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.

Budget Transparency in Virginia - Take Two

Last year, a bipartisan coalition of delegates and state senators supported legislation to bring more transparency to the Virginia budget, by requiring state agencies to post all their revenues and expenditures on-line in an easily searchable (and Googleable) format. Under current conditions, even members of the General Assembly -- other than Finance Committee chairmen -- are sometimes forced to make a Freedom of Information Act (FOIA) request in order to obtain budget data from state agencies. (Imagine how much more difficult it is for average citizens to find out how their tax dollars are being spent.)

Unfortunately, last year's proposals failed to win approval by the General Assembly, so this year new bills are being introduced for the same purpose.

The bills are patroned on the state Senate side by Republican Ken Cuccinelli and Democrat Chap Petersen (both of Fairfax County)with SB 936 and on the House side by Delegate Ben Cline (R-Amherst) with HB 1360.

Yesterday there was a news conference in the state Capitol building in Richmond, sponsored by the statewide advocacy group, Tertium Quids, at which Cline, Cuccinelli, and Petersen spoke about the legislation. Tertium Quids president John Taylor -- who also hosts the monthly Tuesday Morning Group Coalition meetings -- introduce the legislators and also spoke about other legislative initiatives that Tertium Quids is supporting during this year's General Assembly session.

Taylor noted that similar budget transparency legislation at the federal level was pushed through Congress by the efforts of then-Illinois Senator Barack Obama, who reiterated his support for such transparency last week when, as President-elect, he gave a major speech on economic matters at George Mason University.

Obama had cosponsored the federal legislation with Oklahoma Republican Tom Coburn. When the searchable database went live in late 2007, Obama made these remarks on the floor of the U.S. Senate (from the Congressional Record, December 13, 2007; pp. S15456-S15457):

Mr. President, I am very pleased to celebrate today's launch of USAspending.gov. This is an important day, an important milestone on the path to greater openness and transparency in the Federal Government. This site helps us to achieve a very simple and powerful vision: a vision that, in a democracy, the people ought to know what their Government is doing: how the Government is raising and spending money, how it is making and enforcing law, how it is supporting projects, how decisions are being made, and how results are being evaluated.

It is not a Democratic vision or a Republican vision. It is a commonsense vision of Government transparency and accessibility. It is a vision that rejects the idea that Government actions and decisions should be kept secret or classified. It is a vision that believes that information is at the heart of democracy and that we all must resist the dangerous trend of withholding or classifying or burying information that the American people have a right to know and need to know if they are to hold their leaders accountable.

I have been very troubled by the extent to which America has become a nation of government secrets. More and more information is kept secret or made intolerably complicated and inaccessible. More and more decisions are made behind closed doors with access limited to insiders and lobbyists.

USAspending.gov along with watchdog groups will give us all tools to help buck that trend. It will help by opening Government processes up to public view. It will provide a window into the Federal budget so all Americans can see how their tax dollars are being spent--how their Nation's resources are being used and obligated, where money is going as well as where it is not going. We will be able to see which grantees and contractors are receiving money and the congressional district where the contract's services are performed. We will see which agencies are purchasing what, from whom, and where. Technology makes it possible for every American to know what is happening and to hold elected officials accountable.

If Government spending can't withstand public scrutiny, then the money shouldn't be spent. If a Government agency isn't willing to be held accountable for the grants or contracts it awards, then that agency shouldn't have control over Federal resources. Whether you believe the Government ought to spend more money or spend less, you should certainly be able to agree that the Government ought to spend every penny efficiently and transparently. Democrats and Republicans can all agree that wasteful spending is unacceptable, whether it is by FEMA, HUD, DOD, or any other Federal agency.

Transparency by itself is not enough, but transparency is the first step to holding Government accountable for its actions. Transparency is a prerequisite to oversight and financial control. We can't reduce waste, fraud, and abuse without knowing how, where, and why Federal money is flowing out the door.

