Va. governor presses case for private booze sales

By BOB LEWIS

FREDERICKSBURG, Va.

Gov. Bob McDonnell is still struggling to sell his plan to privatize state-owned liquor stores and other reforms as he hits the midway point of a tour around the state to hold town hall-style forums on the topic.

Before about 300 people at the University of Mary Washington on Tuesday, the Republican governor was not only trying to win over balky Democrats, he was also trying to get religious conservatives and even some Republican legislators behind him. The forum was the fourth of eight planned around the state.

"Right now, there is a government monopoly over the distribution of distilled spirits," McDonnell said, portraying the 76-year-old Department of Alcoholic Beverage Control system in dark, "Big Brother" terms.

He quoted his two Democratic predecessors as voicing doubts about whether the state should be in the business of selling strong drink. He did not mention that Govs. Mark R. Warner and Timothy M. Kaine rejected liquor privatization on grounds that it would eliminate an efficient and orderly agency that yields hundreds of millions annually for the state budget.

He pressed on, suggesting that Virginia drinkers are underserved. Nationally, there are 3.2 liquor stores per every 10,000 population. In Virginia, he said, the average is 0.6 stores per 10,000 residents.

Putting the state's liquor wholesale and retail operations in private hands, he said, would boost Virginia's average to 1.4 stores per 10,000 people.

Then, the Powerpoint slide on the massive screen behind him changed to an image of streaming tail lights and the phrase, "Hundreds of Millions for Transportation," referring to money that McDonnell says privatization would generate.

"This is one of the chief reasons I am asking for it," McDonnell said.

Many in the audience agreed, but none was as succinct as Brian Dent, who drove more than an hour from Charlottesville to hear McDonnell's ideas.

"I want you to focus on running the state. Let somebody else worry about selling alcohol," said Dent, one of about two dozen people who took the microphones to address the governor.

But it was a hard sell to others. McDonnell says the state will take in $300 million to $500 million from franchising out its 332 ABC retail outlets and its centralized warehouse and distribution system.

He claims that the tax revenue and profits the state receives from the booze business -- about $230 million a year now -- would remain unchanged.

Democrats, however, don't believe it, and they control the state Senate.

Senate Majority Leader Richard L. Saslaw last week ridiculed the idea, saying a threefold increase in liquor sales would be necessary to reap the same revenue the ABC system does now, putting more drunks on the roads the state needs money to repair.

Del. Albert Pollard, D-Lancaster, has supported previous reforms McDonnell has proposed, including a substantial broadening of charter schools in Virginia passed this year. But selling the state's liquor stores is bad business, Pollard said as he milled about in the college auditorium minutes before the forum began.

"If you want more milk, you don't sell the cow," said Pollard, the great-grandson of the governor who created the ABC system, John Garland Pollard, who served from 1930-34.

"Any business person knows you ought to sell a business for five to seven times the yearly earnings," Pollard said, meaning the state should be taking in more than $1 billion in franchise fees. "I don't see that kind of return there."

Even Republican Del. Robert D. Orrock Sr. of Caroline County voiced reservations about private liquor sales. And he, too, used a dairy farm analogy.

"My mind is open, but right now, it (the ABC) is a cash cow, and nobody would sell off a cow that's producing well unless we know we'd get enough from it to live comfortably," Orrock said.

Chuck Miller is in the business of distilling whiskey in Culpeper County, and he had serious concerns about the proposal. He fears that once the liquor industry in Virginia is turned over to big wholesalers and major distillers, small labels such as his will be driven off the store shelves where the state now guarantees them space.

Miller, who bottles Virginia Lightning and Copper Kettle whiskeys, got his chance to put the question directly to McDonnell at the forum, suggesting "user fees" such as higher gasoline taxes instead of selling the liquor stores.

"I know you want to get out of the liquor business, but it does make a lot of money for the state of Virginia," Miller said.