McDonnell in Norfolk to pitch liquor-sales privatization plan

NORFOLK

Privatizing Virginia's liquor stores will reap more money for the state, increase competition and cut prices, Gov. Bob McDonnell said Monday at a forum at Old Dominion University.

Plus, he said, it won't lead to more drunken driving or binge drinking. "If it was any different, I would not be promoting this at all," McDonnell said.

He didn't get much support - or opposition - from the crowd of roughly 300.

Of nearly 20 speakers, two commented on liquor stores - one in favor of McDonnell's stance, one against.

The meeting, at Webb University Center, was designed to draw ideas from residents on ways to streamline government operations. But for many, it was a chance to lobby the leader of the state on the causes closest to their hearts.

Speakers urged him to abandon his support for offshore drilling in the wake of the BP oil spill (McDonnell said he's still for it) and replace the members of the state parole board.

They also sought his intervention to block an abortion clinic in Virginia Beach and a mental health crisis center in Norfolk.

In a 25-minute overview, the Republican governor laid out the goals of his Commission on Government Reform and Restructuring, including reducing costs, performing tasks more efficiently and increasing transparency.

"I owe it to you as the state's CEO to find ways to spend that money better," he said.

McDonnell focused on his plan to disband the state's 76-year-old monopoly on liquor stores and, instead, sell licenses to private stores to market liquor.

He predicted the state would not lose money in the switch - a contention that some Democrats reject. Profits and taxes from alcohol sales generated more than $322 million for Virginia in fiscal year 2009, according to the Department of Alcoholic Beverage Control.

Best of all, McDonnell said, the one-time revenue from license sales would generate $300 million to $500 million for roads projects. "It's a creative way to get more money for transportation," he said.

Virginia now has 332 state-run liquor stores. That, McDonnell said, comes out to 0.6 per 10,000 people, much less than the 3.2 national average.

Even if the number of stores rose to 800, Virginia would remain significantly below the national average, he said. "No one wants to have liquor stores on every corner."

The session was the second of eight town-hall-style meetings that McDonnell has scheduled across the state this month to promote his plans for privatization and get feedback.

It might take the reform panel a few years to finish its work, McDonnell said Monday. But he has said he will issue a final proposal on liquor sales later this year and will then call a special session of the General Assembly to take it up.

Ellis James, an activist in Norfolk, spoke in opposition to McDonnell's ideas on liquor. "I don't think it's a bad thing to have a low number of ABC stores and outlets," James said. "If you have a lot more facilities and stockpiling of alcohol, you're going to have crime go up in the communities."

McDonnell responded: "You might think that would happen, but there is no evidence to suggest that." Studies, he said, have shown no difference in the frequency of binge drinking and drunken driving between states that run liquor stores and those that don't.

James also spoke against privatizing the Virginia Port Authority's terminals. Last year, three companies made offers to lease or operate them. McDonnell said state officials are evaluating the proposals, but he offered no enthusiasm.

"None of the money on the table is in the ballpark, even if we wanted to do it," he said.

Another speaker, Jim Arab of Virginia Beach, cheered McDonnell on. "I'm all for it," Arab said of McDonnell's plans for the liquor stores. "I'm a firm believer in privatization - limiting the size of government."

Arab suggested that McDonnell also privatize the Department of Motor Vehicles and get rid of car inspections unless new studies prove they increase safety on the roads.