Gov. Bob McDonnell campaigned on a promise to sell Virginia’s 334 state-owned Alcoholic Beverage Control stores and use the money for urgently needed transportation projects. There’s no time like the present. Transportation funding isn’t even keeping up with highway maintenance, and thanks to BP, the prospect of collecting royalties from offshore drilling is greatly diminished. Selling the ABC stores is an attractive option to raise money for new roads.
A study for the Virginia Institute of Public Policy, co-authored by George Mason University economics professor Donald Boudreaux and consultant Julia Williams, concluded that doing so will not, as some critics contend, increase the incidence of public drunkenness. They compared Virginia, one of 18 “control” states, with 32 “license” states that allow private retailers to sell distilled spirits. If government sale of alcohol were really a factor in reducing alcohol-related deaths, this “natural experiment” would demonstrate as much.
However, “the data show that control states suffer just as many alcohol-related problems as do license states,” the researchers concluded, with no statistically meaningful differences in binge drinking or drunken-driving fatalities. And because beer and wine are readily available in Virginia outside ABC stores, merely switching from a control state to a license state “will not affect the amount of alcohol consumed. …”
Only Utah and Pennsylvania still retain state ownership of beer and wine outlets, and Pennsylvania is currently piloting wine vending machines in grocery stores. And a 2003 study by the Pacific Institute for Research and Evaluation found that 80 percent of those charged with driving under the influence reported consuming beer.
There are two reasons why state ownership of liquor stores is a bad idea. First is the conflict of interest when the state regulates its own source of revenue. The government has a compelling interest in regulating intoxicants, but peddling them at the same time undermines that function, which should be designed to discourage overconsumption, not move cases of vodka, Scotch and rum. This distinction is significant given that the study also determined that a one-gallon per capita increase in drinking increases a state’s alcohol-related death rate by 3 percent.
The second reason is philosophical. State government has many legitimate functions, but operating liquor stores is not one of them. The public’s tolerance for ever-expanding government has ended, and a period of retrenchment is long overdue. Selling the ABC stores is a good first step.
