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ABC revenues grew by 4.4 percent in 2010

Rosalind Helderman

Profits and tax revenues at state-run liquor stores grew by 4.4 percent in fiscal year 2010 over fiscal year 2009, and total $258.6 million, according to a spokesman for the Virginia Department of Alcoholic Beverage Control.

Gov. Bob McDonnell (R) has promised his plan for privatizing state-run liquor stores, scheduled to be unveiled Wednesday, will fully replace the annual revenue Virginia now receives from the sale of hard liquor.

But just how much does Virginia get from its ABC stores? As discussions have unfolded on the topic over the summer, the most cited numbers have been from fiscal year 2009, which ended June 30, 2009 and have been the most current numbers available.

In 2009, Virginia received $109.6 million in excise taxes on liquor, $26.2 million in sales taxes and $111.8 million in profits from ABC stores, for a total of $247.6 million.

But fiscal year 2010 ended June 30 and sales numbers for the year are now available, according to an ABC spokesman. If legislators choose to look at the more recent numbers, McDonnell's plan will have to bring in even more revenue than has been widely discussed if it is to match ABC's profitability.

For fiscal 2010, ABC stores brought in $111.2 million in excise taxes, $26.9 million in sales taxes and $120.5 million in profits, for a total of $258.6 million.

That means ABC's profits, excise and sales taxes grew at a time when other forms of tax revenue have been declining due the economic downturn.

Watch for legislators to ask McDonnell to show that his plan will not just replace ABC's current revenues but post growth numbers in future years consistent with ABC's likely growth.

By Rosalind Helderman  |  September 7, 2010; 10:35 AM ET
Categories:  Liquor privatization , Robert F. McDonnell , Rosalind Helderman  
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Comments

it's impossible for virginia to continue to get that profit of $120 million once it no longer owns the ABC stores. The private stores will need to make a profit and so will virginias new liquor distribution company/companies.
Virginia would have to double the excise taxes or multiple the sales tax by 500%.

the one time revenue from selling the abc stores (while property values are currently low) won't last the rest of mcdonnells only term as governor.

And, there will be added costs of privitization. Underaged drinking will increase as liquor is made available in private stores where employees are no longer state employees and could even be underaged drinkers themselves.

Drunk driving will increase as liqour will now be sold later at night and parties that once ended when the liquor runs out will now send drunk party-goers to go get more.

this privatization deal is going to cost the taxpayers of virginia a boatload of money and misery and is going to make a handful of people millions of dollars.

Posted by: MarilynManson | September 7, 2010 3:39 PM | Report abuse

Privatization of state-run liquor stores would be a boost for state government, as well as a convenience for consumers.

Virginia would recapture much of the liquor sales currently lost to D.C. (Many N.Va. consumers now shop at D.C.'s private liquor shops, which offer more variety and better prices than Va.'s state-run stores.) That would mean MORE excise and sales tax revenue for Virginia.

Private retail stores and wholesalers in Va. would also pay annual licensing fees to the state. They would pay corporate taxes on their profits (unlike the current state system). And of course, the initial sale of licenses would bring in much-needed revenue for transportation and other projects.

And the tired argument on drunk driving has already been discredited. Numerous studies have shown NO difference in DUI rates between states with private stores and govt.-run stores.

It's unfortunate that those who would protect Virginia's state-run liquor monopoly are so quick to dismiss the benefits of a private, competitive marketplace.

Posted by: jrmil | September 7, 2010 5:34 PM | Report abuse

This man(?) is pushing to sell off ABC stores to private individuals, who in the small privately owned stores WILL sell to under aged buyers to make a buck. ABC is the ONLY department of Va. government to make a profit. His ideas DO NOT make sense to me... If he wants to do road improvements, set up toll roads to pay his way through his last 2 years, and make himself look good. Who are his buddies, the ones who want to own a liquor outlet?? His son, daughter or his golf buds??

Posted by: nwcmbrg57 | September 8, 2010 9:15 PM | Report abuse

And when he blows the "projected" windfall, where is he going to get the money we lost?? From YOU the individual taxpayer who is barely making ends meet as it is. Consumers are already cutting back on mixed drinks in bars and restaurants. Cheaper to go to ABC and buy a bottle and mix your own. An added tax on liquor by the drink will kill the bar/restaurant business(more unemployment and benefits paid out). WE CANNOT AFFORD THIS IDIOTIC PROPOSAL !!!! Our economy is wavering already and teetering towards the downside. Can YOU afford to pay more taxes to make up for the revenue lost if this fool gets his proposal passed?? I cannot, but maybe you are more financially able than I am ...

Posted by: nwcmbrg57 | September 8, 2010 9:31 PM | Report abuse

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