Va. liquor store debate mired in conflicting facts
By: William C. Flook
Examiner Staff Writer
November 1, 2009
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| A proposal to privatize state-run liquor stores is the most talked-about aspect of Bob McDonnell’s transportation plan. (AP file photo) |
Both campaigns in the Virginia governor's race are citing questionable statistics in the debate over Republican gubernatorial nominee Bob McDonnell's plan to sell off Virginia's liquor monopoly.
The proposal is the most talked-about aspect of McDonnell's transportation plan. The Republican campaign says the state could raise an immediate $500 million by privatizing the state-run stores, funds that would be routed into Virginia's languishing road network.
Democratic rival Creigh Deeds has cited Ohio's experience in the spirits business to suggest the plan won't bring in anywhere close to the windfall claimed by the McDonnell campaign. Deeds said on WTOP radio that Ohio brought in only $40 million when it sold its liquor stores.
But Ohio is far from divesting itself from the spirits business, making a comparison with McDonnell's plan difficult. The state began converting the stores to private businesses that contract with the state in the early 1990s. Like Virginia, Ohio still puts its liquor profits into government operations and retains control of many aspects of the liquor trade.
"We control the inventory, product placement on the shelves, control the bids for the warehousing and transportation," said Matt Mullins, spokesman for the Ohio Division of Liquor Control.
Last fiscal year, liquor profits put $224 million into state coffers, Mullins said.
McDonnell has based his $500 million figure on a 2002 report commissioned by then-Gov. Mark Warner and headed by former Gov. Doug Wilder. But that savings was a total from several government streamlinings and consolidations, not just liquor store privatization, according to the report.
The Republican campaign has given little explanation of how it would make up for the loss of more than $100 million annual revenue from liquor sales.
McDonnell says property taxes that the businesses would pay once they were privatized would make up for the loss of revenue. But the state owns the property for only a small fraction of the 334 stores, which would yield scant new tax money.
