On the campaign trail, Gov. Bob McDonnell proposed a terrific idea to bring the Commonwealth of Virginia additional revenue: privatize state-run liquor stores. In 2002, the Wilder Commission estimated that selling off ABC stores would generate more than $500 million in revenue, not including another $115 million saved from eliminating overhead.
In complete contrast, when former Gov. Tim Kaine left office he proposed a budget that contained a multitude of tax and fee increases to raise revenue. But buried deep in this budget was another disturbing revenue raiser: a 2% markup in the price of distilled spirits. Currently, Virginia’s controlled state status makes it the monopoly seller of liquor, meaning no private retailers can even touch it. So, when the state wants more money, it can just artificially inflate the price – in this case a whopping $8 million markup.
The two paths outlined by Gov. McDonnell and former Gov. Kaine are utterly contradictory. Selling the state-run alcohol beverage stores not only brings in more revenue and gets the state out of the business of selling spirits, but it allows the free-market – not the state – to determine the price of alcoholic beverages. This is an idea that should be employed by other states that have monopoly control of liquor stores. Unfortunately, however, to date no effort has been made by policymakers to remove this ridiculous price control mechanism out of the current budget.
Last fall, the voters of Virginia rejected Kaine’s agenda of higher taxes, fees, and markups by electing a governor that campaigned on a platform of limited governance. ATR strongly supports Gov. McDonnell’s plan to privatize the Commonwealth’s ABC stores and urges lawmakers to remove the markup on spirits from the budget.
Also , click here for ATR’s letter warning of taxes masquerading as “fees” and “markups” in the Virginia budget.
(photo by Vidiot)