On September 8, 2010, a plan to privatize Virginia's ABC (state-owned liquor) stores was introduced to Governor McDonnell's Commission on Government Reform and Restructuring (the plan can be found here).

There has been much speculation that the current privatization plan is a tax increase, but in actuality this is not the case.  Given the tax revenue projections, the current proposal does not result in a net tax increase.  This would NOT be a violation of the Taxpayer Protection Pledge for those who have committed "to oppose and vote against any and all attempts to increase taxes."

To see ATR's letter to the legislature and analysis of the plan released on September 8th, click here.

Though the plan is not a net tax increase, there is room for improvement.  Namely, one problem that needs to be corrected is Virginia's onerously high excise tax on distilled spirits in the privatized system, a rate of $17.50 per gallon.  Just to give an idea of how high this rate is, according to Tax Foundation's 2010 Facts and Figures, Virginia would have the highest excise tax of any neighboring state in the region.  Rates of neighboring states and the District of Columbia include (per gallon): North Carolina at $13.39, West Virginia at $1.85, Tennessee at $4.40, Maryland at $1.50, and D.C. at $1.50.  ATR urges Governor McDonnell and the legislature to reduce the spirits rate to a reasonable level that is regionally competitive.

ATR encourages the privatization of ABC liquor stores in Virginia and across the country.  States should be looking to move out of business entities that the private sector would gladly operate.