PLCB: A Profitable Business Model Serving Rural and Urban Areas Under Assault Once Again

PLCB: A Profitable Business Model Serving Rural and Urban Areas Under Assault Once Again

Harrisburg, July 13, 2022 – It’s not really surprising that the highly profitable Pennsylvania Liquor Control Board (PLCB) -which not only serves urban and suburban customers, but also reaches deep into sparse rural regions – has faced constant attacks over the years by profiteers and their loyal allies in the General Assembly.

What should be surprising is that these partners, stifled by the elected General Assembly’s refusal to put at risk up to 5,000 jobs and billions of dollars in state revenue, are now willing to try a new tack: an end run around the legislative process to push their scheme past voters in a low-turnout referendum that would lead to amendment of the state constitution.

It is the latest in a series of referenda proposed by a minority of lawmakers who can get their bad ideas through the General Assembly.

PLCB control of alcohol distribution keeps it away from minors, provides thousands of good paying jobs, ensures availability and selection in small, rural markets and delivers billions of dollars to the state treasury. Preserving quality jobs and protecting taxpayer revenue are issues that appeal to Democrats and Republicans alike.

In 2016, the parties agreed to a plan to modernize the PLCB. The reforms included removal of restrictions on Sunday sales, flexible pricing, private wine sales for hotels and grocery stores that sell beer, direct shipment of wine and six-pack sales at service stations. The negotiated deal brought together both long-time advocates and detractors of the system – uniting Republicans and Democrats in support of commonsense changes.

These efforts, along with other reforms, have made the system highly profitable and an integral part of the revenue platform for Pennsylvania. According to the PLCB, in Fiscal Year 2020-2021, the PLCB achieved record net profits of nearly $265 million, which was almost a 27 percent increase from the previous year. That profit, which comes on top of taxes raised, would be entirely lost in privatization, and would need to be made up somewhere, probably by raising taxes which I would oppose.

Not only was the PLCB lucrative, but it contributed more than $800 million to support state and local government operations. The PLCB sent $765 million to the General Fund, another $29 million was earmarked for the Pennsylvania State Police, $5 million for Drug and Alcohol programs plus millions in licensing fees went to local governments.

Conspicuously missing from this debate is any talk of the morning after. As is often the case with binge behavior, voters are likely to regret privatization when they wake up to higher taxes and prices, crowding of problem stores in dense neighborhoods, and dramatically reduced public health. Ask the people of Washington state, who voted to privatize in 2011. Thorough academic research concluded “…in the years immediately following liquor privatization in Washington State, public opinion has changed enough to shift the result of the election from supporting privatization to rejecting it.” Washington now has the highest liquor taxes in the nation to make up for the lost revenue.

The revamped and modernized PLCB is the product of bipartisan work. There is no need to clang the privatization bells and there is little to no clamor for fundamentally altering the system. The PLCB system is working. It’s protecting minors from alcohol, ensuring a wide array of products, extending service into rural areas and churning revenue to relieve taxpayers of an even greater burden.

No one wins: U.S. Steel to ‘Set Aside’ Investment in the Mon Valley

No one wins: U.S. Steel to ‘Set Aside’ Investment in the Mon Valley

U.S. Steel recently announced plans to shelve a $1.5 billion investment in the Mon Valley Works. The three steel plants that would have benefitted from this historic investment are in Braddock, West Mifflin and Clairton and they employ thousands of skilled workers. All three facilities are in my Senate district and represent Allegheny County’s largest manufacturing employer.

There are no winners in this decision. Everyone lost. U.S. Steel lost because it is not investing in rehabilitating already incredibly efficient operations, staffed by an outstanding workforce. The steelworkers certainly did not win. Jobs will be lost from the closure of coke batteries and industry analysts are now speculating about the sustainability of the facilities over the long term. Our building trades didn’t win. They will lose countless of hours of work by thousands of workers who would have been involved in installing the new equipment.

Environmentalists, who sought long-term pollution controls and reduced emissions, lost because now more effective and efficient steel manufacturing apparatus remain in boxes, on barges and in warehouses instead of at work helping to clean the air and remove carbon. Our communities also lost. The steel industry that fueled the economic vitality of the region for more than a century will shrink again– economic activity and tax bases will suffer.

No one is a winner here.

