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ABC privatization plan outlined Date published: 9/9/2010
RICHMOND --You could be buying Jack Daniels in the Giant grocery store by this time next year under the governor's plan to privatize liquor sales.Gov. Bob McDonnell's staff yesterday unveiled his privatization plan, long awaited by legislators trying to decide whether to support the high-profile proposal. McDonnell had campaigned on the issue of getting the state out of the liquor business--Virginia has controlled liquor sales since the 1930s--because he argues it's not a core service. As a result, the announcement of his plan was made to his own commission on government restructuring. The plan is expected to generate up to $500 million quickly for transportation while maintaining roughly the same amount of tax and other revenue from liquor sales. The governor plans to route the $500 million through a special transportation fund, instead of through normal transportation funding formulas. That fund, the "Virginia Transportation Infrastructure Bank," would use the money for grants and loans to fund road and transit projects. The bulk of the transportation money would come from selling 1,000 licenses to retailers to sell liquor, which is predicted to generate a minimum of $265 million; selling wholesale licenses ($160 million); and the sale of the ABC warehouse and stores ($33 million). The 1,000 licenses is triple the number of ABC stores the state currently owns. McDonnell's staff, however, argued that the change would likely lead to a smaller number of liquor stores, because they anticipate that most of the new licenses would go to existing grocery or other stores. That is reflected in the plan's three-tier system for licenses, in which 600 would go to large stores, such as big-box retailers like Walmart. The other two tiers are for smaller stores focusing on alcohol sales, and smaller retailers that already sell beer and wine, like CVS. Retailers would bid on the licenses, with a minimum bid formula yet to be worked out. Minimum bids would likely be in the $100,000 to $500,000 range, however, based on a proposed formula dependent upon sales volume. The plan also includes a proposal to sell an unlimited number of licenses to wholesalers and charge a 2.5 percent "optional" fee to restaurants for the ability to buy their liquor direct from wholesalers, rather than having to go to a liquor store.
Date published: 9/9/2010
and not be a retail seller of any kind of product except perhaps license plates.
How many new jobs will this create
in order to pay for the roads seems ridiculous to me. First of all, Virginia's roads today would need 18 billion. It would be a vicious cycle of playing catch-up, without ever really catching up. Secondly, why should bars and restaurants pay new taxes on liquor to fix the roads I drive on every day? And if they pass that cost to consumers, then their patrons would be shouldering some of that cost. That's no more fair than taxing cigarettes to fix the roads.
Privatise lose more lives
As it stands, $300M+ to the state next year. Where will that money come from if the business is sold off? Alcohol is a controlled substance, and I see no real problem with letting the government continue to control it. Improvments? Sure, better locations and hours might help, but it just ain't broken enough to need this 'fix'.
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