Virginia privatizing alcohol sales

[Ragorn]

http://www.washingtonpost.com/wp-dyn/co ... id=topnews

For the last 76 years, alcohol sales (anything other than beer and wine) have been run by the state government through state-owned ABC stores. The new governor is proposing a move to privatize the system, deregulating the sale of alcohol and putting control back in the private sector. This is a very interesting issue, because members of both parties support the measure, and members of both parties oppose it.

Republican support: De-regulation of industry, empowerment of the private sector, smaller government, less government overhead and expenditure. Libertarian conservatives are all about it.

Republican opposition: Alcohol regulation is vice/morality law, which many far-right conservative and religious groups support. De-regulating the industry makes alcohol more available, which some believe will lead to an increase in drunk driving. MADD, for example, is protesting this change.

Democratic support: Basically, the opposite of the Republican opposition. Vice law is outdated, and government-regulated alcohol sales should have gone away with the end of Prohibition. There's no reason the state government should infringe upon the citizens' right to sell a legal product.

Democratic opposition: The ABC division of the state government brings in $220 million a year, most of which is used to fund public libraries and schools, as well as transportation infrastructure. Governor McDonnell's plan to recover that revenue relies on speculation and questionable investments (such as offshore drilling). So we ask the eternal question we ask any time Republicans talk about reducing government revenue without a compensatory plan: How are you planning on paying for this, governor?

I'd love them to privatize liquor sales, but I need to see where that $220 million is coming from before I vote for it.

[teflor the ranger]

Just tax the living hell out of alcohol like every other state in the Union. Might as well. It's one of the OK things to tax.

[Ragorn]

They already do. Virginia's prices for liquor are shockingly high compared to neighboring states, to the tune of 20-33% higher than what you can find in Maryland and Delaware (before sales tax).

[teflor the ranger]

$220 million is a lot to give up from the state's revenue. In this case, I would say that it is wrong for the government to be taking money from the people by hijacking a legitimate, legal business from the public - however, I believe it would be prudent to legislate a staged transfer of the business of liquor sales from government to the citizens with an absolute deadline set at a fixed time in the future (for government to get out of the business of retail).

It would be best if you could predict a good revenue year for the state and then pick that year to get out of the business - when the hit to revenue would be the least damaging. So as a practical matter, staging a gradual withdrawl and giving the state time to give up the ghost will allow the big changes to occur less painfully, and perhaps during better years for the state to manage its budget.

I would legislate a law that mandates that the state gets out of the liquor selling business by 2020, with the stipulation that the state opens no new retail outlets and does not expand existing outlets. Possibly some sort of 2015 goal with reducing sales by fluid volume by 25%.