





































63

THREE STRIKES AND YOU’RE 
OUT? WHY THREE REPUBLICAN 

GOVERNORS  FAILED TO 
PRIVATIZE PENNSYLVANIA’S 
STATE LIQUOR MONOPOLY

GEORGE HALE

Kutztown University of Pennsylvania

After the repeal of Prohibition in 1933, Pennsylvania adopted one of the 
nation’s strongest governmental monopolies for the sale of wine and spirits. 
Since 1980, three Republican governors—Dick Thornburgh, Tom Ridge, and 
Tom Corbett—have tried to privatize the state’s monopoly. Despite support 
from more than 60% of the public, they failed. James Q. Wilson’s work on 
client politics, where costs are widely distributed and benefits are narrowly 
concentrated, partly explains why the state’s liquor policy is difficult to 
change. In addition, unionized workers in the state-owned liquor stores, 
the primary beneficiaries of the policy, are supported by the Democrats in 
the General Assembly. Moreover, the Republican governors were supported 
by only about half the Republican lawmakers, who were divided among 
themselves. So far the potential beneficiaries of privatization have been 
unorganized and on the sidelines. The evidence suggests that governors 
acting alone cannot change policy. Client politics and morality politics are 
likely to continue to block major reforms until or unless the issue is moved 
into the arena of interest group politics that Wilson describes.

Introduction

Pennsylvania is one of only two states operating a governmental 
monopoly of the selling of wine and spirits at both the wholesale and retail 
levels. This policy dates from the repeal of Prohibition in 1933 (Schell 
2006, 77), but it is supported by only a third of the state’s residents (George 
1997; Madonna 2012). Nonetheless, three Republican governors—Dick 



64

THREE STRIKES AND YOU’RE OUT?

Thornburgh, Tom Ridge, and Tom Corbett during the first two years of his 
term—tried but failed to privatize the state liquor monopoly.

Privatization of the sale of alcoholic beverages periodically surfaces as 
an issue for several reasons. First, many people view the monopoly system 
as expensive and inefficient. Others consider the sale of alcoholic beverages 
to be a matter best left to the private sector, as is the case in most states. 
Furthermore, the sale of state liquor stores (“state stores”) and the auction 
of private licenses can provide a significant one-time infusion of revenue. 
On the other hand, supporters of the system argue that it provides well-paid 
jobs with good benefits. Religious and social groups like Mothers Against 
Drunk Driving (MADD) oppose the private sale of alcoholic beverages 
out of fear that it could cause increased consumption and related social 
problems. Finally, opponents believe the state would lose ongoing revenues 
associated with the profits generated by state stores.

Research findings are mixed and support some claims on each side of the 
debate. Public Financial Management (PFM) concludes that the Pennsylvania 
Liquor Control Board (PLCB) has high personnel costs compared with 
other states (Public Financial Management 2011). Economists Seim and 
Waldfogel (2013, 835) contend that states with private liquor retailing have 
lower labor costs. They find that unionized store workers averaged $43,680 
in pay and benefits in 2007 compared with $21,000 for private employees in 
other states. Additionally, state stores average 7.9 employees compared with 
4.6 employees in privately owned stores.

Seim and Waldfogel (2013,850) also claim that the governmental 
system inconveniences consumers who must drive longer distances to shop. 
While the state operates only 600 stores, a private system could address 
potential demand for at least 1,500 stores. Nonetheless, some areas of the 
state benefit from the monopoly. Rural areas have better coverage than 
might occur under a free-market approach because 198 of 203 legislative 
districts have one or more state stores.

Seim and Waldfogel (2013) uncover no systematic evidence that prices 
for wine and spirits are higher in Pennsylvania than in neighboring states, 
yet many consumers believe otherwise. PFM estimates that 10%–30% of 
total sales for alcoholic beverages are lost to neighboring states through 
what is termed “border bleed” (Public Financial Management 2011, 9). 
The system also appears to result in approximately 15% lower alcohol 
consumption than in neighboring states (Seim and Waldfogel 2013, 852). 
Yet when PFM compared Pennsylvania with surrounding states, it found 
no clear relationship between whether a state uses either a public or a 
private system for selling alcoholic beverages and either its alcohol-related 
motor vehicle fatalities or its rate of underage drinking (Public Financial 
Management 2011, 11).



65

GEORGE HALE

On balance, the evidence suggests that unionized employees are 
major beneficiaries of current policy and that the public is inconvenienced. 
Pennsylvanians travel longer distances to purchase alcoholic beverages, 
and a significant volume of business “bleeds” into surrounding states. 
Conversely, reduced consumption is viewed by others as a social benefit. 
Finally, state stores are less efficient and less profitable than private stores, 
but the PLCB does transfer approximately $90 million to the state’s General 
Fund annually.

To understand why three governors failed to change the state’s policy 
for the sale of alcoholic beverages, I examine the creation of the state 
monopoly and then consider models of policy making that may explain why 
policy proves to be so resistant to change. I then review the three governors’ 
efforts to reform public policy and identify some obstacles to changing 
long-established policy.

Creating the Governmental Monopoly

Prohibition was an effort by Protestant, middle class, and rural 
Americans to reassert their values over a growing Catholic, immigrant, and 
urban population (Gusfeld 1963). The repeal of Prohibition came swiftly in 
1933 when the Democratic landslide of 1932 was interpreted as a referendum 
on the issue. The Twenty-first Amendment repealing Prohibition granted 
states power to control the sale of alcoholic beverages. States could remain 
“dry” and eight southern and plains states chose to do so. Many states, 
including Pennsylvania, also gave their local governments the option to 
remain “dry.” For states allowing the sale of alcoholic beverages, the major 
options were a licensing system or a monopoly system with government 
stores selling directly to the public. The monopoly option was promoted to 
address problems thought to be associated with private enterprise, including 
favoritism in licensing, political corruption, and overconsumption. Initially, 
15 states adopted the monopoly model and 25 established a licensing system 
(Meier 1994, 161).

