If 48 other states around America have found a way to relinquish total control over the sales of wine and liquor why is there such a ruckus in Pennsylvania on the issue of privatizing liquor sales, wondered Shalimar Blakely, executive director of the Philadelphia African-American Chamber of Commerce.

Ending state control of the sale of liquor and wine in Pennsylvania — inclusive of closing the 600 ‘state stores’ is a major item on the legislative agenda of Governor Tom Corbett, a Republican, who feels the time is long since past to “put our liquor system into private hands.”

In March the Republican controlled State Legislature passed a liquor privatization measure that is now in the State Senate for consideration.

If privatization is approved in the legislature and signed by Corbett, who is awaiting such a measure, Pennsylvania will end its dubious distinction of being one of only two states in the U.S. to retain total control over the retail sales of liquor and wine. Pennsylvania and 17 other states retain some form of control over liquor and wine sales. State government in West Virginia, for example, is the wholesale distributor of distilled spirits but not wine and malt beverages.

“I plan to do further research into why privatization is working in 48 other states and how it can work in Pennsylvania,” Blakely said, adding she plans to poll the Chamber’s membership on the issue.

When members of the Pa. Legislative Black Caucus discussed privatization of liquor sales during a meeting earlier this year, “no member voiced support” for the controversial issue, PLBC Executive Director Brandon Flood said. All PLBC House members present for that March vote in the House approving privatization voted against it, Flood said.

PLBC members have two principal concerns with privatization, Flood said: (1) increased accessibility of liquor through increases in retail sales outlets in areas that don’t need more liquor availability; and, (2) the impact on jobs now held by state workers employed by the Pennsylvania Liquor Control Board, the state agency in charge of wholesale and retail liquor sales and liquor law regulation.

While a finalized privatization plan is not in place as yet, proposals call for replacing the 600 state stores with at least 1,200 new private liquor sale stores statewide plus allowing the sale of liquor and wines in existing supermarkets, convenience stores, pharmacies like Rite-Aid, big-box stores and beer distributors that purchase proper licenses.

Proposals also call for eliminating 3,200 of the PLCB jobs in retail (state stores) and wholesale operations. One study on privatization conducted for Pa’s Office of the Budget stated “separation costs” related to just unemployment compensation and paid leave involving the furloughed PLCB workers “will be significant.”

That study released in October 2011 estimated $68.2-million in just unemployment compensation payments between 2014 and 2017 for the 2,302 PLCB workers anticipated to seek unemployment compensation due to difficulties with obtaining other employment.

“Governor Corbett promised [PLBC] workers first crack at jobs in government and private stores,” PLCB Director Flood said. “However, this governor has established a track record of reneging on pledges.”

That state Budget Office privatization study noted that state government hiring freezes and other budgetary restrictions are “key challenges to placing a significant” number of furloughed PLCB employees in other state government slots. Compounding those challenges is the fact that opportunities for possible state government job slots for PLCB workers are better in the Philadelphia/Pittsburgh/Harrisburg areas with significantly less options available in rural counties, that study stated.

Gov. Corbett and his supporters of privatization inside and outside of state government argue that increasing the number of outlets selling liquor will translate into increases in employment opportunities for furloughed PLCB workers and other job seekers.

That rosy picture of more jobs is dimmed by findings in that state study detailing how the salaries now earned by PLCB state store workers will not be matched in privately owned stores. For example, a PLCB cashier earns $31,200 yearly, while private sector cashiers working in New Jersey earn $20,070 and $21,070 in Maryland.

“Private sector retailers, on average, are not likely to provide comparable salary and benefits to those that the PLCB employees receive,” stated that “Liquor Privatization Analysis.”

The issue of liquor privatization ignites supporters and opponents.

The Pa. Manufacturers Associations favors privatization while Mothers Against Drunk Driving opposes it. The Commonwealth Foundation supports privatization citing such PLCB ‘boondoggles’ as creating its own private label wine using wines bottled in California not Pennsylvania. The head of Pa.’s Fraternal Order of Police opposes privatization, telling state legislators in testimony that privatization will spawned higher crime rates and drain police resources, a contention disputed by the head of the Pa. State Police.

PLCB revenue to state coffers, averaging hundreds of millions annually, funds the Pa. State Police $20-million yearly cost for enforcement of the state’s liquor laws that include monitoring compliance in 20,000 establishments currently with liquor licenses like bars and restaurants. Under privatization state government would have to find enforcement revenue elsewhere, like from privatization licensing and renewal fees.

Privatization supporters said costs for alcoholic beverages will decrease, selections will increase and the Pa. residents going to out-of-state to buy will lessen. Yet, such claims are disputed. When the state of Washington privatized a few years ago prices increased 10-20 percent and selection decreased in many stores. While Pa. residents crossing-borders to purchase liquor may decrease in NJ or Ohio, Delaware still has an advantage with no state sales tax.

Bilal Qayyum, president of the anti-violence Father’s Day Rally Committee, said his key concern with privatization is controlling the volume of liquor in communities already reeling with problems of joblessness and poverty.

