealth has taken to reform our liquor system in 80 years.” For its part, the PA Chamber has long advocated moving Pennsylvania’s antiquated liquor sales system into the 21st century to give consumers the convenience and choice they overwhelmingly want; and make the state competitive in alcohol sales, in order to keep critical sales revenue in the Commonwealth’s borders each year.

Following the governor’s action, PA Chamber President Gene Barr released a statement thanking elected officials for enacting the popular reform legislation and allowing the private sector to responsibly sell wine. “We applaud the governor for signing this important reform legislation into law – which will help keep revenue within our borders and will expand private sector opportunities to responsibly sell alcohol and compete on equal ground with neighboring states,” Barr said. “This effort – which had bipartisan support – shows how the spirit of compromise can bring about positive change in Pennsylvania.”

Leaders in the PA House and Senate from both parties are optimistic that the 2016-17 budget will be passed on or near the June 30th deadline this year. A major motivator is that the entire House and half of the Senate members are up for reelection this fall. Details on how to close a $2 billion deficit have not yet been finalized.

The expectation of a budget deal was echoed by House Speaker Mike Turzai, House Appropriations Committee Chairs Bill Adolph and Joseph Markosek, Senate Appropriations Chair Pat Browne and Senator Jake Corman on Tuesday. All stated that this year’s negotiations are going much better than last year’s. The legislators met with chambers of commerce from across the state at the annual Chamber Day at the Capitol. The event was organized by the PA Chamber of Business and Industry and the Pennsylvania Association of Chamber Professionals. Republican leaders and the PA Chamber continue to push for reform of the state pension system, a major cost driver in the budget. The Commonwealth’s obligation for the coming fiscal year increases $500 million to $2 billion. Speaker Turzai stated that pension reform legislation currently in the House was agreed to by Governor Wolf last year. Any of the reforms being considered would not result in immediate savings for Pennsylvania taxpayers.

To help generate the additional revenue needed to meet this obligation, the expansion of gaming and the expansion of items and services subject to sales tax are being considered. Also on Tuesday, the House passed reforms to the state liquor system that will allow grocery stores to sell wine and expand beer sales at convenience stores. The reforms, which House leaders hope will lead to the eventual complete privatization of the liquor sales in Pennsylvania, is expected to generate an additional $150 million in revenue annually. Governor Wolf did not immediately indicate if he would sign the bill. Increases in the sales tax rate and personal income tax rates are off the table in the negotiations, according to legislators. Budget Secretary Randy Albright expects that some “gimmicks” and “one-time fixes” will be utilized by the legislature to bridge any remaining budget shortfall.