Shrinking Budget Limits Virginia Liquor Privatization Plan

By Jonathan Wilson

In Virginia, Governor Bob McDonnell's liquor privatization plan got the blessing of a panel he hand-picked himself, but his proposed revenue yield continues to shrink.

A panel of the Governor's Commission on Government Reform and Restructuring voted 5-1 for a modified, downsized version of a proposal offered three weeks ago to sell Virginia's state-owned liquor monopoly.

But the administration conceded that annual revenues from privatizing Department of Alcoholic Beverage Control liquor sales would be at least $47 million short of what the state agency now collects in taxes and profit margins. In a Sept. 8 presentation, the administration estimated the decline under a privatized system would be half that amount.

Senator Mary Margaret Whipple, a Democrat from Arlington, cast the lone dissenting vote on the panel. She called the decreased revenue projections "a bit of a shock."

Faced with the dwindling revenue projections, the administration and its allies have backed off financial arguments to focus on the philosophical question of whether the state government should be selling liquor.