Monday, December 9, 2019
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McDonnell Got What He Bought

Governor McDonnell revealed his often re-revised ABC privatization plan that does not privatize the liquor business. There will be time to revel in the details later, but the initiative is already being met with rolling eyes. If Governor McDonnell owned a dairy farm, he'd butcher the cows.

Even before this latest iteration, the writing was on the wall. Here are Senator Northam (D-6th) and Delegate Lewis (D-100th) meeting with their Eastern Shore constituency last week in Cape Charles:

"(Governor McDonnell) hired the PFM Group for $76,900. By proposing a plan that it says would bring in money upfront for the state's underfunded road maintenance and construction budgets, and increased annual revenues, the administration hopes this latest crack at privatization will be more politically palatable." as reported in the Richmond Times Dispatch.

Can we get a refund?

CBN Absolves Bob McDonnell of Sin

In the church of my youth, lying was sinning; that was the church of Bob McDonnell's youth. For Pat Robertson's ilk, a lie is a convenient tool; particularly when it fosters an essential myth: the myth of Bob McDonnell's competence. This "white lie," this budget surplus, is a mortal sin.

Here is a patently grievous lie right from Robertson's organ:

"We said 'Look, you save money, you'll have a 3 percent bonus.' So they saved about $175 million and we spent about $80 million on bonuses. I mean, it really worked well - private sector incentives to get people to conserve and save and be more efficient." - Bob McDonnell

McDonnell claims that bringing in private sector incentives carried the day. He must be talking about the kind of Wall Street incentives that led to the collapse of the financial sector under a Republican watch. Bob McDonnell's lackeys robbed the state employee retirement system to balance the budget. It wasn't some incentive at the end of the fiscal year. That defies credulity. Stealing: there's some mention of that in those commandments so many Robertson followers want to display prominently everywhere. But in their minds it isn't stealing. It is a contribution by state employees; passing the plate, so to speak. You know, the way those banks voluntarily contributed to the James brothers.  

McDonnell Administration: Call Us When We Can Take Credit

Even being handed a smoking gun, the McDonnell administration managed nothing more than to hedge a bet. Jim Cheng made a veiled effort to position the administration so it could claim participation and credit or maintain credible deniability for Waynesboro's overseas trade venture. Governor McDonnell's team just don't hunt.

"The secretary of trade [Jim Cheng] wants to hold a meeting after I get back to discuss future development of the foreign trade zone and what we're doing here." - Waynesboro councilman Mike Harris to The News Virginian

It isn't American economic development China is after, nor should it be. It's about business and national interests: concepts well beyond the scope of the Bob McDonnell team's skill set (see: ABC Privatization, VRS funding, and the soon to be nostalgic AAA bond rating). By the way, the hunt would have taken only a few keystrokes or a call to, heaven forbid, a scholar at the University of Virginia. Why didn't Cheng know that Hong Kong is positioned as a primary arbiter for wine imports to mainland China? That China is already a domestic wine producer and intends to become a major exporter (Great Wall Wine Company and others already export worldwide). That the Chinese domestic competition sells a mid-range wine for about $5.45 a bottle but export quality is fetching $30 to $45 per bottle in Hong Kong (all USD). That this may be an effort at import/export arbitrage; that we might leverage that margin to our advantage. We shouldn't give away the vineyard for a short term gain or potential near-term boom and the inevitable long-term disappointment. But Cheng was not so forthcoming.

"In terms of overall growth in demand for wine in China over the next 10 years, China will become both a massive producer and a massive importer of wine," says Don St Pierre, head of ASC, the Chinese wine importer and distributor acquired by Japanese drinks giant Suntory in 2009.

Wine has suffered the same trials as any number of other Chinese products. Excessive levels of ethanol and chemical additives have resulted in safety concerns and recalls. Virginia winery best practices may be the object of Chinese attention rather than the wines that are being produced in our region. Or it could be something entirely different. One thing is certain: China is not footing the bill for the Waynesboro councilman's journey without an anticipated return on investment. Another thing is certain: Governor McDonnell's team is out of its league. It can't even table the equivalent of a city councilman's initiative; nor, they have proven, should they. But they are happy to share anything Councilman Price may accomplish so long as there's credit to go around. They are proving how much they do love credit.

Sweetening the ABC Transportation Windfall Pot

There is a mistaken impression about my opposition to privatizing the ABC stores. What I oppose is killing the Golden Goose without first harvesting the fertile eggs that will replenish the revenue flow. In the spirit of bipartisanship, I offer up a Republican goose egg that may tip the scales.