In Pennsylvania, Republican governor Gifford Pinchot, a Progressive 
and a “dry,” pushed to establish the nation’s first governmental monopoly for 
the sale of wine and spirits. According to one observer at the time, Pinchot 
“is an out-and-out dry. He is just as dry in a wet city when he is campaigning 
as he is in a dry country district. There is not a drop of moisture in any of his 
speeches” (Beers 1980, 74). Establishing the monopoly was a remarkable 
accomplishment given that the state had voted to repeal Prohibition by 
better than a 3:1 margin. Lawmakers from rural areas overrepresented in the 
General Assembly gave Pinchot the necessary support, making Pennsylvania 
the largest and “wettest” state to adopt a liquor monopoly (Schell 2006).



66

THREE STRIKES AND YOU’RE OUT?

Public Policy Making

To understand why the state liquor monopoly has proved so resistant 
to change, I consider several models of the policy-making process. Agenda 
building is central to making policy. Downs (2005) depicts an “issue-
attention cycle” where triggering events spark public interest in an issue, 
thereby creating conditions for non-incremental policy making. Nonetheless, 
opportunities for policy change become limited as public interest declines 
and the issue is displaced by other issues. Cobb and Elder (2005) focus 
on triggering events but note that authoritative decision makers can place 
items on the agenda. Using a more sophisticated model that incorporates 
both external events and the actions of policy makers, Kingdon (2003) 
argues that policies change when three streams—problems, solutions, 
and politics—come together at critical times. As he notes, “A problem is 
recognized, a solution is available, the political climate makes the time right 
for change, and the constraints do not prohibit action” (Kingdon 2003, 88). 
“Policy windows open infrequently,” he adds, “and they do not stay open 
long” (Kingdon 2003, 166).

For James Q. Wilson (2012, 344–49), the policy-making process is 
shaped by the structure of an issue. He considers public policies in terms 
of a four-cell typology that reflects whether the perceived costs and benefits 
are widely or narrowly distributed. This typology also explains why some 
policies are harder to change than others. For example, the state monopoly 
on the sale of wine and spirits features aspects of what Wilson (2012, 344) 
calls “client” politics or “policy under which some small group receives 
the benefits and the public at large endures the costs.” Wilson (2012, 346) 
suggests that client policies are difficult to change because the costs are 
small and “payers have very little incentive to organize.”

Patashnik (2008, 16) builds on Wilson’s typology by asking what 
happens after enactment of “general interest reforms.” To enact reforms, 
policy advocates must overcome entrenched opposition by placing reforms 
on the agenda, neutralizing opponents, mobilizing supporters, and building 
winning coalitions. Patashnik (2008, 20) contends that adoption of general 
interest reforms also requires advocates to link reforms to salient issues. 
Often it is necessary as well to employ strategies that shift the venue for 
policy making to new arenas where self-interested economic groups lose 
their customary advantages. Finally, tactics such as compensation, side-
payments, and transition measures are needed to neutralize the opposition 
of beneficiaries or clients of the policy. To make reforms last, says Patashnik 
(2008, 19), it is essential to accomplish a “recasting of interests, institutions, 
and ideas.” He notes too that “reforms may persist for reasons other than 
those which prompted the reforms’ original adoption” (Patashnik 2008, 
161). When specific groups receive economic benefits from a policy, client 



67

GEORGE HALE

groups can grow up around a particular policy and shield it from change.
Aside from generic models of policy making, studies of policies 

regulating the sale of alcoholic beverages reveal a persistent role for 
“morality” politics. Since the 1930s, fundamentalist Protestant groups 
have helped shape policy regarding the selling of wine and spirits. Schell 
(2006) attributes the Pennsylvania monopoly system to the “politics of 
provincialism.” Meier and Johnson (1990) find that “dry” religious groups 
opposing alcohol consumption have a significant impact on the regulation 
of alcoholic beverage sales in many states. Frendries and Tatalovich (2010, 
315) identify a “strong linkage between Evangelical Protestant population 
and the decisions of U. S. counties to elect to be ‘dry’ counties, demonstrating 
the persistence of religion as a vital factor in some public policy debates, 
especially those falling into the realm of morality politics.” Similarly, 
Pennsylvania allows municipalities to remain “dry” and to ban the sale 
of malt beverages and distilled liquor. The dry municipalities are heavily 
concentrated in the state’s rural central and northern regions. According to 
Zelinsky (1995, 148–49), the “pattern of partial and complete prohibition 
seems to be related, to a significant degree, to ethnic and religious factors 
and to even more fundamental social attitudes, which do vary considerably 
among various Pennsylvania localities.”

 Significant regional differences within Pennsylvania are reflected in 
partisan identification, political ideology, and views about moral issues. 
Pennsylvania is a highly diverse state with two major urban centers and a 
vast rural area—the Republican-dominated “T”—in its central and northern 
regions (Kennedy 1999, 8–11). Lamis (2009, 230) uses five regions of the 
state to analyze public opinion. Republican identification and conservatism 
is strongest in the central and northern tier (see Table 1 below). Regional 
differences also exist on political and cultural issues. In a 2004 survey, 25% 
of central and northern tier respondents identified moral issues as their top 
concern. This region also is the one most likely to have “dry” municipalities. 
Furthermore, an August 2012 poll found support for “selling the state-owned 
liquor stores to private companies as a way for the state of Pennsylvania to 
balance its budget” to be weakest in the northern and central regions of the 
state (Madonna 2012).



