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When gubernatorial candidate Bob McDonnell set out on his quest for a Holy Grail overflowing with free-market liquor back in July 2009, he promised to "ensure the highest cash to Virginia in the short term and no loss of revenue in the long run, and in fact, the overall generation of higher revenue in future years."
But when Gov. McDonnell took his first stab at a plan to end the state monopoly on Sept. 8, he came up more than $20 million short of the $324 million in liquor revenues the state will collect this year.
McDonnell shrugged off the injury to the state budget with the sanguine defiance of Monty Python's Black Knight.
"That's really not that big a deal... $22 million is nothing," the governor told reporters.
"'Tis but a scratch," quoth the Black Knight. "I've had worse."
Undaunted, the governor was back last week with a new plan that bled even more red ink, hacking a $47 million gash in the budget.
"It's not a lot," McDonnell declared, calling revenues "substantially equivalent" to the status quo.
"It's just a flesh wound!"
Unfortunately, Virginia's financial crisis isn't quite as funny as a Monty Python movie. McDonnell may feel his plan is invincible, but the state budget is not. It's hemorrhaged nearly $3.2 billion since 2008, including more than $500 million in state aid for schools this year alone.
Not only has McDonnell broken his promise to come up with a revenue-neutral plan for privatizing state package stores, but his plan grows worse over time. Currently, state liquor taxes are assessed at 20 percent of the price. McDonnell wants to switch to a levy of $17.50 per gallon. Unless Virginians go on an ever-escalating drinking binge, revenues will plateau. Much like the gas tax, the new liquor tax will quickly be outpaced by the needs of Virginia schools, mental health programs and prisons.
McDonnell's handpicked commission on government reform endorsed his plan last week, despite the violence it does to the already mutilated budget.
The only opposition came from state lawmakers, but that's a good sign. The governor admitted he doesn't yet have the votes in the General Assembly to win passage and may delay consideration of his plan until next year.
Whether he forges ahead this fall or waits until winter, let's hope he's met at the doors of the state Capitol by a band of Knights who say No.
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We may need the ABC for additional purposes. #1
Very short report on page 15 of October 11 Newsweek: "The Cato Institute reports that if we treat pot like alcohol- regulate it, tax it, and stop prosecuting people for it- America would save $8.7 billion a year."
No need to be hasty in dumping the ABC yet.
Given McDonnell's other performances on money issues I think this matter would be settled if he wanted it settled.
Right now, the ABC is providing extra service as a modestly useful political foot ball. Besides even bare attention is always good for ABC management purposes.
When we account the costs and benefits of our recreational drug PROHIBITION, we may find it as repugnant as ALCOHOL PROHIBITION.
We may need the ABC for maximizing the excise tax on additional products that we would like it to sell.
Well, we...
have here an issue where the local paper's editors can show just how juvenile they can be. Sorry folks, but there's nothing witty in what's presented above. The money SHOULD be irrelevant, because the govt, at ANY level, has no business being in business! Period! Monopolizing the sale of booze is just wrong, how difficult is that to understand? By all means, regulate it and tax it, but DO NOT control it! This is VA's version of AMTRAK (although in all fairness, the booze industry is not a money loser here), but the principle is the same, it's an endeavor a govt has no business being part of other than the legitimate govt functions that apply!
Darn that "Party of NO!"
OOOOPS!
Say NO! to any idea other than a higher gas tax.
not really a tax
The new Bob McD terminology is 'revenue'.
3
Not only has McDonnell broken his promise to come up with a revenue-neutral plan for privatizing state package stores, but his plan grows worse over time. Currently, state liquor taxes are assessed at 20 percent of the price. McDonnell wants to switch to a levy of $17.50 per gallon. Unless Virginians go on an ever-escalating drinking binge, revenues will plateau. Much like the gas tax, the new liquor tax will quickly be outpaced by the needs of Virginia schools, mental health programs and prisons.
………
The only problem I am seeing with this so far is the fact he made a promise.
3.1
One thing I don’t see is where you made the case that the plan gets worse over time. First, VA’s population is on track to grow, meaning the users of alcohol will grow in numbers (add to the fact people who become 21). So there is going to be an ever escalating drinking source. Now at a 20 percent tax on the price of a beverage, we can see the price of a JD 750ML at 23.50, meaning the State gets 4 dollars and 70 cents per bottle. There are 3,784.4 ML in a gallon, so a Gallon of JD is 5.045 times a 750ML bottle. 23.50 X 5.045 is 118.56 dollars for a gallon of JD. At 20 percent of 118.56 the potential revenue for the state is 23 dollars and 71 cents as opposed to the 17.50 the Gov is proposing. I make this point, though… I want the extra $6.21. I believe I am more entitled to the 6.21 than the State of Virginia is. What say you?
2
McDonnell's handpicked commission on government reform endorsed his plan last week, despite the violence it does to the already mutilated budget.
……..
Gee, I wonder why they endorsed it. In any case this editorial failed to show how the privatization plan commits violence on the quote “mutilated” budget. There is a continued annoyance at hand with those who tend to think that cutting costs on a budget that needs to be balanced is mutilating it, that seems to lack maturity. I don’t know why but the only resolution they see to something that they even mislabel as a “crisis” is to simply keep spending levels the same and increase taxes. It’s a stunted viewpoint and it’s economically dangerous to the taxpayer.
1
Whether he forges ahead this fall or waits until winter, let's hope he's met at the doors of the state Capitol by a band of Knights who say No.
…………
I’m sorry, but I can’t join you in that hope. It is in fact a hope of mine that the general assembly looks more fondly at the act of privatization
Lets"s get Govt out of Business
You say that we will lose 20 - 40 million in revenue but never tell us how much it cost the Commonwealth to run and pay out retirements. I'll bet that just all the pensions cost more than 40 million a year and we haven't even payed anyones salary yet.