Network News

X My Profile
View More Activity
About this Blog   |   On Twitter   |   Follow us on Facebook   |   RSS Feeds RSS Feed

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

By Rosalind Helderman  |  August 10, 2010; 2:30 PM ET
Categories:  General Assembly 2010 , House of Delegates , Liquor privatization , Robert F. McDonnell , State Senate  
Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati   Google Buzz   Previous: Gear not following other politicians in returning U.S. Navy Vet donation
Next: Pentagon cuts spark war of words between Nye, Rigell in 2nd district race

Comments

OH isn't that Socialism ? but our GOP friend it doesn't matter about socialism as long as it bring money.

Posted by: tqmek1 | August 10, 2010 3:10 PM | Report abuse

$35 bottle of scotch.......$1.89 at Wal-Mart. It's going to be difficult to bring in $200 million a year at those prices.

Posted by: jckdoors | August 10, 2010 3:21 PM | Report abuse

Gear, for instance, said he was concerned by suggestions that Costco and Wal-Mart would be able to sell liquor in a new system... [which could make it difficult] for small retail businesses to successfully compete in the market.
============================================
Small retail businesses can't compete AT ALL now with ABC stores.

Another Republican genius.

Posted by: checkered1 | August 10, 2010 4:40 PM | Report abuse

Do NOT sell the liquor stores. Virginia needs the revenue. Don't kill the goose (a one time windfall) that lays the golden egg -- year after year after year in tax revenues for Virginia.

And this whole anti-socialism ideology has to disappear. Hybrid capitalism works well in some instances -- this is one of them. It's encouraging to see some Republicans not blindly following 100% pure capitalism ideology when it actually may HURT the state.

Posted by: tsqnova | August 11, 2010 7:49 AM | Report abuse

this whole ABC nonsense is just something to make it look like mcdonnell is doing something.

none of the plans he floated make sense.

they won't work and then he'll blame the democrats.

Posted by: MarilynManson | August 11, 2010 9:08 AM | Report abuse

>>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.
>>produce a $300 million to $800 million upfront windfall for road improvements, and will not result in an increase in drinking.
------

so we abolish a $250 million dollar source of revenue to for three years worth of said revenue up front. Hmmm, McDonnell is gone in three years. What a convenient circumstance!

Geting rid of a continuous source of revenue for a small windfall that will disappear by the time the Governor leaves office is bad accounting. But then again, cons are pretty bad at math.

I'm curious where the $250 million shortfall will be made up over the long run. Prayers by your conservative base to God for more money are simply not going to cut it.

Posted by: slydell | August 11, 2010 11:03 AM | Report abuse

Not one study is EVER cited showing that privatizing liquor stores leads to statistically significant higher rates of alcohol-related deaths. Quite the contrary, privatization leads to no significant increase in alcohol-related deaths [source: http://www.virginiainstitute.org/pdf/ABC-revised-version-final.pdf ] and provides sales tax revenue (for the nanny-staters) and jobs in the private sector.

CostCo already sells beer and wine, I guess that means there are no other stores in Virginia that sell beer and wine because CostCo put them out of business, right?

I like Bob Marshall but his "reservations" on this issue ring hollow.

In summation, competition works, government monopolies do not.

Posted by: millionea81 | August 11, 2010 2:14 PM | Report abuse

"I'm curious where the $250 million shortfall will be made up over the long run. Prayers by your conservative base to God for more money are simply not going to cut it."

If the people are broke, then you cut spending. How about we convert all public sector defined benefit pensions to defined contribution?

Posted by: millionea81 | August 11, 2010 2:32 PM | Report abuse

Reason:

Gear evidently sees liquor privatization as a stimulus program that should be judged by the number of jobs it creates. According to this view, big discounters like Costco and Wal-Mart cannot be allowed to compete with "mom-and-pop stores" because they are too efficient. By the same logic, Virginia should force liquor retailers to operate like a Chinese department store, assigning one employee to give the customer a card representing a bottle of bourbon, another to take the customer's money and stamp the card, a third to accept the stamped card, and a fourth to fetch the bottle. That would create four times as many jobs as a self-serve system where the customer takes his purchase to the cashier. Where have we heard this kind of reasoning before?

If Gear cared about consumers, he would welcome competition, which drives down prices, widens selection, and improves service. Instead he wants to replace a state monopoly with a state-enforced cartel. Which is the party of free markets again?

Posted by: permagrin | August 12, 2010 8:14 AM | Report abuse

Post a Comment

We encourage users to analyze, comment on and even challenge washingtonpost.com's articles, blogs, reviews and multimedia features.

User reviews and comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions.




characters remaining

 
 
RSS Feed
Subscribe to The Post

© 2010 The Washington Post Company