Tens of thousands of jobs and families are tied to the sustainability of the plants. That’s why I was with Republican Gov. Tom Corbett at Clairton nearly ten years ago when he toured the facility to mark U.S. Steel’s then $500 million upgrade designed to produce more coke and lessen emissions. Plus, I strongly supported U.S. Steel’s announcement in 2019 that it would invest and build a sustainable casting and rolling process at Edgar Thomson in Braddock and a cogeneration facility in Clairton.

Now, as a result of U.S. Steel’s plan to “set aside” the development of the state-of-the-art technology at these plants, the region’s leaders are scrambling to make sense of what happened. As important, some local leaders are trying to find the means and the wherewithal to resurrect the project. That’s why I’ve called for a meeting in the Mon Valley of key leadership to find common ground and a way forward.

I applaud U.S. Sen Pat Toomey’s recently announced effort to find the root cause of why the project was abandoned. That is an excellent starting point, but we need to do more and explore how we can partner with the company to ensure that the facilities continue to operate with the industry’s most efficient workforce producing the highest quality steel, while it moves toward its goal of zero carbon emissions.

Given that we are at the precipice of a historic investment in our infrastructure, fueled by President Joe Biden’s initiative to rebuild roads, bridges, rails and expand broadband among other things, the disinvestment in our steel industry now makes zero sense. Plus, the three facilities are situated near and will have easy access to the new Mon-Fayette Expressway, enabling more world-class quality steel to reach burgeoning markets.

We must find out how we can restore, rebuild, and resurrect the investment.  Do we need more state investment, a commitment to quickly turn around permitting or a renewed federal resolve find a way through an exceptionally competitive international marketplace?

The production facilities of the Mon Valley produced the steel that built cities and towns in our formative years, defeated fascism when we were attacked nearly a century ago and served as the foundation of our local renaissance.

Granted we face new challenges. The world has changed, and we must work toward cleaner air and an improved climate — and we can do so if there is a partnership between willing manufacturers like U.S. Steel, our steelworkers, political leaders, and others who are critical to crafting a better future.

One thing is abundantly clear: the decision to halt the investment in rehabilitating our aging steel plants is debilitating. Tomorrow, however, is another day and another opportunity to bring key decisionmakers together. Let’s resolve to work together and find a way to make a loss of today, a win tomorrow.

Let Pennsylvanians Decide: Put Marijuana on the Ballot

Let Pennsylvanians Decide: Put Marijuana on the Ballot

Op-ed by Sen. Jim Brewster

Let all citizens have their say on legalizing marijuana.  

At our fingertips is a potential $581 million generated annually from legalized marijuana that could be used to establish substance abuse treatment facilities to help stem the deadly tide of drug overdoses and deaths across our state.

Legalize MarijuanaNationwide, 130 people die from drug overdoses every day. 

The funding would also be significant enough for Pennsylvania to embark on aggressive in-patient treatment programs and build new facilities to help those who are struggling with mental health issues. This not only would save individuals and families, it would also help prevent random mass shootings and other tragedies.

The state Auditor General estimates legalizing marijuana would yield at least $580 million in tax revenue.  Deploying that level of funding to treat drug abuse and mental health would save thousands of lives and relieve untold suffering.

Yet, before we can dedicate that money to help those in need, the General Assembly must first act to legalize marijuana.  To make informed judgements, not only will citizens have to be educated, but lawmakers will have to reorder their thinking.  Putting a question on the ballot and having voters cast votes for or against legalization can serve as a tool to inform.

It is appropriate that citizens have an avenue to express their opinion.  Legalizing marijuana is a big step and extraordinary action should be taken to ensure that the issue is fully vetted.  The results of an informational referendum would give lawmakers a real sense of the level of public support. It would also help show regional differences and interpret citizen preferences.  

Some argue that it is time that Pennsylvania add its name to the list of the other states that have legalized marijuana.  Others have pumped the brakes, arguing that marijuana is a gateway drug and that other drug problems would be exacerbated by legalization. 

Admittedly, there are many legislative and legal hurdles ahead before the issue can be placed on the ballot.  Perhaps the most substantial is the federal government’s designation of marijuana as a controlled substance and that its use, sale or distribution remains illegal.  Since the 1930s the federal government’s view has been clear and unchanged regardless of how many states have legalized medical or recreational marijuana. 

Ignoring federal law is not for the faint of heart.  However, other states have already ventured down this path without retribution.   