68

THREE STRIKES AND YOU’RE OUT?

Table 1 
Party and Political Philosophy in Pennsylvania, by Region.

Region
Party Identification:

Republican

Political 
Philosophy:

Liberal
Top 2004 Issue:
Moral Values

Philadelphia 14% 35% 7%

Philadelphia 
Suburbs

45% 23% 11%

Northeast 37% 27% 15%

Pittsburgh & 
West

34% 20% 19%

Central & 
Northern Tier

54% 16% 25%

Source: Lamis (2009, 232–33, 237)

Policies involving the sale of alcoholic beverages thus involve 
aspects of morality politics as an overlay to what might otherwise be a 
straightforward contest over the role of government and private enterprise 
or a struggle among competing private interests. Schell (2006, 313) argues 
that religious and social conservatism not only explain the formation of the 
state monopoly but also are among the factors—along with union power 
and concern over the state’s revenues—that insulate the policy from change.

Efforts to Reform Public Policy in Pennsylvania 

Governor Richard Thornburgh

Several Pennsylvania governors have entertained notions of abolishing 
the state-store system. In 1934, Democrat George Earle complained that 
prices in state stores were too high. In 1968, Republican Raymond Shafer’s 
Liquor Code Advisory Committee reviewed problems with the state liquor 
system. The committee considered privatization but ultimately backed 
retention of the monopoly (Schell 2006, 302–4). In the 1970s, Governor 
Milton Shapp unsuccessfully proposed privatization of the state-store 
system (Beers 1980, 369). Republican Richard “Dick” Thornburgh’s 1978 
platform included privatization of state liquor stores, but his campaign 
focused instead on “corruption and mismanagement in state government” 
and the need to “clean up Harrisburg” (Thornburgh 2003, 74).

Thornburgh initially addressed improving PLCB management by trying 
to secure confirmation of his nominees as commissioners, a move that required 
a two-thirds vote in the state senate. According to Thornburgh’s former Chief 
of Staff, Richard Stafford, when Democrats blocked the governor’s efforts 



69

GEORGE HALE

to name a majority of the PLCB commissioners, Thornburgh “turned into a 
champion of privatization” (Stafford, personal communication). A Democrat 
also observed that if Thornburgh could not gain political control of the board, 
“he would join forces with those advocating abolition of the liquor control 
system in Pennsylvania” (Carocci 2005, 191).

Two years into his term, Thornburgh proposed dismantling the retail 
store system. He acknowledged: “I had stated its transformation to a private, 
consumer-oriented system as a goal in our 1978 campaign, but our efforts 
were largely rhetorical until, early in my second term, I then presented a 
detailed plan to accomplish that goal” (Thornburgh 2003,167). According 
to Stafford, the governor’s staff viewed the issue as a “hard sell”; for the 
governor, privatization was a matter of reform. “Established following 
the repeal of Prohibition,” he wrote, “the much-derided state store system 
had become a monument to inefficiency, inhospitality and occasional 
corruption” (Thornburgh 2003, 167). In 1983, a report by Touche Ross 
& Co. (1983) to the state auditor general identified needed improvements 
in PLCB operations and predicted falling operating profits resulting from 
inefficient pricing, merchandising, inventory, and distribution practices. 
According to Thornburgh (2003, 167), “poor service was driving many 
customers out of state for their purchases, causing a loss of revenue, while 
expenses continued to rise. I hoped declining profits, if nothing else, would 
sound the death knell for this dinosaur.”

Recognizing that the issue was a “hard sell,” Thornburgh’s advisors 
developed a “back-up plan” (Stafford, personal communication). While 
working on legislation for the sunset review of state agencies, which required 
the periodic reauthorization or termination of agencies, gubernatorial 
aides saw to it that the PLCB was scheduled for sunset review. Stafford 
noted that this effort would have given Thornburgh “an opportunity to 
block reauthorization in one legislative chamber or to sustain a veto of 
reauthorizing legislation” (Stafford, personal communication).

From 1981 to 1986, Thornburgh had no success pushing privatization. The 
state’s House of Representatives refused to vote on his plan. The Republican-
controlled state senate also took no action. S.B. 597, introduced in 1981 by 
Republican Senator Stewart Greenleaf, provided for a private-license system, 
but it remained bottled-up in committee. At Thornburgh’s request, Greenleaf 
sponsored S.B. 92 for a statewide referendum in 1983. Greenleaf also 
introduced S.B. 407 to abolish the PLCB. Both measures failed to reach the 
floor, as did S.B. 87, a bill introduced in 1984 by Senator Richard Tilghman to 
abolish the PLCB, and S.B. 1157, which had 17 co-sponsors.

Thornburgh (2003, 167) concluded that his plan “was stymied by a strong, 
if somewhat odd, coalition of organized labor, especially the powerful state-
store employees’ union; Bible Belt ‘drys,’ opposed to liquor in general and 
fearful of more convenience to consumers; and organizations like MADD.” 



70

THREE STRIKES AND YOU’RE OUT?

Democrats were solidly arrayed against Thornburgh’s plan. Vincent Carocci 
(2005, 213), an aide to the next governor, noted that “it was largely a jobs 
issue for them; the LCB’s three-thousand-plus employees enjoyed some sort 
of job protection either through unionized collective bargaining or by civil 
service status.” He continued, “A considerable number of Republicans also 
were opposed, though for entirely different reasons, having largely to do with 
unfettered access to the purchase and consumption of booze.”

