McDonnell says sale of liquor stores will provide 'windfall' for state
Gov. Bob McDonnell said Tuesday that he is pushing to privatize the state's 332 liquor stores because it can provide a "windfall" for Virginia's transportation needs.
"I want to ask for public support on that because ... licensing the stores will generate a lot of money that I can put right upfront into transportation maintenance,'' McDonnell said on his monthly call-in radio show on WTOP this morning.
McDonnell (R) is considering four ways to privatize the stores: selling all of the state's alcohol assets to a single company; having firms take over the state's existing stores; offering licenses to the businesses that sell beer and wine; and auctioning an undetermined number of licenses to the highest bidder.
The governor said today that the proposal could bring in $300 million to $500 million (though he and his staff have previously mentioned higher estimates) while continuing to bring in as much as $220 million a year which the state collects in taxes and profit.
"If we can create the windfall for transportation and have an equivalent amount of money coming into the general fund and still have all the same regulatory aspects from the state and make sure we don't have crime and other things related to alcohol, it should be a win-win for the citizens and that's why we're pushing it," he said.
McDonnell said the proceeds from the auction sale of ABC licenses will go entirely for road maintenance.
"One of the reasons we don't have enough money for construction is we're robbing the transportation trust fund, which is the construction money, and putting it into road maintenance,'' he said.
McDonnell's government reform commission is likely to approve one of the proposals at its next meeting Aug. 26, after which McDonnell expects to call legislators back to Richmond for a special session on privatization and other cost-cutting issues.
"I don't think selling alcohol is a core function of government -- neither do most people,'' he said. "I don't think it's a core function of government to do it and I think the private sector can run the stores more efficiently. There are free market incentives to do it."
McDonnell also said he will present the General Assembly with a set of other proposals for transportation during the next regular meeting in January that will include bonds and public-private partnerships.
July 27, 2010; 12:35 PM ET
Categories: Anita Kumar , Robert F. McDonnell
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