Before that high federal hurdle is cleared, there undoubtably will be a legislative challenge to putting the question on the ballot and letting citizens decide.  Past efforts to authorize a referendum were derailed by legislative opponents and courts who claimed that referendums were an unconstitutional delegation of power.  Those were different days with different facts and circumstances. 

This latter issue can be addressed by the nature and design of the ballot question itself.  Put in its proper context, a question put before the voters simply asking their views for informational purposes is not an official action; rather, it is an information gathering tool.       

The first step toward legalization was taken when Pennsylvania approved the use of medical marijuana. The next issue is to ascertain if Pennsylvania is willing to take the leap and legalize marijuana. Finally, we must determine how best to utilize tax proceeds.

The use of a ballot question to better understand how legalizing marijuana is viewed by a broader swath of Pennsylvanians would provide invaluable guidance as the legislature takes up this issue.

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Widening the View: Municipal Police Training Commission Gains New Perspective

Widening the View: Municipal Police Training Commission Gains New Perspective

Senator Jim Brewster

Sen. Jim Brewster

Rep. Barry Jozwiak

Rep. Barry Jozwiak

Op-ed by Sen. Jim Brewster and Rep. Barry Jozwiak

The horrific shooting at the synagogue in Pittsburgh is the latest high-profile example of police officers and other first responders using their training and professionalism in responding to a crisis.  By all reports, they acted quickly, courageously, contained the situation and limited the tragic loss of life.

Our thoughts and prayers go out the victims and their families, and we thank the first-responders who were on scene. 

The officers were in the line of fire and responded as they were trained to do.   Local police work is buttressed by experiences gained not only from years of police work, but also by a rigorous training regime developed by Municipal Police Officers’ Education and Training Commission (MPOETC).    

Police officers at all levels are constantly tested.  They need uniform, state-of-the art training, new perspectives and insight on how to better do their jobs.  Training upgrades, combined with modern equipment, plus heightened exposure to community policing makes the police better and communities safer.

It is important to help local police do their jobs better.  That’s why we sponsored bipartisan legislation in both the state House of Representatives and Senate to ensure that MPOTEC had a full complement of commissioners.  We were very pleased when Gov. Tom Wolf signed the legislation into law as Act 129.

The legislation allows a new member to be appointed to MPOETC.  

The seat on the board was previously specified for an appointee from the Federal Bureau of Investigation (FBI).  However, the Department of Justice advised against filling the seat, given the FBI’s reluctance to serve in a supervisory role with local police who they may have to investigate.  Under the new law, the seat on the commission will now be filled by an appointee of the Fraternal Order of Police (FOP).  The FOP representative will provide additional valuable insight and add to the expertise on the board.

The goal is for no police officer to be surprised by any situation: anticipate, train and repeat.  Then expand the knowledge base and train some more.  Good police work requires excellent training.  Excellent training requires more resources and different perspectives on training. 

Widening the perspective and gaining new insight into how to deal with conventional and unconventional law enforcement situations is critical to the safety of the officers who respond and the citizens they serve. 

MPOETC was created in 1974 to establish training and certification standards for municipal police.  The commission has wide responsibilities and is the arm of law enforcement training that handles certification in various aspects of the lethal weapons training, continuing education, and governs retired law enforcement officers. 

MPOETC is a critical piece of our system of training local police.  It is flexible and able to adjust its training regime to incorporate new initiatives and refine old practices. 

The commission was originally established in response to a federal effort to improve local police training.  Over the years it has been successful in developing innovative training protocols and educating police officers.  It continues to evolve and adapt.

Given that it is likely that the commission will have to deal with issues such as developing uniform use-of-force policies for local municipalities and community cultural awareness training as proposed in legislation, it is fortunate that it will have a full complement of members. 

Good police work begins with superb training.  Pennsylvania is fortunate to have MPOETC to prepare future police officers and keep those already on the job ready to handle any situation.  Our communities and our citizens deserve no less.  

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Sen. Jim Brewster formerly was mayor of McKeesport, a member of city council and vice-president of operations at Mellon Bank.

Rep. Barry Jozwiak was a Pennsylvania State Trooper, sheriff and farmer.  He is a member of MPOETC.

