This week the Governor’s Commission on Restructuring and Reform voted to endorse the concept of ABC privatization.
Why did I vote no?
For many reasons.
Currently ABC operations bring in over $200 million each year to the General Fund, the source of funding for education, health care, and public safety among other responsibilities of the state. When discussion of ABC privatization began, many legislators made clear that the revenue must be replaced in order for them to even consider the proposition. The Governor promised that would be the case.
Now that the proposal is public, it turns out that it is $47 million dollars short of replacing existing revenue. Furthermore an additional $30 million is speculative, based on increasing sales that may or may not occur. Therefore, there is a potential hole in the budget of $75 million that is very much needed at this perilous time in our economy and resulting losses in state revenue.
The proposal calls for expanding the number of liquor outlets from 332 to 1000. In Fairfax County, the number of liquor outlets will increase from 34 to 132. While many of these will be existing stores, this is still an incredible increase in the availability of hard liquor. The hours of availability will also be greatly expanded, so that liquor purchases can be made up to midnight.
The ABC stores have an outstanding record of 98% compliance with laws forbidding sales of liquor to minors and any ABC employee caught selling to a minor is fired on the spot. At grocery, drug, and convenience stores that now sell beer and wine, the compliance record is 90% — quite a difference. Although the Governor plans to hire 22 more ABC agents, that increase will not even bring us up to the staffing level of a few years ago. I have heard from police departments that ABC agents are stretched very thin after the staffing reductions in recent years as they try to cover the 6000-plus beer and wine sellers. I am simply not convinced that they will be able to cope with these increased responsibilities.
Perhaps the most egregious part of the proposal is that the whole purpose is to get some one-time, upfront revenue for transportation. The estimate is that it would provide (“at a minimum”, the Governor’s staff says) $450 million, minus the Work Force Transition Act payments to former ABC employees of up to $36 million. To put this in perspective, just remember that the I-66/Gainesville interchange alone cost well over $400 million.
Whatever any merits of this proposal, it is NOT a transportation plan. Virginia needs dedicated, long-term, sustainable sources of revenue for transportation, not a stop-gap measure for one Governor’s term.
Finally, no corporation would sell one of its lines of business without a thorough study from an independent evaluator. Virginia should do no less.
Senator Whipple represents the 31st District in the Virginia State Senate. She may be e-mailed at firstname.lastname@example.org