As his tenure neared its end, Thornburgh grew more passionate about 
the issue. During a goodwill mission to the Democratic Republic of the 
Congo, Thornburgh bought a bottle of wine at a privately owned store. “That 
was the last nail in the coffin, the straw that broke the Camel’s back,” he 
said. “That Marxist-Leninist state has privatized liquor sales,” he exclaimed, 
“but Pennsylvania, this bastion of free enterprise, has a state-run socialist 
monopoly” (Gruson 1986). In 1986, the back-up plan took center stage and 
for a time it looked as though it might work. The PLCB was to be terminated 
unless reauthorized by the General Assembly. This maneuver transferred the 
advantage to Thornburgh, who needed only one chamber’s support to block 
reauthorization. After the House voted 158–40 to extend the PLCB for ten 
years, Republican leaders in the state senate kept the reauthorization off the 
agenda. In a 27–22 party-line vote held after midnight on the last legislative 
day of 1986, Democrats failed to get the extension issue onto the agenda.

In December 1986, Thornburgh issued an executive order to terminate 
the PLCB, to auction off 705 state stores, and to create the Alcoholic 
Beverage Control Coordinating Council to phase-out the agency by July 1, 
1987. The governor also transferred the PLCB’s licensing role to the Revenue 
Department, and he moved enforcement to the state police. Thornburgh 
(2003, 168) recalled, “With undisguised glee, I affixed huge symbolic ‘For 
Sale’ signs to retail outlets. Predictability, our opponents sought redress in 
the courts.” Thornburgh’s directive was challenged by a variety of parties. 
The Commonwealth Court overturned the executive order, but it also ruled 
that without legislative action by June 30, 1987, the PLCB would expire 
(Munshi 1997).

Nonetheless, Thornburgh’s leverage was limited because his 
privatization-supporting lieutenant governor, William Scranton III, lost the 
1986 race for governor to Democrat Bob Casey. Thornburgh’s efforts to 
dismantle the state’s liquor monopoly played out during the new governor’s 
first months in office. Casey had pledged to continue liquor control, 
conditioned upon passage of reforms to make the agency more responsive 
to consumers. A Casey legislative aide, Vincent Carocci, worked to gain 
passage of reforms and reauthorization. H.B. 1000 contained reforms 



71

GEORGE HALE

sought by Casey: placing enforcement powers with the state police, creating 
administrative law judges, and permitting consumer-oriented reforms such 
as discounts, variable hours, and credit card payment for purchases. An 
amendment submitted in the state House of Representatives to privatize 
wholesale and retail sale of wine failed by a vote of 163–34, but H.B. 1000 
passed the House on April 29, 1987, by almost the same margin with support 
from all Democrats and a majority of Republicans.

 On June 17, 1987, the state senate defeated by a vote of 39–10 Senator 
Greenleaf’s amendment to allow the sale of liquor and wine in private 
retail stores. Only one Democrat supported the amendment, as did barely 
a third of the chamber’s 26 Republicans (See Table 2 below). A majority 
of Republicans from the Philadelphia and Pittsburgh suburbs backed 
Greenleaf’s amendment, but only a single Republican among the 13 from 
the rural “Republican T” did so. On June 29, 1987, H.B. 1000 passed the 
state senate on an identical 39–10 vote.

Table 2 
Vote on Greenleaf Amendment to H.B. 1000 Allowing Privatization, by Party 

and Region (June 17, 1987).

Region

Senate
Democrats

Senate
Republicans

Yes No Yes No

Philadelphia 0 6 0 1

Philadelphia Suburbs 0 2 6 1

Northeast 0 5 0 2

Pittsburgh & West 1 6 2 2

Central & Northern Tier 0 2 1 12

Total 1 21 9 18

On the same day, the state House of Representatives approved H.B. 1000 
as amended 155–45. Democrats supported the bill 99–2, and Republicans 
supported it 56–43. Only Republicans from suburban Philadelphia opposed 
PLCB reauthorization. In the central and northern regions, just 16 of 43 
Republican lawmakers voted against reauthorization (See Table 3 below). 
These votes illustrate why Governor Thornburgh failed. Republicans 
were divided on the issue, with majority support coming only from those 
members representing Pittsburgh and suburban Philadelphia.



72

THREE STRIKES AND YOU’RE OUT?

Table 3 
Final Legislative Vote on H.B. 1000 Reestablishing the Liquor Control Board,  

by Party and Region (June 17, 1987).

Region

House
Democrats

House
Republicans

Yes No Yes No

Philadelphia 21 0 5 0

Philadelphia Suburbs 4 0 10 20

Northeast 17 1 9 2

Pittsburgh & West 42 1 5 5

Central & Northern Tier 15 0 27 16

Total 99 2 56 43

The 1992 Vote

During Governor Casey’s tenure, privatization got to a floor vote in 
the state House of Representatives one more time. In February 1992 a 
Republican amendment to a liquor-licensing bill proposed selling the 681 
state stores to the highest bidder subject to several restrictions designed 
to mollify opponents concerned about any expansion of liquor sales. No 
licensee could hold more than 10% of the statewide licenses or more than 
20% of the licenses in an individual county. The number of stores would not 
increase. Licenses also could not be transferred between counties. Proponents 
claimed the auction of stores and inventory would yield over $600 million 
to fund school district property-tax relief. The amendment failed 47–149 
(see Table 4 below); only a pair of the chamber’s 111 Democrats supported 
it. Republicans narrowly favored the amendment 45–40. Again Republicans 
representing suburban Philadelphia backed privatization 18–9. Elsewhere 
fewer than half the Republicans supported privatization.