Democratic Senators to Gov. Wolf and General Assembly: Make Rebuilding Manufacturing a Priority

Democratic Senators to Gov. Wolf and General Assembly: Make Rebuilding Manufacturing a Priority

Senator Jim Brewster

Senator Jim Brewster

Senator Vincent Hughes

Senator Vincent Hughes

Senator John Yudichak

Senator John Yudichak

Op-ed by state Sen. John T. Yudichak (D-Luzerne), Sen. Vincent J. Hughes (D-Philadelphia), Sen. Jim Brewster (D-Allegheny/Westmoreland)

October 23, 2017 − National Manufacturing Day is the first Friday in October.  While noting the importance of manufacturing on this one day is important, the focus on rebuilding our manufacturing base should be a priority for the governor and the General Assembly each day. 

That is why we’ve joined together to sponsor a comprehensive package of legislation that is designed to address the needs of manufacturers, our workers and the communities where they live, work and raise their families. 

Our legislation seeks to better coordinate policy through the creation of a “Chief Manufacturing Officer;” infuse new dollars into targeted vocational and technical training; expand the Manufacturing Tax Credit and earmark credits to help build manufacturing in distressed communities while aiding disadvantaged, minority, women and veteran-owned businesses.

There is no doubt that manufacturing is a critically important part of our economy. Large employers who drive local economies and small mom-and-pop entrepreneurs are all key aspects.  According to the Center for Manufacturing Research, manufacturing accounts for 12 percent of our gross state product, employs nearly 10 percent of our workers — over 565,000 — and accounts for $33 billion in annual exports. 

The value of manufacturing is even more pronounced in rural areas.  A recent study by the Northeast Pennsylvania Industrial Resource Center indicates that manufacturing represents almost 15 percent of non-urban jobs, with average compensation more than 20 percent above the regional worker wage level. 

To ensure that manufacturing remains a viable and valuable force in our state economy, policymakers need to stay up with trends and accommodate changes in the market.   If we fail to work collaboratively, we will face losing more jobs and business opportunities.   According to the state Bureau of Labor Statistics, since 2001 Pennsylvania has lost 264,000 jobs in manufacturing and 5,400 establishments. 

There are a great many challenges that manufacturers face.  A recent study of national manufacturing by Ball State University indicated that manufacturing employment has been affected by three distinct factors: productivity, trade and domestic demand. 

Our workers and our manufacturing establishments have become more innovative, use more technology based systems and require fewer workers per location.  Yet, even with these well-entrenched changes now altering the manufacturing landscape, there is still room for lawmakers to aid large and small manufacturing businesses. 

Senate Bill 923 would create a “Chief Manufacturing Officer” within the governor’s office to provide advice on economic policy and be a singular voice for manufacturers at the highest level.  The measure also establishes a “Manufacturing Competitiveness Board” to help develop manufacturing strategy. 

Another bill (Senate Bill 924) would direct up to $5 million to a grant program for vocational technical schools, vocational programs and equipment purchases.   The legislation would increase the maximum loan amount from $5 million to $7.5 million and authorize loans to retrofit equipment.  This investment would help schools acquire the equipment necessary to produce a skilled workforce that can be employed in state-of-the-art manufacturing operations. 

The third legislative piece in the package would maximize the Manufacturing Tax Credit.  Senate Bill 925 would increase the credit cap to $12.5 million from its current $4 million, expand the credit to include job training costs, and allow small manufacturers to apply jointly for the credit.  A $2.5 million piece of the tax credit would be reserved for businesses located in distressed communities in addition to disadvantaged, minority, women and veterans owned businesses. 

Our legislative work is designed to follow up on a detailed report authored earlier this decade by the Governor’s Manufacturing Advisory Council.  In this sweeping analysis of manufacturing, the blue-ribbon panel recommended several actions that could aid manufacturing.

Specifically, the study reported that 82 percent of manufacturers had a serious gap in worker skill level and 74 percent indicated that the skill-gap hampered the ability to expand.  Meanwhile, 78 percent of manufacturers were negatively impacted by a lack of access to capital. 

Moreover, the report emphasizes the need for a single point of contact in state government to connect manufacturers to solutions.  The report also recommends focusing attention on information sharing to enhance productivity. 

Policy proposals to address each of these needs are key parts of our legislative plan. 

The series of legislative measures that we’ve offered will address the critical needs of manufacturers.  In this month when Manufacturing Day is recognized, it is time for the General Assembly and the governor to focus on policies to rebuild our communities and make our workforce a priority.

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Fighting Opioid Abuse: Mandatory Treatment, Opioid Limits, Stiff Sentences for Dealers

By: Sen. Jim Brewster (D-Allegheny/Westmoreland)

Limiting opioid prescriptions, mandatory treatment, plus stiff penalties for drug pushers who possess illegal guns – these are the three key weapons in the fight against opioid and heroin abuse.   