“The current system is not perfect but now there is more control over sales. We remember what happened with those Stop-&-Go’s selling beer to teens,” Qayyum said. “Look at casinos. Those businesses were supposed to be windfalls to cities and that hasn’t happened.”

Qayyum, a former economic development official for Philadelphia city government, raised a little discussed issue: economic/ownership opportunities for minorities under privatization.

“If privatization goes through, what are the opportunities for minorities?” Qayyum said. “Are we going to be locked out of this also?”

While powerful entities and prominent individuals wrangled over privatization, the general public places that issue in low priority status according to a recent poll by the respected Franklin & Marshall College Poll.

The poll, released May 8, found Pennsylvania residents placed privatizing liquor next to the bottom of 11 priorities, far behind improving the state’s economy, creating new jobs and improving public schools. Further, that poll found public support for privatization slipping since the beginning of 2013.

Gov. Corbett announced that he wants to direct revenue from the sale of wholesale and retail liquor operations to increased funding for public schools statewide. But major cuts to K-12 education made by Corbett during the past two years has placed many public school systems in a financial tailspin, like in Philadelphia which will close 23 schools and perhaps enact deep cuts in educational services to reduce a massive budget deficit.

State Senator Vincent Hughes, Democratic Chair of the Senate’s Appropriations Committee, supports increased government funding of public education but notes the Corbett’s liquor privatization funding is a one-time deal not sustained, states Hughes’ spokesman Ben Waxman.

“With privatization the state loses control of ensuring full collection of all sales and other taxes involving liquor store sales. This is not a problem with state stores,” Waxman said.

“I have not seen a credible study stating that privatization will lead to higher revenue and taxes for the state.”

Philadelphia contractor Benjamin Jones, a participant in the School District of Philadelphia’s initiative to utilize small, minority-owned businesses, said his company has received decreasing amounts of work from the district despite his paying thousands of dollars annually to maintain the bonds and insurances the district requires for companies seeking contracts.

“We don’t get peanuts. We don’t even get the smell from the peanut bag,” Jones said about the few Black firms still participating in the School District’s small business program.

The School District of Philadelphia spends millions of dollars every year on constructing or fixing schools, purchasing supplies and paying for professional services like hiring lawyers.

The School District awarded $83.4-million in contracts to companies and individuals from just the middle of last year to early 2013, according to district supplied data. This data noted that multi-million figure did not include additional spending related to “City, State or Federal contracts; Proprietary Licenses or Educational Partnerships.”

But many across Philadelphia believe the School District’s multi-million dollar spending is producing too little bang for those bucks — especially in this city with high levels of poverty and unemployment. Philadelphia holds the unenviable distinction of having the highest poverty rate among the nation’s ten largest cities.

Particularly egregious to many is the fact that those mega-tax dollars spent annually by the School District produce little benefit for local Black-owned businesses, city residents needing employment opportunities and School District students needing work experiences or that start in life after graduation.

“Black contractors are really catching hell at the School District,” Jones said. “Blacks get a fair share of nothing from those millions spent in tax dollars. The School District and the SRC [School Reform Commission] are not working to lower unemployment and poverty with those resources.”

The 23 schools that the SRC voted to close in early March are located predominately in low-income, non-white communities where unemployment rates easily exceed Philadelphia’s citywide average of 11.4 percent. Unemployment in some city sections ranges upwards to an alarming 37.2 percent, according to federal statistics compiled by Philadelphia Works Incorporated.

Since 2006 the School District spent $44.3-million on capital improvements on those 23 schools now approved for closure at the end of this school year in June, according to financial figures the district provided The Philadelphia Tribune.

Little of that $44.3-millon expended on capital improvements either helped reduce unemployment in city neighborhoods or increased economic opportunities for local Black businesses.

One of those schools to be closed by the SRC is the Leslie P. Hill Elementary School located in Philadelphia’s Strawberry Mansion section, where unemployment rates are high. Federal census data states unemployment in the several blocks surrounding the L.P. Hill School is 18.6 percent for males and 33.8 percent for females.

Tyrone Williams, community liaison for the Strawberry Mansion Community Development Corporation, said unemployment is a “major issue” in that community.

“When residents constantly watch contractor come in to this community with New Jersey tags on their trucks, coming into the place where residents live but can’t get a job, that makes them bitter,” Williams said.

Williams said residents in his community received no employment from the multi-million-dollar renovation the School District made a few years ago to Strawberry Mansion High School, which is attached to the Hill School.

“What does that say to residents?” Williams said.

In 2006 the School District and the SRC entered into a specialized agreement giving local building trade unions exclusive employment on District construction projects totaling hundreds of millions of dollars. While this agreement mandated the hiring of “local residents” and district graduates, the district failed to enforce or even monitor its mandate, knowledgeable sources stated.

On that March night when the SRC voted to close those 23 schools, that state controlled body approved a number of contracts for companies - despite justifying school closures on the desperate need to reduce district expenses.