73

GEORGE HALE

Table 4 
Vote on Amendment No. AO 417 to H.B. 495 to Auction off 681 State Stores 

(February 5, 1992).

Region

House
Democrats

House
Republicans

Yes No Yes No

Philadelphia 0 24 1 3

Philadelphia Suburbs 1 3 18 9

Northeast 0 17 4 8

Pittsburgh & West 1 42 6 4

Central & Northern Tier 0 23 16 16

Total 2 109 45 40

Governor Tom Ridge

In his 1994 campaign, Republican governor Tom Ridge, a former 
member of Congress from Erie, supported privatizing the liquor monopoly, 
claiming the state did not need to provide the service. Like Thornburgh, 
however, Ridge waited two years before presenting a plan. According to 
John Jones, Ridge’s point man on the issue as PLCB chair and now a federal 
district judge, Ridge got to the issue “ahead of schedule in 1996 when he 
was grappling with how to provide state funding for new sports stadiums in 
Philadelphia and Pittsburgh” (Jones, personal communication). After hiring 
Price Waterhouse to study the issue, Ridge’s team developed a privatization 
proposal. According to Jones, Ridge was “all in” on the issue: “The numbers 
made sense, and it was not a core function of state government” (Jones, 
personal communication).

In early 1997, Ridge proposed to sell the state stores and use the 
estimated $650 million in proceeds to fund the construction of stadiums and 
other projects. Neither Ridge nor Jones appreciated “how tough it would 
be” (Jones, personal communication). Once more unions, especially the 
United Food and Commercial Workers and its labor allies, religious groups 
such as the Pennsylvania Council of Churches, and MADD dominated the 
debate. Other unions, such as the United Electrical, Radio and Machine 
Workers of America, joined the fight to support PLCB employees (Schell 
2006, 307–8). As Thornburgh had done, Ridge proposed to privatize only 
the retail stores. After being criticized for his intended use of auction 
proceeds, Ridge broadened his proposal to include funding for education, 



74

THREE STRIKES AND YOU’RE OUT?

health, infrastructure, alcohol-law enforcement and awareness programs, 
scholarships, and tax credits for employers hiring state-store employees 
(George 1997, 65).

A poll conducted by Mansfield University found 60% of voters in 
favor of selling state stores (George 1997, 52). Notwithstanding its support 
among the public, the proposal remained in the state senate’s Law and 
Justice Committee during the 1997–98 legislative session. Ridge could 
not muster support for his proposal before the summer recess. Democratic 
legislators then held hearings around the state highlighting opposition from 
state-store employees, religious organizations, and groups such as MADD. 
After receiving multiple death threats, Jones was given a security detail. 
He later recalled the long hearings on the subject: “It was brutal. I had the 
stuffing kicked out of me. It was blood sport” (Couloumbis 2010). In short, 
he said, “I felt like George Custer at the Battle of the Little Bighorn” (Jones, 
personal communication).

While Ridge’s proposal sparked pitched opposition from employee 
unions and their allies among Democrats, Republican lawmakers looked for 
ways to duck the issue, as PLCB employees fanned out to tell lawmakers 
about the jobs to be lost in their districts. PLCB’s Chairman Jones fielded 
calls throughout the summer of 1997 from Republicans who “didn’t want 
to have to vote on Ridge’s plan” (Jones, personal communication). “The 
jobs issue was the key one,” recalled Jones. “Nobody wanted to vote to put 
thousands of people out of work. As a result, lawmakers never got to making 
decisions based on the numbers” (Jones, personal communication). One 
legislator noted, “Governor Ridge did everything in his power” to privatize 
state stores but got little support from committee members (Couloumbis 
2010). “This is a very conservative state,” he said, “They didn’t even want 
to hear about it” (Couloumbis 2010).

Ridge’s plan also lacked support from business. As Jones remarked, “The 
proponents were few and the objectors were many” (Twedt 2008). Noting 
strong opposition from state-store employees and those favoring the tightest 
controls, Jones reflected: “What that taught me from a political standpoint is 
that there is no overarching passion within the General Assembly, or in the 
public at large, for privatization. Unless and until there is a general hue and 
cry, it is very unlikely there will be a privatization initiative that succeeds” 
(Twedt 2008). The leader of the state-store employees union, Wendell 
Young IV, agreed. “There isn’t this critical mass screaming for change,” 
he observed (Couloumbis 2010). As Jones concluded, “Major initiatives 
do better when there are private entities pushing them. You need not just a 
governor, you also need lobbyists” (Jones, personal communication). That 
fall, Ridge abandoned the proposal when legislative leaders told him “this 
dog isn’t going to hunt” (Jones, personal communication); and it did not 
resurface after his 1998 reelection.



75

GEORGE HALE

Governor Tom Corbett

The issue of what to do with the state’s monopoly over the sale of alcoholic 
beverages receded until the 2010 gubernatorial election. In 2002, Democrat 
Ed Rendell defeated Attorney General Mike Fisher, who had championed 
Thornburgh’s liquor-control proposals as a state senator. Under Rendell, as 
under Casey, steps were taken to make the PLCB more businesslike and 
consumer friendly. A few discount state stores were established in several 
locations near state borders, selected stores were allowed to open on Sundays, 
and some stores were set up within grocery stores.

