Virginia is slated to open 20 new state-run liquor stores and mark up spirit prices by 2 percent under the state’s new budget, signaling lawmakers’ increased reliance on alcohol revenues and a potentially deeper resistance to Gov. Bob McDonnell’s privatization plan.
McDonnell, a Republican, campaigned on the idea of selling off the state’s more than 330 ABC stores to private operators and using the upfront proceeds to pay for transportation needs. But facing a more than $4 billion shortfall, the legislature approved a two-year spending plan that moves in the opposite direction.
The new governor at a press conference dismissed the expansion of ABC stores as irrelevant to his mission of getting Virginia out of the liquor business. But as he reviews provisions in the budget, McDonnell said he will “take a close look at that item to see if we really want to start that right now, given where we’re going with privatization.”
“I don’t look at this handful of stores that’s been added in the budget as a statement by the legislature that they aren’t in favor of ABC privatization,” he said. “A lot of people who voted for the budget overall I know will support me on privatization.”
McDonnell didn’t push to scrap the system during the two-month-long session that just adjourned, but said he may introduce the plan during a special session. Opponents argue that liquor privatization would leave a more than $100 million annual hole in the general fund while generating only a smallfraction of the $500 million one-time infusion estimated by the governor.
The budget anticipates $5.2 million in profits by placing stores “in locations deemed to have the greatest potential for total increased sale in order to maximize profitability.”
One lawmaker cited the new stores as reason enough to vote against the overall budget, which passed 34-6 in the Senate and 73-23 in the House. In a floor speech, Sen. John Watkins, R-Midlothian, warned the state will be encouraging greater consumption to “ensure profitability,” resulting in greater rates of alcoholism and drunken driving.
“What we’re doing here is expanding a monopoly that we have no business being in,” Watkins said.
