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BOYD: Set Virginia booze free
Question of the Day
Being honored as the country's No. 1 business state should make all Virginians proud. To continue in that role, however, Virginia must set a national example, applying innovative, pro-business policies that, in return, generate revenues to the Commonwealth. Gov. Robert F. McDonnell campaigned on establishing accountability and supplying real answers for Virginia's ballooning transportation funding gap, a gap that will require an estimated $4.6 billion to fill over the next six years. One of his most bipartisan ideas is his proposal to privatize the ABC liquor stores.
Virginia didn't become the top state for business by perpetuating antiquated policies, but when it comes to the state's Alcohol Beverage Control (ABC) stores and licenses, that is exactly what Virginia has done. As one of only 18 states that still manage the sale of alcohol in some fashion, Virginia is missing out. Not only could this widely tested source of revenue be used to support economic growth and create private-sector jobs, but the current policy is preventing free and open commerce from thriving in a state otherwise supportive of such endeavors.
True, Virginia is a state with some outdated traditions that may never die - one-term governors is but one perfect example - but the state's legislature, together with Mr. McDonnell, now has a chance to generate an estimated $500 million in revenue, all of which would go directly to transportation infrastructure spending. Importantly, this income stream would not be a one-time occurrence, but it will be self-perpetuating through the sale of licenses and the tax revenue generated from the discretionary purchase of beer, wine and spirits, estimated to produce $179 million for state coffers annually.
Counties and local municipalities would also see a spike in income and property taxes as private enterprise replaces the ABC stores. In addition to this direct and sustained capital infusion, Virginia would also save an estimated $115 million a year in overhead obligations - salaries, leases and employee benefits - all of which the state now has to pay before one cent of profit can be registered. ABC would still exist, but its role will shift from that of retailer to regulation and enforcement, a more appropriate role for the government, and a role that will enhance public safety while unlocking new revenue potential for the Commonwealth.
Virginia's legislature has held numerous special legislative sessions on transportation over the past few years, none of which has resulted in any real progress, a point on which Republicans and Democrats alike agree. We can blame this on partisanship, special interests, lack of agreement or lack of quality ideas. But whatever the cause, nothing has happened - and that must change.
Privatizing ABC stores is a bipartisan, innovative, real-world answer to at least a significant down-payment on the nearly $4 billion in anticipated future infrastructure costs over the next six years. In fact, both parties have endorsed this idea. During former Democratic Gov. Mark Warner's term in office, he created the Commission on Efficiency and Effectiveness, appointing another former Democratic governor, L. Douglas Wilder, as its chairman. The commission came to the conclusion that the "Privatization [of ABC stores] should be structured as to provide at least as equal a revenue stream to the localities and to the state activities that are presently supported by ABC earned income." Mr. McDonnell, along with Republican State Sen. Mark D. Obenshain, a long-time advocate of the measure, have taken leadership roles in working toward this agreed conclusion and solving our transportation funding shortfalls.
Transportation needs do not just fall in Northern Virginia, but in the mountains of the Western Piedmont, to deteriorating bridges in the Tidewater region (anyone who has driven over the Potomac River on Route 301 has had a very scary first-hand experience). Indeed, the privatization of ABC stores will generate revenue that can go a long way to easing many issues Virginians have with their roads.
Numbers are important, and indeed critical in the current financial challenges Virginia now faces, but Virginia is not California. Many of us look to our neighbors to the north, Washington and Maryland, for a view of what a privatized liquor industry would look like - flashy neon lights and drive-through windows. This is not how it has to be. Our cities are too diverse, our neighborhood corners too precious, and both Mr. McDonnell and Mr. Obenshain agree. The senator's previous bill, proposed in 2009, would have permitted licenses at a rate of one per 10,000 inhabitants, and no more than one store per square mile. Currently, there is roughly one ABC store for every 25,000 Virginians. This increase in access will not bring immorality to the streets of our cities and towns and neon lights to our corners. It will instead bring jobs to our communities and private enterprise to our state - while generating revenue rather than spending it.
Tyler R. Boyd has worked in international finance and communications as well as for former Vice President Richard Cheney.
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