Paul Goldman: Wilder reconsidering support for McDonnell ABC plan? Prices would rise 30%.

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    Very interesting, nice work by former Doug Wilder advisor Paul Goldman to demonstrate that Bob McDonnell’s ABC privatization plan will raise the average retail price for a bottle of liquor by 30%. Now that’s Republican economics for you!

    Technically, I am just presuming what former Governor Doug Wilder will do when he gets a chance to review a study done for his Administration – the most comprehensive ever in Virginia – that found, when applied to the McDonnell ABC privatization approach [Wilder checked on that option] the following:  the average retail price for a bottle of liquor would increase by 30%!

    I just managed to get my hands on the 1993 study today, and while it takes a lot of effort to wade through the document, the findings are right there, can’t miss them if you read the whole thing.

    If anything, prices would have to raise even more in 2011, since the state has a bigger mark-up on hard liquor now than back then, so revenue neutrality is harder to due without even higher prices due to the way McDonnell-type plans have to work to replace this lost state revenue.  

    Someone, I know it isn’t easy since I had to do it for a few Governors, has to be the messenger of bad news to the Governor, indeed his staff,  which is job one ideally doesn’t ever want even on a one-time basis.

    But someone has to be a real friend to the Governor right now; he has been badly served by people who in my view had conflicting agendas. But no need to name names, they are good people, they just fell into a trap here, we are all human, mistakes happen. I can vouch for that.

    As I have said, there is a way, if we as a state want to get out of the businesses of selling liquor, to do ABC privatization so it avoids all these pitfalls, raises the money without new taxes, keeps consumer prices as low as market forces will take them, protects the rural areas, while providing the transportation funding.

    When former Governor Wilder gets a chance to review the study prepared for the Wilder Administration, he will see the hand-writing on the wall.