From the Archives: Delegate Steve Landes is 'keeping an open mind' on Governor McDonnell's ABC privatization plan

Delegate Steve Landes is 'keeping an open mind' on Governor McDonnell's ABC privatization plan
August 29, 2010 12:08 PM MST

Governor Bob McDonnell’s proposal to privatize Virginia’s state-owned liquor stores “has some possibilities,” said Delegate Steve Landes (R-25) after a town-hall meeting on government reform in Harrisonburg on August 26.

Landes, whose district includes parts of Albemarle, Augusta, and Rockingham counties, as well as the city of Waynesboro, added that “at this point” he is “keeping an open mind.” He wants to talk to his constituents to find out what they like and don’t like about the plan.

Delegate Landes spoke to the Charlottesville Libertarian Examiner on the campus of James Madison University as the crowd dispersed from the governor's town hall. State Senator Mark Obenshain and Delegate Dickie Bell were also interviewed that night.

‘Public safety concerns’
The governor, he said, had “addressed a lot of the public safety concerns” but as a member of the House Appropriations Committee, one of his main concerns is “how is the revenue going to work, where would that go, how are we going to offset what could be a reduction” in the money the state takes in from liquor sales. Landes also expressed concern about what would happen to the portion of ABC profits that goes to local governments.

Asked if he has a sense of what his colleagues in the legislature are thinking about ABC privatization, Landes replied:

“Most of the people I’ve talked to are just like I am, trying to get information, trying to find out what the proposals are, [and] what the governor may be proposing.”

Once the government releases “his formal proposal,” Landes said, “we’ll all be looking at that.”

‘Devil’s in the details’
As a member of the General Assembly for the last 16 years, Landes explained, he has “found that the devil’s always in the details, so you need to see the bill, you need to see what it says, and where the dollars are going to go, how the franchise sales would be, who would be eligible, whether you’re talking about small business people or just larger corporations, chain stores, and the like. All those details would have to be looked at before I could say whether I’m in favor or against it.”

Regarding the question of whether privatization of the ABC system is a “matter of principle,” Landes pointed to his support of the private sector and free enterprise over the years, adding that “there is a good argument from the standpoint of, ‘we don’t control beer and wine [so] why is the state in the business of’” selling distilled spirits?

Noting the current economic climate, Landes went on, “If the economy was really good, it would be an easier decision for me, because we’re not looking at what the revenue picture is, where the dollars are coming from, where they’re going to go.”

The issue would be easier for him to decide, he said, because as a member of the Appropriations Committee, “I think you have to look at making sure that the dollars are going to match up and that projections would be there to offset what the state might lose from the standpoint of sales and what we might obtain from the standpoint of tax revenue.”

Publisher's note: This article was originally published on Examiner.com on August 29, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: Delegate Dickie Bell is 'on the fence' with regard to ABC privatization

Delegate Dickie Bell is 'on the fence' with regard to ABC privatization
August 28, 2010 7:42 PM MST

When Virginia Governor Bob McDonnell hosted a town hall meeting on the topic of government reform in Harrisonburg last Thursday, several state legislators from the area were in the audience.

One was Delegate Dickie Bell (R-20), who represents a district that includes Highland County, parts of Augusta and Rockingham counties, and the city of Staunton. He spoke to the Charlottesville Libertarian Examiner about Governor McDonnell’s proposals to privatize ABC stores and the state government’s monopoly on liquor sales.

‘Not as committed’
“The governor is very committed to privatizing ABC stores,” Bell said. “At this point, I have to say, I’m not as committed.”

Bell explained, however, that he is “a big believer in private enterprise and in using our private enterprise structure when we can.

“In most cases,” he said, “it’s a better way to go than having government do some of the things that we can do commercially.”

With regard to ABC privatization, however, Bell said “there are some questions that I need to have answered before I can get on board and fully support it.” He noted that he had spoken to Governor McDonnell before the town hall meeting and “he understands my concerns, I think.”

Bell also pointed out that his “concerns are not unique. They’re the same concerns that a lot of people have at this point.”