Those three elements form the bulwark of a legislative package I’ve offered called the “Prevention Recovery and Enforcement Act.”

Opioid and heroin addiction has impacted every community.  Families throughout Pennsylvania have been torn apart and communities devastated by heroin abuse.  The statistics are startling: Ten Pennsylvanians die each day from opioids; Pennsylvania has the highest number of drug overdoses by 12 to 25-year-old men and the eighth highest among all individuals; 1,341 overdoses have been reversed by police.  I could go on. 

To deal with this intractable problem, tough solutions are necessary.  My Prevention Recovery Enforcement Act plan is simple, straightforward (Senate Bills 710-712) and is the kind of addiction game-changer Pennsylvania needs.

First, we must prevent addiction, and that can be effectively done by limiting access to opioids.  My plan would limit the amount that may be prescribed to 100 morphine milligram equivalents (i.e. opioids) per day.  The plan is in line with Centers for Disease Control and State Board of Medicine recommendations.  According to the guidelines, doses above 100 milligrams a day pose a significant risk of harm and are not legitimately associated with pain control.  

Second, while mandatory or involuntary treatment is a significant step, it is a necessary one given the problem.  We know that short-term treatment often fails to reduce recidivism.  During testimony at a Senate Policy hearing last year, many from the medical community lamented that it often takes a minimum of nine months of treatment for most addicts to have any hope of recovering. Long-term commitment in a facility with a dedicated treatment protocol is imperative if we are serious about curtailing heroin dependency. 

That’s why I’ve proposed that a person charged with a non-violent criminal act who is treated by first responders for drug addiction be committed to a treatment facility — if a court agrees that they are addicts.  The person charged, his or her attorney or the district attorney can initiate the mandatory treatment process. The initial treatment period would be 12-months.  If the person successfully completes the treatment regimen, the underlying criminal charges could be dismissed. 

Third, we need to stiffen penalties against heroin pushers who are not addicts but who possess illegal guns while dealing drugs.  As McKeesport’s former mayor, and, in my long-experience working with law enforcement, I’m certain tough penalties for armed drug dealers would deter the proliferation of drugs on the street. 

Why this approach?  While excellent work has been done by the Gov. Tom Wolf, Sen. Gene Yaw and others on battling opioids, I think we can add other tools to the law enforcement/ health care toolbox that would help tackle the problem.

The pieces of my Prevention Recovery Enforcement Act take on the problem at its roots by preventing the crisis from occurring in the first place; treating the affliction via mandatory treatment; and removing the source of the problem from the streets. 

While the program I’ve outline comes with additional costs, many of these expenses can be handled by a reduction in crime associated with reducing drug dependency, using Medicaid to cover treatment for those eligible and deploying drug seizure funds to help pay for treatment. 

While state and federal resources can be stretched to help handle costs, it may not be enough.  Stakeholders in the treatment community, insurance companies, health care facilities and others have a role to play in helping close the funding circle. 

The responsibility for dealing with the heroin crisis belongs to each party in the law enforcement and the treatment chain.  And, it is only by working in concert with addicts, their families and loved ones that will we will save more lives, protect communities from this scourge and build stronger futures. 

We have come a long way in trying to address the opioid/heroin addiction problem.   Yet, more can be done.  This comprehensive approach outlined in my Prevention Recovery Enforcement Act is a way forward that will pay significant dividends.  

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Energy Extraction Tax Would Help Fill Budget Gaps

By: Sen. Jim Brewster

The governor, legislative leaders and lawmakers have spent a good portion of the last six months looking in every nook and cranny in search of revenue to balance the state’s $31.9 billion budget.  What they have been unable to do, however, is to push past ill-founded arguments and industry scare tactics to tap the reservoir of available funding that lies 5,000 to 9,000 feet beneath most of Pennsylvania.    

A reasonable shale extraction tax is a readily available source to ease current budget pain, maintain assistance to local governments impacted by drilling and provide a long-term funding stream for critical budget needs. 

I have offered a proposal that would fashion a responsible Marcellus Shale extraction tax to be layered over the current Act 13 impact fee.  The rate of the total levy would be capped at 5 percent – split between the current impact fee and a new severance tax. This rate is well in line with rates imposed on energy extraction in other states. 

