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Good morning. Pennsylvania's elected officials have less than two weeks to decide how to apply $7.3 billion in federal stimulus money -- plus an estimated $3 billion in extra revenue -- to a state budget for the fiscal year that starts July 1. It's a good problem to have. But the financial windfall won't paper over every difference between legislators and Gov. Tom Wolf as they seek to balance the state's immediate needs with its longer-term challenges. 
 
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Outdoor dining on North Second Street in Harrisburg last summer.


Fight over canned drinks endangers restaurant bill



Restaurants and bars are hoping state lawmakers will act this week to restore some of the rule changes that helped the industry cope with the economic fallout of Covid-19.
  • However, their hopes are now wrapped up in a controversial bid to expand sales of canned cocktails, a roughly $5.5 billion market globally that could reach $13.4 billion by 2028.
  • State senators added the canned-cocktail expansion to legislation that would ease the way for restaurants and bars to set up outdoor seating and sell mixed drinks to go.
  • The new provisions have drawn a veto threat from Gov. Tom Wolf. They would allow sales of canned cocktails like margaritas and whiskey sours at beer distributors, grocery stores and convenience stores, among others, building on five-year-old changes to state liquor laws.
 
Why is this happening: Last year, the Pennsylvania Liquor Control Board and state lawmakers made it easier for bars and restaurants to set up outdoor seating and sell cocktails go, among other changes. But in guidance issued last week, the board said it was ending the pandemic-era regulatory moves, citing the end of Wolf's pandemic emergency declaration as the trigger.
  • "One of the biggest changes will be the end of bars and restaurants selling to-go mixed drinks," Barley Snyder attorney Larry Heim wrote in a note. "This practice was prohibited pre-pandemic by the state’s alcohol regulations, but state legislators offered it as a life preserver to restaurants that could no longer have customers eat or drink in their establishments."
  • If they want to continue expanded outdoor seating, restaurants and bars will have to apply for permanent approval.

Are restaurants back to normal: Yes. Capacity limits ended in late May, allowing bars and restaurants to return to full occupancy.
  • Nonetheless, the industry would like to preserve the practices that helped it generate revenue at a time when pandemic restrictions cut into most other sources.

What's next: The amended bill approved by the Senate -- House Bill 1154 -- still has to go through the House.
  • Wolf has said he would sign a limited bill covering outdoor seating and cocktails to go for bars and restaurants.
  • But he has warned he would reject a bill ushering in broader changes to laws governing alcohol sales.
  • Chuck Moran, executive director of the Pennsylvania Licensed Beverage and Tavern Association in Harrisburg, would like to see the two issues separated. But, he said, "We know that there's going to be a lot of lobbying around this."
  • The canned-cocktail changes are supported by the Distilled Spirits Council of the United States, a trade group for the distilled spirits industry, which advocated for them in legislative testimony earlier this year.

The bottom line: Similar debates could envelop other industries that enjoyed regulatory flexibility during the pandemic. However, they have some time to sort through what they would like to keep.
  • The pandemic-era flexibility is in place until Sept. 30 under a bill signed by Wolf earlier this month.
  • The bill applies to flexibility granted by the governor, however, not the liquor control board, according to a spokesperson for the PLCB.


Quick takes



WHO'S HIRING: Gooding Group. The Ephrata-based company has hired Stephen McNamara as it next CFO. He replaces Rick Watson, who is retiring after 15 years at the company.
  • McNamara will manage the finance department of the two companies that comprise the Gooding Group: GSM Roofing, which specializes in commercial installation and maintenance, and GSM Industrial, a contract manufacturer. They employ about 220 people overall.
  • McNamara worked most recently as controller and principal accounting officer for Armstrong World Industries, the ceiling manufacturer based in Manor Township, Lancaster County.
 


WHO'S ON BOARD: Jessica Meyers, CEO of JEM Group, a commercial construction company in Camp Hill. Meyers has been named to the board of Centric Financial, based in Lower Paxton Township, Dauphin County. Meyers is filling a vacant seat on the bank's 10-member board, according to a spokesperson.
  • Meyers, who founded JEM Group in 2003, is on the board of The Salvation Army Harrisburg Capital City Region, the YWCA of Greater Harrisburg and AAA Central PA. She also is co-chair of Top Taste, an annual fundraiser for the Central Pennsylvania Food Bank.
  • Centric Financial, the parent of Centric Bank, has assets of $1.1 billion and has been expanding recently into the Philadelphia suburbs.
 


WHAT'S INCHING DOWN: Pennsylvania's unemployment rate. It dropped to 6.9% in May, down from 7.1% in April but still higher than the pre-pandemic rate despite a thicket of help-wanted billboards across the state. Pennsylvania added about 10,000 jobs last month but the gain masked disparities between industries, as well as a reduction in the overall workforce of about 6,000 people.
  • Jobs in education, health care, hospitality and service industries all grew by double digits. Service industries led the pack with a 23.4% gain, followed by education and health services at 12.2%, according to the Pennsylvania Department of Labor & Industry. 
  • Construction and manufacturing saw slight declines, of 3.3% and 1.6%, respectively. 

The bottom line: Business leaders have been complaining that extra jobless pay from the federal government is acting as a disincentive to work and making it harder to fill open positions, a critique echoed last week by the Pennsylvania Chamber of Business and Industry.

 
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Compiled and written by Joel Berg

 
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