In 2010, Attorney General Tom Corbett supported privatization during 
his successful campaign for governor. Corbett entered office as a more 
ideologically committed Republican than either Thornburgh or Ridge. His 
support for liquor privatization fit into a broader framework of promoting 
free-market privatization solutions. He also proposed privatizing the state 
lottery and appointed a high-level task force to identify other privatization 
options. When Republicans also won control of the General Assembly, many 
observers expected privatization to become a top priority. The Republicans’ 
edge over Democrats in the state senate widened to 30–20, and they won 
a 111–90 majority in the state house. Public opinion seemed favorable, as 
60% of Pennsylvanians supported the sale of state stores. Many newspaper 
articles predicted action on the measure.

During his first term, however, Corbett wrestled with the impact of 
the Great Recession, a state budget that faced a potential $4 billion deficit, 
and his own no-tax pledge. With the governor preoccupied with the budget, 
House Majority Leader Mike Turzai took the lead on the liquor issue and 
introduced H.B. 11. The governor’s major contribution was in the form of 
agenda setting and commissioning PFM to study privatizing the wholesale 
and retail operations of the PLCB.

Supporters of the state monopoly also prepared for battle. Of the 
$216,550 contributed by the United Food and Commercial Workers to state 
candidates in the 2010 elections, a lone Republican received just $1,000; 
all the rest went to Democrats. The PLCB also proposed its own legislative 
package to undercut charges of being unresponsive to consumers. It sought 
permission to ship wine directly to residents, to remove restrictions on 
Sunday sales, to extend Sunday hours, to allow state stores to be retailers 
for the Pennsylvania Lottery, and to expand market-based pricing. During 
the spring of 2011, the House Democrats’ Policy Committee held hearings 
attacking Turzai’s proposal.

Nothing happened until after PFM issued its report in October 2011. 
PFM documented a negative 10-year trend where PLCB revenues increased 
at a 3.5% compounded annual growth rate, while expenses climbed at 5.5% 
annually (Public Financial Management 2011, 6). PFM found that most 



76

THREE STRIKES AND YOU’RE OUT?

PLCB stores are unprofitable and operating costs, personnel costs, and full-
time staff levels are high when compared with other control states. PFM 
also determined that Pennsylvania’s relatively low levels of consumption 
of wine and spirits partly resulted from high mark-ups and a tax structure 
that encouraged “cross-border” purchasing. In a finding seized upon by 
opponents, PFM also argued that tax adjustments were necessary to achieve 
fiscal neutrality so that Commonwealth revenues would continue to match 
current tax revenues and PLCB profits. PFM concluded that the number of 
retail licensees could be increased to approximately 1,500 (Public Financial 
Management 2011, 9). It also estimated the range of cost for retail and 
wholesale licenses to be between $1.1 billion and $1.6 billion.

Two months later, the House Liquor Committee gutted Turzai’s H.B. 
11. On a 15–10 party-line vote, the Republican majority torpedoed their 
majority leader’s proposal for full privatization by replacing it with an 
amendment allowing private beer distributors to sell wine. The amendment 
also retained the state stores. Committee Democrats opposed this provision 
as a partial privatization measure that would undermine the PLCB’s revenue 
stream. Moreover, even many beer distributors opposed it for fear that only 
the largest distributors could afford the enhanced license.

In June 2012, floor debate over privatization took place for the first 
time since 1992. Turzai offered a proposal to replace the more than 600 
state stores with 1,600 private outlets while also giving approximately 
1,000 beer distributors a chance to buy retail wine and liquor licenses. 
After three hours, debate was suspended at 10:00 p.m. on June 11 with over 
300 amendments still pending. Republican leaders had failed to corral the 
necessary votes. Opposition came from the state-store workers and the state 
AFL-CI0. Despite Turzai’s efforts to find allies by giving beer distributors a 
chance to buy retail licenses, the Pennsylvania Malt Beverage Distribution 
Association opposed the measure. It complained that allowing “big box” 
stores to obtain multiple licenses would damage the competitive position of 
the “Mom and Pop” distributors holding single licenses.

Despite supportive statements from the governor, some Republicans 
complained that his office was not sufficiently involved in securing 
votes for Turzai’s measure. The very groups—beer distributors, big box 
stores, convenience stores, and grocery chains—that might benefit from 
privatization also feared the potential harm they would suffer if their 
competitors dominated the bidding for licenses. These rivalries complicated 
the process of building a coalition in support of privatization. Republican 
John Taylor, chair of the House Liquor Committee, compared putting 
together the votes for privatization to solving a Rubik’s cube: “As soon as 
you twist one color, another color gets out of joint” (Krebs 2012).

When the General Assembly adjourned its two-year session in 2012, 
Turzai expressed optimism about the future chances for privatization but said 



77

GEORGE HALE

that next time the proposal needed to come from the governor (Couloumbis 
2012). Nonetheless, the prospects for change were not promising. The 
Republican-controlled state senate was not enthusiastic about the issue, 
and the 2012 election reduced the Republicans’ edge over Democrats to 
27–23. Additionally, Governor Corbett also confessed weakness by noting 
in November the difficulty of getting Republican support for his agenda. 
“Getting them all on the same page, and working in the same direction, 
is probably the most difficult job I’ve ever had to do,” he lamented (Levy 
2012).

