Hugh McQuaid file photo
Gov. Malloy tours Thomas Hooker Brewery in March (Hugh McQuaid file photo)

(Updated 4:42 p.m) Gov. Dannel P. Malloy, who sat on the sidelines last year as the legislature debated and defeated a bill to allow Sunday alcohol sales, will be endorsing the idea this year, according to sources.

Malloy is expected to announce on Saturday at Enfield Town Hall that he wants to allow package stores to sell alcohol on Sundays and will allow them to stay open until 10 p.m., instead of 9 p.m.

Under the package of proposals, restaurants and bars will be allowed to stay open until 2 a.m. every day of the week, if they choose. Currently, they are only able to stay open until 2 a.m. on the weekends. And Malloy will be lifting regulations on how alcohol is handled by distributors, wholesalers, and retailers.

Sunday sales has been debated by the General Assembly for years, but successful lobbying efforts by package store owners has thwarted its passage in the past.

House Minority Leader Lawrence Cafero, R-Norwalk, said the issue has never fallen along party lines, and his caucus is split on the issue.

“Very controversial issue, good points made on both sides,” Cafero, who tends to lean toward allowing Sunday sales, said Friday.

He said the governor’s support of the issue may be the “tipping point” that allows its passage this year.

The proposed changes are in line with Malloy’s desire to keep the state of Connecticut competitive with surrounding states.

Massachusetts establishments are allowed to stay open until 2 a.m. every day and package stores in the commonwealth are open on Sundays.

Some argue Connecticut lost business to Massachusetts when they eliminated the sales tax on alcohol in 2010. Then just last year Connecticut increased the excise tax. It was the first substantial tax increase on alcohol in 20 years and was expected to raise $9.9 million each year over the next two fiscal years. There’s no indication Malloy is looking to eliminate that tax. Instead, he’s seeking to make the industry more competitive by eliminating some of the pricing regulations. He will detail those proposals on Saturday in Enfield, which is home to Rep. Kathy Tallarita, one of the biggest proponents of Sunday sales.

Sources say the proposal will bring in millions of additional revenue to the state, but it’s unclear at the moment exactly how much additional revenue the state will see from the changes.

Last year, the Office of Fiscal Analysis estimated that if stores were allowed to be open on Sunday alcohol sales would increase 2.8 percent, and the state would see an increase of $2.4 million in sales tax and $1.2 million in excise taxes. In 2009 a Program Review and Investigations report on a similar bill estimated the measure would bring in between $7 million and $8 million.

No matter how much additional revenue the proposal brings in, it’s likely the public will embrace it.

According to a March 2011 Quinnipiac University poll residents support Sunday sales 66 to 31 percent. That’s the highest level of support ever for this question, up from 56 – 39 percent March 18, 2010.

Carroll Hughes, a lobbyist for the Connecticut Package Store Association, has been beating back Sunday sales proposals for decades.

Hughes said Friday that over the past year the association has been looking at whether there’s certain days it pays to be open. He said he’s not opposed to opening on some Sundays, but there are Sundays, which wouldn’t be winners for the package stores.

“All Sundays is not something we would embrace because it could increase costs to the stores,” Hughes said.  But “It’s a starting point. We certainly would work with him.”

As for later hours, Hughes said they discovered that when it went from 8 p.m. to 9 p.m. the customers who came to buy at 7:50 p.m. in the past, came to buy at 8:50 p.m. when the hours were changed. He said it didn’t make much of a difference in sales during the week, but later weekend hours may prove promising.

Hughes testified last year that Sunday sales will put an estimated 300 to 350 of the state’s 1,100 package stores out of business. He’s was also leery about how much it will help much with the state’s bottom line.

“There is no revenue here or the revenue is minuscule at best,” Hughes said last year during a public hearing on a Sunday sales bill.

Hughes told the committee he did his own research on the issue and found that $1.5 million in additional sales would have to occur in order to generate $141,333 in revenue for the state.

Hughes has also expressed concern that if Sunday sales are allowed 20 percent of beer sales will move from local package stores to the grocery stores.