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Where does the money from Virginia's liquor sales really go?

Anita Kumar

Opponents -- and supporters -- of privatizing the state's liquor stores frequently mention that $65 million of the nearly $250 million in taxes and profit collected each year from alcohol sales is spent on alcohol treatment and prevention.

Del. Bob Brink, an Arlington Democrat who serves on Gov. Bob McDonnell's government reform commission, which is studying privatization, has repeatedly cited the statistic. He wrote about it recently in an op-ed in The Washington Post.

Even McDonnell, who is leaning toward auctioning off an undetermined number of licenses to the highest bidder, mentioned the money is used for substance abuse on a recent radio show.

But Michael Maul, associate director of the state's Department of Planning and Budget, says that the perception, while common, isn't true.

The $250 million from liquor sales is sent to the state's general fund, which is then spent on education, public safety and other core services. There's nothing in the budget that says that any of that money must be spent on anything specific, despite some confusing language that does not apply to the general fund.

Eric Finkbeiner, the governor's senior adviser for policy, and his team have been notifying legislators and members of the reform commission what the liquor profit and taxes are spent on, but misinformation still persists,

So how much does the state spend on substance abuse?

Maul said there is no easy way quantify the amount.

He said the most recent data available is from a study by the General Assembly's investigative arm from fiscal year 2006. Relying on surveys and agency interviews, the Joint Legislative Audit & Review Committee shows that the state spent $55 million. It's nearly double when you factor in local government's share.

By Anita Kumar  |  August 24, 2010; 1:30 PM ET
Categories:  Anita Kumar , General Assembly 2010 , House of Delegates , Liquor privatization , Robert F. McDonnell , State Senate  
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