In 2013, Governor Corbett was ready to push the issue in preparation 
for the 2014 election. Representative Turzai introduced H.B. 790, the 
governor’s proposal to auction off the state stores and use the expected $1 
billion in proceeds to fund education. It did not take long for Republicans on 
the House Liquor Committee to water down the proposal. They amended the 
bill to give beer distributors the first opportunity to purchase the new wine-
and-spirits licenses, and they protected the distributors from competition by 
insisting that grocery stores applying for a license to sell beer could do so 
only in a restaurant-style seating area within their stores. Additionally, state 
stores would not be sold immediately; they would be phased out over time 
and possibly remain open permanently in the most rural areas of the state. 
Word went out that Corbett badly needed a legislative win. On March 21, 
2013, following heavy lobbying by the governor’s office, Republicans gave 
Corbett a victory. The state house passed the weakened measure 105–90, 
with all Democrats and only five Republican lawmakers in opposition.

When the bill moved to the state senate, things slowed down. Unlike 
the larger chamber’s leadership, no senate leader championed privatization; 
several of them spoke instead of a desire to “modernize” the PLCB. The 
Law and Justice Committee waited more than a month before holding 
hearings, which were dominated by opponents concerned with increased 
liquor consumption and firms convinced that the bill placed them at a 
competitive disadvantage. Opposition from the employee unions and beer 
distributors, worried that privatization might increase competition from 
supermarkets and convenience stores, made it likely than any legislative 
action would result in modest reforms compared with those advocated by 
governors Thornburgh, Ridge, and Corbett.

Conclusion

Three times in thirty years Pennsylvania governors failed to dismantle 
the state’s liquor monopoly and replace it with a free-market system. All three 
governors encountered unified opposition from Democrats, and they were 
stymied by a divided Republican party. The opposing coalition skillfully 
mobilized its members—the United Food and Commercial Workers Union, 



78

THREE STRIKES AND YOU’RE OUT?

the AFL-CIO, Mothers Against Drunk Driving, the Pennsylvania Council 
of Churches, and beer distributors. Representative Dante Santoni, formerly 
the ranking minority member of the House Liquor Committee, described 
the coalition as “strange bedfellows” not accustomed to working together. 
“While many members feared the loss of union jobs,” he noted, “other more 
conservative lawmakers worried about the negative impact of increased 
consumption” (Santoni, personal communication). The formidable alliance 
of unions and social and religious groups encountered little opposition.

From the perspective of Kingdon’s model, it appears that favorable 
conditions did not exist in the problem, solution, and political streams. The 
governors unsuccessfully tried to mobilize support by linking privatization 
to other issues. Thornburgh tried “reform” and “inefficiency.” Ridge tried 
connecting it to financing for sports stadiums. Corbett linked it to relief for the 
state’s fiscal problems. None of these issues caught fire. Despite the success 
of Thornburgh and Ridge on a wide range of issues, they failed on this one. 
Corbett is pushing harder on his second try, but it seems likely that in some 
form the PLCB will continue to play a role in the sale of wine and spirits.

One problem with Kingdon’s model is that it does not explain why the 
timing may never be right on some issues. For example, all three governors 
encountered opposition within their party from the same areas of the state 
that supported Prohibition eighty years earlier. Sorauf (1963) and Kennedy 
(1999) may offer an explanation. They examined the classic issue of 
“delegate” versus “trustee” by asking Pennsylvania lawmakers whether their 
voting is guided more by their constituency’s views, by their own judgment, 
or by a combination of the two. Both scholars found Republican lawmakers 
to be more likely than Democrats to cite constituency as their decision-
making guide. Writes Kennedy (1999, 77): “In the tightly knit rural and 
small-town communities, perhaps a closer, more personal relationship 
develops between legislator and constituents. These areas tend to be 
represented by Republicans.” Rural Republican legislators and those from 
metropolitan districts may simply be reflecting different constituencies, and 
constituency may trump party on this issue.

Wilson’s typology of public policies provides a partial explanation 
of the outcomes. His model focuses exclusively on the distribution of 
economic costs and benefits without accounting for the intensity or 
persistence of public opinion based on noneconomic considerations. 
Nonetheless, Wilson’s description of client politics as resistant to change is 
convincing: “Client politics seems like an irresistible force, but sometimes 
it gets changed” (Wilson 2012, 146). Client politics rarely changes unless 
the public decides the beneficiaries are illegitimate or the costs of the policy 
become too high. So far the debate has taken place in the arena of client 
politics. The beneficiaries of the current policy—the state store workers, 
beer distributors, and their allies—are well organized. The groups that 



79

GEORGE HALE

might benefit from privatization have largely been on the sidelines. As Jones 
noted, “Governors alone can’t do the job” (Jones, personal communication). 
It is unlikely that policy will change unless the issue is transformed from 
“client” politics to “interest group” politics with the potential winners from 
privatization actively contesting the issue.

Patashnik (2008) argues that reformers often need to change the venue 
or the rules for making decisions so that the economic beneficiaries of 
current policy no longer have the advantage. Thornburgh recognized this 
idea by proposing a referendum and by maneuvering so that the sunset 
legislation might allow him to prevail. Patashnik (2008) also suggests 
that side payments may promote reform by providing benefits to others 
to buy their support. While Governor Thornburgh did not undertake this 
strategy, Ridge’s and Corbett’s proposals for using the proceeds from the 
sale of the state stores did not enlist any allies. Finally, none of the governors 
expanded the pro-reform coalition beyond a few general-purpose business 
organizations.

It is not likely that different tactics would have overcome the combined 
force of “morality” politics and “client” politics. Recent experience in other 
states shows the difficulty of the legislative route to policy change. Governor 
Bob McDonnell of Virginia twice failed in recent years to win lawmakers’ 
approval for privatization. By contrast, 60% of voters in Washington 
approved a ballot measure, backed by Costco and other “big box” retailers, 
to privatize the wholesale distribution of liquor and wine as well as the retail 
sale of liquor.