The value of unconventional gas well production was $7.8 billion in 2016.  Gas extraction companies paid $173 million in impact fees for an effective tax rate of 2.2 percent.  The impact fee rate is expected to decline to 1.2 percent by 2018.  The average effective tax rate since 2011 has been 2.4 percent. 

If my proposal had been adopted in 2016, impact fee payments of $173 million could have been made to counties and municipalities statewide — while an additional $216 million would have been available to fund investments in education.  

The effective rate of the impact fee of 2.2 percent would have been augmented by a 2.8 percent severance tax.   If a 5 percent tax rate had been imposed since 2011, Pennsylvania citizens would have benefited by having an extra $2.4 billion in tax revenues available to meet needs, instead of the $1.2 billion in impact fees that were generated.  Arguably, had this tax been imposed, the annual scramble to cobble funds together to balance the budget would have been a thing of the past. 

An energy severance tax is limited in scope and its burden would not fall on working families.  In fact, an increasing portion of the tax would be paid by international purchasers as pipelines and distribution networks are completed.  Plus, if the tax is levied responsibly, the market would remain competitive and shale drillers would be able to continue to invest and create jobs in Pennsylvania.  It’s a win-win-win for the taxpayer, consumer and the industry.  

Given the recent swoon in the development of new gas wells and the low price of the commodity, there has been considerable reluctance to move in the direction of a shale tax.  While the market has been recently stagnant, ample evidence exists that a burst of drilling activity is on the horizon. 

New pipelines are under construction, or being planned, to transport Pennsylvania energy to both domestic and international markets.  In fact, the International Energy Agency predicts that production from the Marcellus Shale will increase by 45 percent by 2022.

Still, in the face of this positive news, detractors pan the potential of a new energy tax because they fear disinvestment by gas drilling companies.  Lost in their argument is the clear lesson learned by the existence of the current meager impact fee. There is a tenuous relationship between energy tax rate and new development.  

If low taxes or a shallow impact fees result in heightened investment and booming growth, then Pennsylvania – because it has a low tax rate — should be benefitting now from a drilling bonanza even in a soft market, regardless the price of gas.   Moreover, with the paucity of gas and deep reserves, Pennsylvania will always be attractive to gas drillers.  If some drillers feel the need to leave, they will be replaced by others who are interested in developing the play.  That’s a free-market driven economic choice.   

The truth is, a decision whether a well is drilled has little to do with energy extraction tax rates.  The industry will drill a well when there is demand.  It’s been that way in the energy industry since the days of the Drake oil well.   

The cost of failing to responsibly tax the energy industry for last half decade have been steep and significant.  In an era when taxpayers are being asked to do more, shale drillers need to do their part.  It’s well past time. 

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Brewster: Too Much, Too Soon; House Republican Plan to Further Expand Liquor Sales Goes Too Far

Op-ed by Senator Jim Brewster

Just last year, a significant effort to modernize liquor sales in Pennsylvania was signed into law as Act 39. The new law expands locations where wine can be sold to include grocery stores, restaurants and hotels, allows the direct shipment of wine and the auctioning of revoked or not renewed licenses – a sale that involves approximately 700 additional licenses. 

These new locations and means to purchase wine are in addition the more than 600 retail wine and spirits stores that are operated by the Pennsylvania Liquor Control Board. 

Now, less than year after the new, bipartisan law was adopted, House Republicans are pushing two more “reform” measures that would expand sales venues and privatize operations.  These new proposals would dismantle the system, reduce state revenues, disrupt working families, and aggressively spread liquor.  The provisions contained in House Bill 991 and House Bill 438 are too much, too soon and go too far. 

The House Republican plan would expand liquor sales by adding over 2,000 franchise stores and permit retailers who now sell wine to sell liquor.  If these measures become law, Pennsylvania would be awash in both liquor and red ink.    

Those on the short end of this plan include our taxpayers – revenues and taxes are expected to yield nearly $750 million in 2016-17 – and the 4,000 workers and their families who now serve the public in the wine and spirits system.  

Proponents note that the expansion of franchise stores may yield $300 million in additional revenue and that an expanded system would better serve rural areas.  However, others, including the Pennsylvania Budget and Policy Center (PBPC), have a different read.  According to the PBPC, privatization would cost the state the liquor system’s profits and slash tax revenues by half.  The center estimates that the total cost to the taxpayer of privatization could be $400 million per year.

