Some Republicans skeptical of McDonnell's ABC privatization plan
As Gov. Bob McDonnell (R) travels the state to convince residents Virginia should privatize its state-owned liquor system, he faces a hurdle closer to home: several members of his own party are skeptical about the idea.
Del. Tom Gear (R-Hampton),this who chairs the Alcohol Beverage Control subcommittee of the House General Laws committee -- the group likely to be the first to consider the plan if the governor calls a special session this fall-- said Tuesday that he has "reservations."
Sen. Emmett Hanger (R-Augusta), who has for eight years chaired a committee that has examined proposals to privatize various state services, including liquor stores, said he's "predisposed not to support the concept."
And Del. Bob Marshall (R-Prince William) said he wants to make sure residents support abolishing a system that was first established by a statewide vote. He's considering introducing a bill to require a referendum on the idea, a step McDonnell has said he believes is unnecessary.
All three said they were keeping an open mind and were eager to hear the details of McDonnell's plan.
Indeed, McDonnell has said he will unveil a plan in coming weeks that replaces the annual revenue earned by the state's 332 Alcohol Beverage Control stores, produce a $300 million to $800 million upfront windfall for road improvements, and will not result in an increase in drinking.
But several Republicans said they have informed the administration that they start the process with deep concerns.
Gear, for instance, said he was concerned by suggestions that Costco and Wal-Mart would be able to sell liquor in a new system. He said he's worried the big companies could make it tough for small retail businesses to successfully compete in the market.
"My idea was to create jobs from small operations, mom-and-pop stores," he said. "Costco can put in liquor and never have to hire a single person."
Gear also said he was concerned about replacing the $248 million ABC now deposits in the general fund annual in liquor profits, excise and sales taxes.
"Right now," he said, "I have a lot of questions."
Hanger, meanwhile, said the Commonwealth Competition Council that he chairs looked at ABC privatization some years ago as it examined ways to make government more efficient. It concluded the system is well managed and selling it might help private industry but likely wouldn't be a moneymaker for the state, he said.
"Government is capable of doing a good job in some areas--and this is an area that I think we have a vital state interest in having control," Hanger said. "The money is already flowing into the general fund and being spent, every last penny. There is not a bonanza to have there."
Hanger, who's recently been studying efforts to improve the state's treatment of substance abuse, said he's also concerned that consumption of liquor would rise in a private system. "The experts I've talked to think privatization would be the absolutely wrong direction to go."
Marshall said he recently told McDonnell that he thinks Virginians should vote on whether the stores should be privatized because most other major ABC decisions over the last 75 years have been decided that way.
"The precedent has been established that we go to the voters on this,'' he said. "I'm inclined to honor the precedent."
Marshall said he also is concerned that privatization will lead to increased consumption and a decrease in money to the state's general fund, which pays for education, public safety and other core services.
"We have to make a decision not just about what's going for today, but 10 years from now,'' he said.
-Rosalind S. Helderman and Anita Kumar
August 10, 2010; 2:30 PM ET
Categories: General Assembly 2010 , House of Delegates , Liquor privatization , Robert F. McDonnell , State Senate
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