‘Social impact’
He is primarily concerned “about the social impact” but also worries “that a lot of the smaller retailers in the [Shenandoah] Valley seem to think that this will squeeze them out and, instead of helping their business, will actually put a squeeze on them.

“If only the bigger, larger, the major retailers have this opportunity,” Bell suggested, “it’ll never trickle down to smaller guys.”

The motivation for this particular concern, he said, is because “I’m a strong advocate for small business. We have to level the playing field. If we’re going to privatize, we’ve got to make sure that every size business out there has the same opportunity.”

Bell said he is also concerned about the effects on Virginia’s “very clean system” of selling distilled spirits.

“There’s no way we can privatize and not increase sales and not increase alcohol consumptions,” he said.

‘Based on my feeling’
When asked, “Is that based on empirical data that you have?,” Bell paused briefly before replying:

“No, it’s based on my feeling” that competition and more stores and expanded distribution will result in “increased sales.”

Summarizing his thoughts on privatization, Bell said, “Mostly, I’m just concerned that we have a system now that’s not corrupt, it’s very clean, it’s very efficient, one of the most efficient things that the state of Virginia does. I’d hate for us to lose that.”

He concluded: “I would say that I’m on the fence right now,” and acknowledged that he needs to be convinced that privatization is the right thing to do.



Publisher's note: This article was originally published on Examiner.com on August 28, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives: State Senator Mark Obenshain on Virginia liquor privatization: 'I was for it before it was cool'

State Senator Mark Obenshain on Virginia liquor privatization: 'I was for it before it was cool'
August 27, 2010 10:37 AM MST

A member of Governor Bob McDonnell’s Commission on Government Reform and Restructuring, state Senator Mark Obenshain of Harrisonburg says “I was for it before it was cool” when asked what he thinks about the governor’s proposals to privatize the Commonwealth’s monopoly on the sale of distilled spirits.

ABC privatization was a central topic of discussion when Governor McDonnell held a town hall meeting on the campus of James Madison University on August 26, and Senator Obenshain took a few minutes with the Charlottesville Libertarian Examiner to explain his support for the proposals.

“I’ve been pushing ABC privatization for several years,” said Obenshain, “and I was delighted last year when the Governor announced that he was going to include that as part of his transportation agenda. I’ve been working very closely with the administration, I’m fully on board as a member of the team, and I look forward to seeing it pushed through to fruition.”

‘Government’s essential mission’
Obenshain became involved in this issue, he said, because “I’ve always been a free-market guy. I believe in reform. I believe in prioritizing and figuring out what government’s essential mission is, and what it’s not.”

Speaking “frankly,” Obenshain added, “running a monopoly [and] running a statewide retail operation is something that state government really has no business being in. They’ve got to get out. We’re now 76 years post-Prohibition. Notwithstanding the fact that Virginia is a tradition-bound state -- which I love about Virginia -- it is about time for us to enter the post-Prohibition era.”

Asked what his colleagues in the state Senate are thinking about ABC privatization, Obenshain replied:

“I think a lot of them are keeping their powder dry,” because they have two major concerns.

“Number one, can it be done in an economically responsible way, and number two, can it be done in a socially responsible way?”

‘Crafting his proposal’
Obenshain explained that “the governor is crafting his proposal in a way that both of those questions can be answered in the affirmative. We can do it without losing the revenue stream that’s generated through our public ABC store operation and we can do it in a way that doesn’t endanger the public health [or] public safety.”

Addressing the worries of many who question the ABC privatization idea, Obenshain offered these assurances:

“It doesn’t put a liquor store on every corner. It preserves the right of localities and local governments and community organizations to express their support or opposition to proposed locations for licensees.”

He added that privatization “can be done in a way that satisfies the concerns of those who are on the fence.”

Obenshain conceded that there will be “people who are going to stake out a position in opposition to it,” including some “motivated by social reasons.”

‘Good idea for Virginia’
Identifying another set of opponents, the Harrisonburg senator suggested that some “are going to be opposed to it because it represents an infusion of capital into the transportation system. Their vision for solving the transportation problem is to raise taxes. As a consequence, anything that gets in the way of their effort to raise taxes is going to be something that they’re going to oppose.”

