How Pa. legislators blew liquor privatization

Nearby, in the rotunda that is usually darkened and empty by this hour, there is a buzz of activity. Lobbyists chat amongst themselves or speak in hushed tones to unknown interests on the other end of cell phone signals. Reporters, meanwhile, mill around waiting for the Senate to reconvene.

It's the end of the week and nearly the end of the fiscal year. But it's the start of a furious three-day rush in which lawmakers hoped to pass a state budget, develop a plan to overhaul the odd and arcane laws regarding where and how alcohol can be purchased and a $2 billion transportation infrastructure spending proposal.

The state Senate would have the first move, if only they could find the votes. That's why they spent most of the afternoon and evening locked away in an enclave beneath the Senate chambers, hammering out an agreement that would move the liquor bill forward.

If they could do that, the state House could be convinced to advance the transportation plan that, if they were being honest, the senators were far more interested in having passed. With Democrats unanimously opposed to the liquor proposal, GOP leaders knew they needed to have 26 "yes" votes from their 27 members.

The connection between liquor privatization and transportation funding had been whispered about for months, but rarely acknowledged publicly — and never in a straightforward manner.

Interestingly enough, it was Senate President Joe Scarnati, R-Jefferson, who denounced the connection in January, telling reporters he did not want to see highway funding "held hostage" by Gov. Corbett in order to get a liquor privatization bill finished.

But behind those heavy mahogany doors, Senate Republicans were well aware of how the two bills' fates were linked. A high-stakes game of legislative chicken was about to commence.

"I don't know if its tied or not tied to passing liquor to the House, but I don't know and I'm not going to take that chance," said Sen. Don White, R-Indiana, who stepped out of the caucus room long enough to tell a gaggle of reporters he disliked the liquor bill, but was planning to vote for it anyway, just to compel the House to move transportation forward.

By the time Senate Republican leaders talked all 27 of their members into supporting the liquor bill, it was clear White was not the only one that saw liquor as the second half of a measure-for-measure deal with the House on transportation funding. And there were still other holdouts to be dealt with.

State Sen. Tommy Tomlinson, R-Bucks, said he was "a no vote" at 11:05 p.m. Friday, citing concerns about putting beer distributors out of business. Two hours later, with language in the amendment to prohibit gas stations from selling beer if they were near distributors, Tomlinson was on board.

The arm-twisting continued long into the night.

"There's some very long term members here — 20-year-plus members — who say they've never seen the intensity inside of our caucus that they've seen," said state Sen. Mike Brubaker, R-Lancaster, on Friday.

They needed 26. But when the time came, no one deviated from the pack. The state Senate approved the rewrite of the liquor bill with a party-line 27-23 vote around 1:20 a.m. Saturday, setting up the package for a final vote before Sunday's budget deadline.

'Turzai's got a problem'

That vote, as it would turn out, changed the entire dynamic that would play out in the state Capitol for the rest of the weekend. Senate Republicans had put their chips on the table and made what was, for some, a difficult vote. But before they were going to go any farther with the liquor bill, they waited to see the House GOP do the same with the Senate's coveted transportation funding package.

Neither bill was what the other side really wanted. The House reduced the final spending figure for the transportation bill and the Senate had tinkered with several elements of the liquor reform proposal.

As Friday turned into Saturday, it was increasingly clear neither would be finished without the other.

It was an arrangement that hinged on House Majority Leader Mike Turzai, R-Allegheny.

But Turzai had troubles of his own, and by Saturday afternoon they became quite obvious.

The two-term Republican majority leader had been the primary cheerleader for liquor privatization since 2011, when the GOP took control of the state House. But he was ruling over a fractured caucus that included a hard-line conservative wing dead-set against voting for tax increases to fund transportation. Led by state Rep. Daryl Metcalfe, R-Butler, the most outspoken conservative in the legislature, about 30 Republicans took a principled — some would say stubborn — stand against the transportation bill.

Exiting a leadership meeting Saturday afternoon, state Rep. Robert Godshall, R-Montgomery, gave a frank description of the situation.

"Turzai's got a problem because we have so many right-wingers, I mean real right-wingers, in our caucus who are opposed to everything," he said.

Godshall, a self-described "moderate Republican", said he was committed to supporting both transportation and liquor, but many in the caucus did not see things the same way.

