McDonnell Disses Referendum on His ABC Obsession

It seems that Bob McDonnell  doesn’t see the need for a referendum on the issue of privatizing the state’s ABC stores. Most other decisions about state control of alcohol sales have been put to referendum, but he thinks his plan should be different. Why? Is McDonnell afraid that the voters won’t agree to his scheme to give away a large revenue source? Does he think he is somehow above putting radical changes in state policy to referendum? Maybe he agrees with George Bush, who once declared that a dictatorship is better…if he is the dictator. (We all saw how that turned out.)

He told the Washington Post, “If the General Assembly insisted on a referendum then it’s something certainly I’d consider.” Excuse me, but if the legislature insists on a referendum, it’s not up to McDonnell to “consider” it. It will be done, unless he wants to veto any chance of privatizing alcohol sales by refusing to sign a bill containing a referendum.

In the next sentence of his remarks to the Post McDonnell assured us that he wants “to make sure that we have money dropping in the bottom line on all our government reform issues as fast as possible.”  Now, I don’t think I can adequately intepret that Palin-esque statement. Does he mean he wants the bottom line of the budget to “drop,” i.e., show lower revenue and expenditures? Or, is he saying he wants to assure that the money from ABC sales isn’t lost to the “bottom line.” Hard to say, huh?

Since ABC profits amounted to $112 million of the $322 million returned by ABC stores to the General Fund last year, Mac and his acolytes must be counting on a whopping price tag for those licenses to sell spirits. After all, he did say that, magically, he won’t change the money the state gets from those sales, money that supports education, law enforcement, social programs, etc. The last time we got a “promise” of that sort was the lie Jim Gilmore told us about the cost to the state of that “no car tax” we still pay every year. I don’t know about you, but I simply don’t trust any Republican promise that when they take away revenue for government, there will, miraculously, be no loss in revenue. GOPers might think that they can work that sort of fiscal hocus pocus, but I’ve lived long enough to see how miserably they fail at handling things like money and budgets.

That $112 million in profits from 332 stores is about $340,000 per store. (Of course, as is true with all other forms of state revenue, northern Virginia and Hampton Roads provide the bulk of profit from the stores.)

I cannot conceive of any Republican-initiated scheme that would tax profits from those new wholesale and retail liquor establishments or increase taxes on liquor (Haven’t they all sworn in blood not to raise any taxes, ever?) So, annual licensing would have to bring in that $112 million.

I checked again the cost of licenses under McDonnell’s four proposals: With 300 licenses, each  would have to cost about $373,000 annually. With 800 licenses, the cost drops to about $140,000 each per year. If every existing beer and wine license also included the sale of liquor – 3,000 of them – the license cost drops to $37,300.

If people in retail have to pay that kind of money for a license, where are their profits going to come from? It will be from lots more volume. Lots more. Plus, their employees will likely be paid Walmart wages and benefits, i.e., slightly above minimum wage with no retirement benefits. Before too long, I know what we will have. Mom and Pop liquor stores – including those licenses for women and minority businesses -will be pushed out, and ultimately an oligopoly of a few wholesale and retail players will collude on prices and purchase “access” to legislators with campaign contributions.

If McDonnell actually wanted to protect the General Fund, he would propose some alternative tax or revenue source to guarantee continuation of the amount the state was deriving from ABC store profits. That won’t happen.

Twice before, governors and the legislature have looked at the sale of the ABC stores. Both times, no one could find a way to assure the General Fund wouldn’t take a huge hit. Does Bob McDonnell actually think he can change basic arithmetic, or is he lying, just like Gilmore did?