Michigan state Representative Hugh Crawford (R-38th) sponsored a bill that went into effect just yesterday allowing the licensing of not more than 20 "nonpublic continuing care retirement centers." The $600 fee allows a licensed retirement center to sell and serve beer, wine, and spirits to residents and their guests for on-premises consumption.

Fiscal Impact: Assuming that 20 new licenses authorized by the bill were issued, revenue of approximately $12,000 annually would be available for distribution, increasing revenue to the LCC by an estimated $5,000, increasing liquor law enforcement grants by $6,600, and increasing State revenue to the Department of Community Health for alcoholism treatment by $400.

Crawford, a long term Oakland County political figure whose wife retired after a 25-year tenure as Novi Senior Services Director, was elected to his second legislative term in November. This is a fellow's alcohol positions are a mixed bag, though, and may not fully be on board with privatization of the alcohol sales. He voted against allowing out-of-state shipment of wine and beer to Michigan households, maintaining a "wholesaler monopoly." But he buttressed his free market bona fides by supporting an initiative to create "local right-to-work zones" in Michigan.  

Gov. McDonnell switches ABC position, now favors government monopoly?

McDonnell moves to pro-government position, leaving Goldman as the last pro-business guy standing!!

The Goldman pro-business plan can be found on Blue Virginia.

Also: McDonnell Reform Commission a total bust and it hurt his ABC proposal too.

By Paul Goldman

According to news accounts, the McDonnell Administration is said to considering a switch in its ABC position towards endorsing a plan that keeps the government run wholesale hard liquor business, but privatizes the retail end. This, of course, is directly counter to what McDonnell has been saying for months now (see his Fourth of July speech on how being in the liquor business is not a core function of government and how he is going to be the Governor who finally gets it and thus gets the state out of it).

"Never mind" as that famous SNL character use to say!

As readers of this column know, I have previously put out a detailed plan which privatizes the ABC operation at the retail and wholesales levels, does not create a hole in the budget like the McDonnell plan (actually it raises money), and - based on McDonnell's latest numbers - produces way more transportation funding! I guess I am pro-business and the Governor is pro-government.

ABC privatization is McDonnell’s Waterloo

Jeff Schapiro of the Richmond Times Dispatch has a piece up today entitled "Schapiro: ABC as McDonnell's political hangover."  Here's a little of what Schapiro has to say about Bob McDonnell's ABC debacle:
He has tried to have it both ways, peddling a shift to private liquor sales as a means toward shrinking the Virginia bureaucracy and producing more cash for the state.

Now McDonnell's gambit is hung up. It could be next year, rather than next month, before it's considered by legislators.

And he's hung over. Privatization, endorsed Monday by his hand-picked commission recommending ways to cut the size and cost of government, is producing only headaches, causing tension with allies and even more with adversaries.

Read Schapiro's complete article at the Richmond Times Dispatch.

A few months ago, people were talking about the vice presidency or even the presidency for Bob McDonnell, but not anymore.  His nice-guy image has been tarnished by what appears to be a rather obvious attempt to cheat the people of Virginia--an attempt to sell our liquor stores for less than a tenth of what they are worth.

Privatization: McDonnell’s Hangover?

Jeff Shapiro of the Times-Dispatch is reporting what just about everyone is concluding: Barring some sort of GOPer miracle, Bob McDonnell's linchpin to his bogus "transportation plan," selling off the ABC crown jewels, is DOA in the General Assembly. Or, as Shapiro puts it, "He may have four days, possibly eight, to infuse life into an idea that, for many of his fellow Republicans, is as dead - and delusion-inducing - as the worm in a bottle of tequila."

Evidently, even McDonnell's own Republicans aren't buying a plan that would hit the already comatose General Fund with another $21 million (or worse) revenue cut. If McDonnell closes that revenue gap with an even higher wholesale tax than previously proposed, he will be angering the very guys that were among his biggest donors in 2009, from whom he garnered more than $350,000 according to VPAP.

Roanoke Times columnist Dan Casey tried his hand at some of the wholesale "arithmetic" in McDonnell's "plan" today. To illustrate, Casey used the ABC stores' best seller, Aristocrat Vodka. Right now, a fifth of Aristocrat costs $6.75 at retail. By Casey's calculations, under the Rube-Goldberg-like McDonnell "privatization" plan with all its "fees" and add-ons, that same fifth would cost about $10.00. So much for privatization bringing lower costs to the consumer.