Obenshain summed up his views on ABC privatization by saying the governor’s proposals will “make good sense for Virginians.

“I would not support it if it was going to result in increased incidence of alcohol abuse,” he said, “or liquor stores on every corner or [become] a drain on the resources of the Commonwealth. I believe it can be done without any of that and I believe it’s a good idea for Virginia.”


Publisher's note: This article was originally published on Examiner.com on August 27, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.

From the Archives - Privatizing ABC: Virginia Institute's John Taylor wants 'a small government I can easily monitor'

Privatizing ABC: Virginia Institute's John Taylor wants 'a small government I can easily monitor'
August 26, 2010 12:26 PM MST

Tonight in Harrisonburg, Governor Bob McDonnell will be holding the sixth in his series of eight town hall meetings on the topic of reforming Virginia’s government. As always, the centerpiece of the governor’s presentation will be his proposals to privatize the state’s monopoly on the wholesale and retail sale of distilled spirits, which dates to 1934 and the end of alcohol Prohibition.

Earlier this month, the Virginia Institute for Public Policy, a state-level think tank based in Gainesville, published a study called Impaired Judgment: The Failure of Control States to Reduce Alcohol-Related Problems, written by George Mason University economist Donald Boudreaux and Julia Williams, a consultant with the Regulatory Economics Group, LLC.

‘No statistically significant difference’
A few days after the study was released, the Charlottesville Libertarian Examiner caught up with Institute president John Taylor in Richmond, who summarized its findings.

“We looked at the public health and safety aspects of privatizing the state-owned liquor stores,” Taylor explained, comparing “the control stores that have monopolies over the sale of distilled spirits vs. the license states where the state government will sell licenses to private vendors to sell distilled spirits.”

These findings closely match those found by Duquesne University economist Antony Davies in research he did for a Pennsylvania think tank.

The three areas examined in the study, he said, “were alcohol-related deaths, binge drinking, and drunk-driving fatalities. In those three areas, what we found was there’s no statistically significant difference between the control states and the license states. There just isn’t.”

If one argues that “we have to control distilled spirit sales and give the government a monopoly,” Taylor said, “then public health and public safety [are] not really the excuse,” repeating for emphasis: “In those three areas, there is really not a need or an excuse for the government to be involved.”

With regard to the revenue that could be gained (or lost) through privatization, Taylor said that he understands the governor has claimed privatization will result in a windfall of $500 million that will be applied to transportation program.

‘Moral hazard’
However, he added, “To me, the revenue argument is not a good argument to begin with, because I don’t believe selling liquor is a core function of government. If you can say, ‘well, yeah, but the state makes a lot of money off of it,’ [then] the state might make a lot of money off a lot of things that should be private industries.”

Turning sardonic, Taylor added with a smile:

“I mean, if we allow them to have a monopoly to sell liquor, before you know it, they’ll take over car companies, insurance companies, banks – oh, sorry, they already do that.”

Having government involved in one consumer business, like liquor, Taylor argued, is the start of “a slippery slope and it’s a moral hazard. I just don’t want our government involved in this. I want a small government that I can easily monitor to make sure I know what they’re doing so that I can bash them when they overstep their bounds.”

Asked what he has heard from members of the General Assembly, who will have to vote to approve any privatization program, Taylor noted that “there are some that have expressed views that they don’t want to give up the ABC stores simply because they think it would be a loss of revenue.”

‘Not a core function’
At the same time, however, he pointed out that “the more conservative members of the General Assembly would agree that this is really not a core function of government and the government should get out of it.”

Following tonight’s town hall in Harrisonburg, Governor McDonnell will meet with voters and taxpayers in Danville on August 30 and in Bristol on August 31. Press reports indicate that he will officially release his ABC privatization proposals on September 8, for the consideration of the Government Reform Commission.

Publisher's note: This article was originally published on Examiner.com on August 26, 2010. The Examiner.com publishing platform was discontinued July 1, 2016, and its web site went dark on or about July 10, 2016.  I am republishing this piece in an effort to preserve it and all my other contributions to Examiner.com since April 6, 2010. It is reposted here without most of the internal links that were in the original.