Those contracts included $8.5-million to a firm headquartered outside Philadelphia providing janitorial/custodial services that received a $35.8-million contract in 2010, $1.8-million to retain an international law firm to represent the SRC and $250,000 for two non-Philadelphia firms providing mechanical services work.

One female owned company received a $100,000 contract for replacing window shades in schools. That firm is located in New Jersey, ten miles north of Newark.

“Our children are not accustomed to seeing Black men and women working in the schools. It’s a disgrace. We pay taxes too,” Philadelphia grassroots activist Sacaree Rhodes said. (Rhodes is the wife of contractor Benjamin Jones.)

Activists like Rhodes and Tyrone Williams in Strawberry Mansion said School District engagement with Black owned businesses and employment of Black workers provides important role modeling for students enabling students to envision future paths.

Black students account for 54.5 percent of the School District of Philadelphia’s population, with Hispanics comprising another 18.56 percent. Although white students comprise 14.3 percent of district students, white owned businesses get the lion’s share of district contracts.

Critics of the School District’s spending practices question why educators ignore connections between the lack of employment and the spawn of social ills like crime and poverty. One third of Philadelphia’s annual budget goes to crime related expenditures like police, prisons and courts while another big budget chunk is allocated to address other poverty-related issues.

“Education, economics and violence are all tied together. If a person has no job they can’t raise a family right and their children are running out of control,” Father’s Day Rally Committee President Bilal Qayyum said. The FDRC is an anti-violence/problem-solving organization founded in 1989 that is headquartered less than two miles from the L.P.Hill School in Strawberry Mansion.

The School District will spend millions of dollars, nearly $20-million by some estimates, closing those 23 schools and preparing other schools for the transferring students.

Contractor Benjamin Jones, who specializes in painting, said small businesses like his would participate in the post-closure transition like moving equipment, cleaning out buildings and renovating receiving schools. But a School District spokesman said last week that the district hopes to do most of the transition work “in house.”

The School District of Philadelphia anticipates generating income by selling the 23 school buildings it will close.

A Philadelphia City Controller report issued in February warned that the district “overstates” revenues anticipated from the sale of closed schools.

A cloud hovers over the district’s anticipated sale of the now shuttered old West Philadelphia High School building because the firm the district said it is negotiating with for that sale is not registered with the State of Pennsylvania’s Bureau of Corporations.

That Controller’s report listed another name for the firm negotiating to purchase the old West Philly High building, for a reported $6-million. But state Bureau of Corporations personnel stated “we have no records matching the business in question.”

“Any entity doing business in the Commonwealth must be registered with the state. How is the SRC negotiating with an entity that is invisible to the state?” stated a source knowledgeable of government contracting compliance.

“If this stuff happens on the front end, what happens when that firm starts doing work to convert that building to apartments or condos? It’s unlikely [that] Black owned firms will secure meaningful involvement on that project.”

Philadelphia School District spokesman Fernando Gallard said the district does “have a policy to utilize minority and female owned businesses.”

Data provided by Gallard, for example, stated that minority and female owned businesses received 28 percent of the $83.4 million in contracts allocated over the past eight months. Minority/female contracting ranged from a high of 41 percent in the design and construction category to a low of six percent in the purchasing supplies category.

However, Gallard was not able to provide specific data detailing how many of those contracts went to minority owned companies vs. female owned companies, how many local Black owned companies received contracts and how many of those minority/female contracts went to non-Philadelphia based firms.

Philadelphia businessman Bruce Crawley, an economic equity activist, said Philadelphia residents should have access to contracts and economic activities, but a persistent problem is that too many people who live in the city are excluded from economic inclusion.

“Elected officials, business leaders and the mainstream media are not speaking out on issues of exclusion at the School District,” Philadelphia African American Chamber of Commerce founder Crawley said.

Philadelphia Mayor Michael Nutter, who supported those recent school closures, has said little publicly about the need for the School District to increase contracting and employment opportunities for beleaguered Philadelphia residents, although Nutter recently castigated Philadelphia Magazine for a racially inflammatory cover story.

Activist Sacaree Rhodes said Nutter’s posture on School District spending practices shows his “disdain and disregard…His silence makes this issue worse” for taxpayers who send their children to public schools but can’t get “business and employment” through School District spending.

Nutter’s spokesman referred requests for comment about the mayor’s position on School District spending practices to Dr. Lori Shorr, Nutter’s chief education officer. Shorr’s office referred those requests to the City of Philadelphia’s Executive Director of the Office of Economic Opportunity, Angela Dowd-Burton.

Dowd-Burton said she was “not aware of any initiatives in collaboration with the School District” to specifically direct district spending to increase contracting opportunities for local Black-owned businesses and employment for local residents including School District graduates.

John Macklin, Philadelphia chapter president of the National Association of Minority Contractors, said the School District could do a lot more with increasing economic development in neighborhoods through its spending practices.

“The School District is using our tax money against us.”