Multiple studies over the years have shown that going from a state-owned system for alcohol sales to privatization results in increased prices for the consumer and lower revenue for the governmental entity. Why should Virginia be different? It's simple math. When producer, wholesaler, and retailer each add on a healthy profit margin to a product, it will cost more. If the government doesn't recoup the profit it made by increasing taxes a like amount, it will have less revenue.

New Study: “Big Alcohol” Driving McDonnell’s Liquor Privatization Plans

What's really driving Bob McDonnell's liquor privatization plans? According to a new study by the alcohol industry watchdog Marin Institute, it's very simple:
With Big Alcohol seeking to increase profit margins, across the U.S. powerful corporations and misguided politicians are promoting plans to eliminate state control of alcohol sales, promising better prices and selection in return for less alcohol regulation. As states become more desperate for revenue, a booming alcohol business could overshadow the protection of public health and economic stability.
Here in Virginia, according to the report, McDonnell's plan would cause "spirits sales" to increase 21 percent, while "total alcohol consumption would increase as much as 7 percent." This will "cause an estimated $50 million per year in harm paid from state coffers (mostly criminal justice costs), and $1 billion per year in total harm costs." Privatization also "will decrease annual state alcohol revenue by $200-$300 million," lead to a tripling - from 332 to 1,000 - in "the number of stores selling spirits," and even lead to "220 more alcohol-related deaths...each year."

In other words, this is an absolutely horrendous idea on just about all counts.  But wait, you ask, if it's such a horrible idea, why would Bob McDonnell go this route? Other than being "misguided" and "desperate for revenue," perhaps the fact that "McDonnell received $448,407 from Big Alcohol, including Anheuser-Busch, InBev, Diageo, and Associated Distributors," between 2008 and 2010, might help explain it? But wait, there's more:

Southside Gives McDonnell’s Liquor Privatization Plan “Thumbs Down”

Add Southside Virginia to Virginia religious leaders in opposition to Bob McDonnell's cockamamie, misguided "plan" (if we can even call it that) to let the liquor industry run wild in Virginia.
Two Southside Republican delegates, James Edmunds of Halifax and Tommy Wright of Lunenburg, said this week they are leaning strongly towards voting against the ABC privatization plan.

"If we were voting [for the state] to go into the liquor business, I'd vote against it," said Del. Edmunds. "But now that we're in it, I don't see where [privatization] would be of any benefit to our rural district."

Based on his own and his constituents' concerns about the social consequences of what he believes would be the wider availability of alcohol in communities, Del. Wright also said he would have to vote against McDonnell's proposal.

"The only way for the plan to work is to increase the number of stores," Wright said. "I wouldn't be surprised if the number of outlets tripled. And the more availability there is, the more consumption there would be. As a rule there are some costs to society of problems that alcohol does bring."

Exactly right. The question is, did Bob McDonnell and his advisors think about any of this over the past year or so, when they started touting this "plan?"  Did they talk to anyone about it?  If so, did they just ignore everyone and everything? Or, is this simply the gang that can't shoot straight on anything?  Lame.

Virginia Religious Leaders Unite Against McDonnell’s Liquor Plan

Gotta love this:
The Virginia Interfaith Center for Public Policy is leading a coalition and a petition drive in opposition to Gov. Bob McDonnell's plan to privatize the state's liquor stores.

[...]

The coalition, called Your Values, Your Voice, includes the Baptist General Association of Virginia, an umbrella group affiliated with more than 1,400 Virginia churches.

Uh, last I checked, that's also known as "Bob McDonnell's base." Now, they are abandoning him over his cockamamie, misguided "plan" (if we can even call it that) to let the liquor industry run wild in Virginia.  Not surprisingly, religious conservatives aren't falling for it. Nor, from what I'm hearing, are many other people.

All of this is making the McDonnell people a wee bit defensive and testy. For instance, check this out:

Stacey Johnson, press secretary to McDonnell, said the coalition's objections "have been repeatedly proven incorrect. If these groups oppose gaining a half a billion dollars for transportation without a tax increase, that's their prerogative. But they need to answer: How do they propose to fund transportation in Virginia?"
That's right, the McDonnell administration is demanding that a coalition of Virginia religious groups come up with their own transportation plan! Is that bizarre or what?  Can anyone remember anything similar from a Republican governor, or even a Democratic governor, in recent years? Bizarre.