McDonnell promises his ABC privatization plan will keep nearly $250 million flowing to general fund
Gov. Bob McDonnell (R) said this week that his yet-to-be-released proposal for privatizing Virginia's 332 liquor stores will include nearly $250 million in recurring money each year to the state.
In an interview with The Washington Post, McDonnell said that any plan that he introduces in the coming weeks will include the same amount of money in profit and taxes that is currently being spent on education, public safety and other core services. Virginia's Alcoholic Beverage Control board deposited $248 million in liquor profits, as well as excise and sales taxes, into the general fund during fiscal 2009.
The governor's staff said McDonnell was considering proceeding with a proposal that included at least $150 million a year in recurring money, but Democrats who hold a majority in the state Senate balked at supporting privatization unless it generated more than that.
"We're first of all going to make sure we don't lose money out of the general fund,'' McDonnell said. "That's some of the concerns of the legislators. That's an argument that they've got. They're concerned about losing general fund money out of this plan and I'm saying the final plan that we propose will not have that in it. One more argument to take off the table. That's their main opposition right now."
In addition, McDonnell estimates that his proposal could bring in $300 million to $800 million in upfront money for transportation -- but most likely that number will end up being around $500 million.
"It depends on the market value that the licenses bring in,'' he said.
McDonnell's staff has unveiled four options for privatizing the state's liquor 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 3,000 businesses that sell beer and wine; and auctioning an undetermined number of licenses to the highest bidder.
The last option one -- auctioning the licenses -- is the one drawing the most attention, perhaps with an increase of the number of stores to about 800. Companies would be limited in the number of licenses they could buy, and some would be set aside for small, women-owned or minority-owned businesses.
McDonnell said he expects to reveal a specific proposal in the next few weeks.
"We haven't finalized every detail yet,'' he said. "We are talking to countless legislators, business people, looking at other states models to come out with what our internal staff thinks is the best approach for Virginia."
McDonnell's staff has spoken to 30 to 40 of the 140 legislators.
His government reform commission is likely to approve a proposal at its final meeting Sept. 13, after which McDonnell expects to call legislators back to Richmond for a special session on privatization and other cost-cutting issues.
McDonnell said he does not see the need for a referendum on the issue of privatization even though most other major ABC decisons over the last 75 years have been decided that way.
"That's not part of our proposal,'' he said. "If the General Assembly insisted on a referendum then it's something certainly I'd consider...I think we already have pretty good sentiment from the public that it's something they would support. I want to make sure that we have money dropping in the bottom line on all our government reform issues as fast as possible."
August 6, 2010; 8:45 AM ET
Categories: Anita Kumar , General Assembly 2010 , House of Delegates , Robert F. McDonnell , State Senate
Save & Share: Previous: McDonnell talks health care, immigration, liquor on FOX, MSNBC, FOX Business
Next: Yeardley Love case prompts U-Va. rule change
Posted by: B-rod | August 6, 2010 9:32 AM | Report abuse
Posted by: MarilynManson | August 6, 2010 9:37 AM | Report abuse
Posted by: sonny2 | August 6, 2010 9:55 AM | Report abuse
Posted by: MarilynManson | August 6, 2010 9:59 AM | Report abuse
Posted by: BTMPost | August 6, 2010 11:40 AM | Report abuse
Posted by: kinkysr | August 6, 2010 3:51 PM | Report abuse
Posted by: joeduffus | August 6, 2010 5:57 PM | Report abuse
Posted by: wewintheylose | August 6, 2010 8:22 PM | Report abuse
Posted by: CareyCampbell | August 6, 2010 10:58 PM | Report abuse
Posted by: Captiosus77 | August 10, 2010 3:39 AM | Report abuse