If Corbett’s second attempt at reform fails, it is unlikely to become a top 
priority for some time. Furthermore, incremental reforms will only reduce 
the pressure for major changes. Wilson suggests that client politics rarely 
change unless the beneficiary becomes illegitimate or the costs of the policy 
become too high. Absent a major scandal or a long-term deterioration in 
the profitability of the state-store system, the prospects for change appear 
limited as long as morality and client politics dominate the debate. Unless 
the potential beneficiaries of privatization coalesce, or unless legislators 
link privatization to an issue popular with rural Republicans, governors 
acting alone face long odds.

References

Beers, Paul B. 1980. Pennsylvania Politics Today and Yesterday. University Park, PA.: The 
Pennsylvania State University Press.

Carocci, Vincent P. 2005. A Capitol Journey: Reflections on the Press, Politics and the Making of 
Public Policy in Pennsylvania. University Park, PA: The Pennsylvania State University Press.

Cobb, Roger D., and Charles D. Elder. 2005. “The Dynamics of Agenda Building.” In Classics 
of Public Policy, ed. J. M. Shafritz, K. S. Layne, and C. P. Borick. New York, NY: Pearson 
Longman.



80

THREE STRIKES AND YOU’RE OUT?

Couloumbis, Angela. 2010. “LCB’s Epic Run Might Be Near End.” Philadelphia Inquirer. 
December 19.

Couloumbis, Angela. 2012. “Many Favor LCB Privatization.” Philadelphia Inquirer. November 1.
Downs, Anthony. 2005. “Up and Down with Ecology.” In Classics of Public Policy, ed. J. M. 

Shafritz, K. S. Layne, and C. P. Borick. New York, NY: Pearson Longman.
Frendreis, John, and Raymond Tatalovich. 2010. “A Hundred Miles of Dry: Religion and the 

Persistence of Prohibition in the U.S. States.” State Politics and Policy Quarterly 10 (3 
November): 302–19.

George, Mary Selene. 1997. “Privatization of Pennsylvania Liquor Stores.” Master’s Thesis. 
East Stroudsburg University.

Gruson, Lindsey. 1986. “Liquor Sales Divide Pennsylvanians.” New York Times. December 21.
Gusfeld, Joseph R. 1963. Symbolic Crusade: Status Politics and the American Temperance 

Movement. Urbana, IL: University of Illinois Press.
Kennedy, John J. 1999. The Contemporary Pennsylvania Legislature. Lanham, MD: University 

Press of America.
Kingdon, John W. 2003. Agendas, Alternatives, and Public Policies. New York, NY: Longman.
Krebs, Jeanette. 2012. “Pennsylvanians Keep Their Spirits Up Despite Another Liquor 

Privatization Stall.” Harrisburg Patriot News. June 23.
Lamis, Renee M. 2009. The Realignment of Pennsylvania Politics Since 1960: Two-Party 

Competition in a Battleground State. University Park, PA: The Pennsylvania State 
University Press.

Levy, Marc. 2012. “Corbett: Persuading GOP is ‘difficult.’” Philadelphia Inquirer. November 
27.

Madonna, G. Terry. 2012. “Franklin and Marshall College Poll Survey of Pennsylvanians: 
Summary of Findings.” Lancaster, PA: Floyd Institute for Public Policy.

Meier, Kenneth J. 1994. The Politics of Sin: Drugs, Alcohol, and Public Policy. Armonk, NY: 
M. E. Sharpe.

Meier, Kenneth J., and Cathy M. Johnson. 1990. “The Politics of Demon Rum: Regulating Alcohol 
and Its Deleterious Consequences.” American Politics Quarterly 18 (4, October): 404–29.

Munshi, Mihir A. 1997. “Share the Wine—Liquor Control in Pennsylvania: A Time for 
Reform.” University of Pittsburgh Law Review 58 (Winter): 507–47.

Patashnik, Eric M. 2008. Reforms At Risk: What Happens After Major Policy Changes Are 
Enacted. Princeton, NJ: Princeton University Press.

Public Financial Management. 2011. “Commonwealth of Pennsylvania, Office of the Budget, 
Liquor Privatization Analysis.” Philadelphia,PA.

Ross, Touche. 1983. “Pennsylvania Liquor Control Board: Limited Operations Review.” 
Harrisburg: Touche Ross & Co.

Schell, David A. 2006. “Keeping Control: Gifford Pinchot and the Establishment of the 
Pennsylvania Liquor Control Board.” Ph.D. diss. Temple University.

Seim, Katja, and Joel Waldfogel. 2013. “Public Monopoly and Economic Efficiency: Evidence 
from the Pennsylvania Liquor Control Board’s Entry Decisions.” American Economic 
Review 103 (2): 831–62.

Sorauf, Frank. 1963. Party and Representation. New York, NY: Atherton Press.
Thornburgh, Dick. 2003. Where the Evidence Leads: An Autobiogrpahy. Pittsburgh, PA: 

University of Pittsburgh Press.
Twedt, Steve. 2008. “Pa.’s liquor control system let’s state keep a tight grip on the bottle.” 

Pittsburgh Post-Gazette. January 27.
Wilson, James Q. 2012. American Government: Brief Version. 10th ed. Boston, MA: 

Wadsworth.
Zelinsky, Wilbur. 1995. “Cultural Geography.” In A Geography of Pennsylvania, ed. E. W. 

Miller. University Park, PA: The Pennsylvania State University Press.