"Mike is doing the best he can with what we have, but I've never seen anything like the divisions we have right now," said Godshall, a 30-year member of the Legislature.

'We've been ignored for three years'

From the beginning, both sides viewed transportation as a bipartisan issue. The Corbett administration had worked on a draft transportation package for months, then a more robust $2.5-billion proposal passed the state Senate 45-5 in early June. Secretary of Transportation Barry Schoch made personal visits for the past several months to Democrats and Republicans to sell them on the transportation package.

But now, without a unified Republican caucus, Turzai had to appeal to Democrats for support on the transportation bill.

When it came time to count the votes, the House Democrats pushed back. They said the final bill came up short on spending, leaving out necessary funds and mass-transit support.

State Rep. Mike Hanna, D-Centre, said without Democrats having their hands in crafting the actual plan, the Republicans had the responsibility to put up the majority of votes. As Republican support fractured, Democrat votes become more crucial.

First Democrats were asked to put up 30 to 40 votes. Then 50. Then 60.

Hanna said it just couldn't happen, not when the caucus says the administration hasn't heard them out on their priorities.

"We've been ignored for three years," Hanna said. "Now they're coming to us and saying 'Here's a transportation bill and you have to pass it.'"

On Saturday afternoon, Hanna and Rep. Dan Frankel, D-Allegheny, met with Turzai to bring up their transportation amendment, Hanna said. The plan was "essentially rejected." But it included a severance tax on shale drilling companies to help fund mass transit, a nonstarter in a Republican caucus that's staunchly opposes raising taxes, let alone creating new ones.

With the transportation deal crumbling like fractured concrete on Saturday night, the finger-pointing started. 

State Rep. Mike Vereb, R-Montgomery, hammered Democratic leaders for backing away from the table at the last minute and stranding the transportation plan more than 30 votes shy of passage.

"They're not paid to think," Vereb said.

Democrats, already unhappy with the way they had been treated, were less than receptive to being publicly insulted.

Neither Senate Democrats nor the labor unions, two groups that favored the transportation bill, made much of an effort to rally support from House Democrats. Another union actively began working against the transportation bill in the House, hoping to kill the liquor bill through the backdoor. After Friday's high-water mark for liquor privatization in the state Senate, Saturday night ended with hopes dimming on all sides.

'It feels a little bit like bizarro world'

On Sunday morning, with Democrats still unified in opposition to the transportation plan, state Rep. Brian Sims, D-Philadelphia, found a little bit of humor in the situation.

"It feels a little bit like bizarro world right now," he said, with Democrats refusing to vote for more spending and the Republicans trying to convince them to do it.

The hours ticked away on Sunday as Senate leaders became more open about their intentions to sit on the liquor bill until they received a transportation bill from the state House. With the House still completely stalled, a late effort by Corbett to get the state Senate to unilaterally act on the liquor bill was rebutted by leaders who lacked the votes to do so, even if they wanted to.

"I want the transportation," said state Sen. Stewart Greenleaf, R-Montgomery, around 6:30 p.m. Sunday, as the last hopes for either bill were fading. "It creates tens of thousands of jobs. What can replace that?"

It all culminated in a comical exchange of press releases – never the best of negotiating strategies – with Corbett telling the Senate GOP to pass liquor and Scarnati telling the House to get their act together and pass the transportation bill.

By then, the two comatose proposals were circling the drain. Turzai declared them dead around 10 p.m. Sunday, as the state House finished the budget bill and adjourned for the night.

'But it didn't happen'

Amidst the failure to close on transportation and liquor, the $28.375-billion general appropriations bill had gone through with little fanfare, seeing aboutfive hours of debate between both chambers.

Then it was time for Corbett to sign the budget bill, which he did at his first public appearance in Harrisburg in more than a week.

Corbett, 0-3 on his ambitious agenda since a pension-reform push died early on, tipped his hat to lawmakers for delivering his third on-time budget. He said they had some unfinished business to take up in the fall, but praised progress on the issues.

About two dozen House members — no Senators — stood and applauded as Corbett put pen to paper to make the spending plan law. They looked on as he took questions from reporters, declining to say he was disappointed.

Corbett promised to keep working on his agenda through the 18 months of the session.

"I think everybody here would like to have had them done," Corbett said. "But it didn't happen."

Contact Boehm at Eric@PAIndependent.com and Daniels at Melissa@PAIndependent.com. Follow @PAIndependent on Twitter for more.