McDonnell Unveils Plan for Privatization of ABC Stores

Gov. Bob McDonnell's staff unveiled a plan on Wednesday that would allow for the retail liquor sales at ABC stores in Virginia to be handled through privately owned and licensed stores in Virginia. There are currently 332 liquor stores in the Commonwealth.

Under the plan, the number of stores that sell liquor would increase to 1,000 thanks to licenses that would be auctioned off to the highest bidder. There are 600 licenses available for existing large businesses including grocery stores and outlets such as Wal-Mart.

There will be 150 licenses for smaller businesses like wine and beer stores, and 25 licenses for retail pharmacies like Walgreen's and CVS. There would be new shelves in the stores. An additional 668 licenses would be determined by population density.

Delegate Richard Anderson (R-51) was in touch with Richmond, VA throughout the day yesterday to find out how this would affect Prince William County.

"There is a story floating that ABC privatization includes a tax increase," said Anderson. " This is incorrect, and I have been assured that there is no tax increase as has been reported by some sources."

Anderson noted that there is no 1.5 percent fee on stores that sell alcohol, including grocery stores. Furthermore, hotels and restaurants will have the option to pay an addition 2.5 percent "Restaurant Convenience Fee" for discounted liquor and spirits from private wholesalers with on-site delivery.

The licenses could be auctioned off in a year with stores able to add the new shelves in their business by September 2011.

According to the press release posted on McDonnell's website, there is no tax for the privatization, which would generate $500 million for the transportation budget.

"This is an opportunity to put half a billion dollars into transportation simply by eliminating an outdated government monopoly," said McDonnell in the press release.  "Five hundred million for roads and rail will mean congestion relief for our citizens. By privatizing ABC, Virginia will join the majority of states in the nation that have long recognized alcohol distribution is not a core function of government. Transportation, on the other hand, is a core function and this plan will deliver immediate results for Virginians frustrated by long commutes and stalled construction sites."

Gov. McDonnell also noted that the ABC privatization is to be one part of an overall solution to the state's transportation issues.

Delegate Anderson has not yet decided his position on this issue because he wants to discuss the documentation further.

"At the present time, I have not reached a decision on whether or not to support these proposals because I have not yet studied them in detail, and I expect that we will need greater definition and more data as the plan takes shape in the coming weeks," said Anderson in an e-mail to the press.

The plan was initially proposed on Aug. 25 by McDonnell's Commission on Government Reform and Restructuring.

Presentations from Wednesday's meeting can be viewed at http://www.reform.virginia.gov/ 

The Commission is set to consider the proposal on Oct. 4.

Editor's Note: Sherell Williams is the editor of the newly launched Annandale Patch.