The plan would put the liquor system into uncharted waters.  There is little solid information available about the value of franchises in rural areas or what the market value of the franchises would be if they were geographically assigned to regions where few people live.  As important, advocates have not produced any data, survey, study or analysis that conclusively proves that this approach is consumer friendly.  Will a wide range of products be available at affordable prices if profit-driven franchise stores in rural areas dictate availability?

Given that Act 39 is new and the impact of the changes made have not yet been fully examined, it would be useful to give the modernization approach a chance to work.   The more than 4,000 workers that serve the public via the new consumer-friendly wine and spirits store approach should be given the opportunity and time to put a business plan in place.

As someone who worked in the private sector for decades, I know that change in business is healthy and profitable if there is time to let markets react and business plan improvements take hold. 

The General Assembly and Gov. Tom Wolf only recently opened the liquor system and modernized its operation.  Time and analysis are needed to evaluate if other steps should be taken to ensure that a consumer-friendly, controlled and fully operational system that is generating solid value for taxpayers and family-sustaining jobs for workers should be changed again. 

This plan offered by House Republicans is too much, too soon. 

 

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State Troopers Raise Retirement Tsunami Warning Flags

Op-ed Column by Sen. Jim Brewster

The Pennsylvania State Troopers Association has posted bright flags warning of a potentially devastating trooper retirement tsunami looming just over the horizon. If the storm comes together and the retirement tidal wave hits, it would severely strain police resources, impair our ability to deal with domestic terrorism and dangerously compromise the safety and security of our citizens.

In media reports, the troopers’ association stated that 2,000 Pennsylvania State Police (PSP) troopers will become retirement-eligible within the next three years. These retirements – if they occur in bulk – will swell the current trooper deficit (417 vacancies below the 4,719 authorized complement) and create long-term staffing problems that will reverberate for a decade or more to come.

Recent trooper retirement statistics underscore the retirement trend at PSP: Over the last five years (2012-2016 inclusive) the PSP averaged 216 retirements. For the previous 5-year period, an average of 153 troopers retired. So far this year, 226 troopers have retired.

More needs to be done to fill the ranks. An expedited recruitment and training program featuring a rapid succession of well-stocked cadet classes would solve the problem. However, this approach costs money – and lots of it.

Assuming the accuracy of the retirement storm warning, the question is this: In an era of fiscal belt-tightening and partisanship that jeopardizes even consensus appropriation lines, is there bipartisan will to invest significant state resources as a down payment to address the problem?

While the governor and budget negotiators acted aggressively this year and added additional funding to the state spending plan to pay for three new cadet classes, these new troopers may only be a temporary supplicant.

Fewer troopers, greater responsibility and an ever-expanding coverage area have placed an incredible burden on the PSP. Troopers are being called on to patrol more communities and citizens every day. When local municipalities disband their police or fail to organize, equip and support a local police force of their own, the state police are required to fill the policing void.

According to a Penn State study, the PSP provided full or part-time coverage to 67 percent of the state’s 2,562 municipalities.   In rural Pennsylvania, the study found that the state police accounted for 92 percent coverage, with most municipalities requiring full-time service. The study concluded that the state police cover, either full or part time, 3,388,659 citizens per year, with that figure growing each year.

Last year, the Pittsburgh Tribune-Review completed an in-depth examination of PSP staffing from 2008-2014. The review found that while the number of Pennsylvanians relying on state police increased, the number of officers assigned to regional stations for patrols declined 17 percent. At three-quarters of the stations, staffing levels fell despite the addition of new troopers.

The state budget provided millions in additional funding to pay for training three new classes of troopers. However, given the exceedingly high cost to train each flight of 100 cadets, the expense of restocking the ranks is steep.

To compound the problem, legislators and transportation advocates have grown wary of diverting Motor License Fund dollars from road, bridge, mass transit and multimodal projects. In fact, the PSP road revenue spigot that is now wide open will soon be ratcheted-back as a result of the passage of new restrictions in the Fiscal Code (Act 85). Given this change, this future funding challenge must be addressed.

Lawmakers and the administration have an obligation to examine PSP staffing concerns and craft an aggressive, yet responsible and fiscally sound, approach to ensure that the safety and security needs of Pennsylvania’s citizens are met. Perhaps that means a greater investment from the state’s General Fund or forcing well-heeled municipalities that now rely exclusively on the PSP for police services to pay a reasonable fee for coverage they currently receive for free.

The retirement tsunami warning flags are flapping ominously. Let’s hope our policymakers pay heed.

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