USAspending.gov is a very good beginning. The Web site does not yet deliver everything that it is required to under the law, but its limitations and shortcomings are transparent, and it will get better and more complete week after week. I am also confident that people will use the site and will provide feedback directly on the site's community ``Wiki'' function for collecting and sharing public comments. This will raise the expectations of all Americans for greater transparency, access, and accountability. Now it will be up to us elected officials to meet those expectations.

It is important to point out that this site would not have been possible without the grassroots efforts of watchdog groups across the political spectrum who lobbied for passage of the Federal Funding Accountability and Transparency Act, which Senator Coburn and I like to call the Transparency Act. The story behind the Transparency Act embodies the best of our democratic traditions--a bipartisan effort fueled by ordinary people who refused to accept that the Government couldn't make public information freely and simply available. Throughout this process, it has been an honor to work with Senator Coburn and to witness the dedicated work of the staff at OMB.

At Tuesday's press conference in Richmond, I was able to capture the remarks of Taylor, Cline, Cuccinelli, and Petersen on video. I posted the video to YouTube in seven distinct sections.

In Part I, John Taylor talks about Tertium Quids overall legislative agenda:

In Part II, Delegate Ben Cline discusses his budget transparency initiative:

State Senator Ken Cuccinelli takes his turn in Part III:

State Senator Chap Petersen offers his (brief) thoughts on budget transparency in Part IV:

In Part V, John Taylor takes to the lectern to summarize what's been said and then to open up the floor to questions:

Taylor, Cline, Cuccinelli, and Petersen take questions from the press and other attendees in Parts VI and VII:

Several news outlets covered the press conference. D.C. all-news radio station WTOP has a report by Hank Silverberg, who notes:

The bill has bipartisan support.

"I look at this bill kind of like that old Sy Sims commercial -- an educated consumer is our best customer," says Sen. Chap Peterson (D-Fairfax). "I believe that in politics."

A companion bill would also change state law to allow local governments to set up the same kind of database for their budgets. Fairfax, Prince William and Stafford counties have already expressed interest in doing that.

Both Richmond TV station WRIC (Channel 8) and the Lynchburg News & Advance covered the event, but I have been unable to find reports on their web sites. Perhaps those will be posted later today.

Update, January 14: I understand WRIC-TV used some images from yesterday's press conference on its noon news broadcast today, but I still haven't been able to find anything on the TV station's web site.

On the other hand, Cheryl Chumley has a report in today's Stafford County Sun, with a headline related to the news that the House of Delegates will now videostream its sessions on line. On the budget transparency issue, Chumley, a reporter with the News & Messenger, writes:

On Tuesday, two more Republicans united with a Democrat in a press conference at the Senate Building to promote and highlight upcoming legislation.

“Transparency,“ said John Taylor, from Gainesville, whose nonprofit issue advocacy group Tertium Quids was hosting the affair, “is an issue whose time has come.“

In attendance — and agreeing with that principle via sponsorship or support of various related pieces of legislation — were Sens. Ken Cuccinelli, R-Fairfax, and Chap Petersen, D-Fairfax, as well as Del. Ben Cline, R-Amherst. All are pushing to require Virginia’s budgets and expenditures be posted online.

“It will help us by putting millions of eyeballs on our budget,“ said Cline, who added his passion for the open government measure stemmed from seeing a lottery ticket showing Donald Trump’s picture.

“I know Donald Trump doesn’t do anything for free,“ he said, and following what he described as a lengthy inquiry process, he finally learned the cost for this licensing agreement. “It was a quarter-million dollars. That upset me. That upset my constituents when I told them about it.“

The cost for posting Virginia’s budget was figured at $300,000 last year, Cuccinelli said. But “that estimate is outrageously high,“ he said, as other states post the same without any price tag to taxpayers. This year’s estimate is not yet available, he said.

The idea of an online budget has been brought before the General Assembly in past years. During the last session, one such bill was shot down largely due to efforts of Sen. Edward Houck, D-Spotsylvania, who is also chairman of the subcommittee that deals with Freedom of Information Act issues, according to speakers and audience members who recalled the vote.

Bob Barr Comes to Richmond

Circumstances prevented me from attending the Tuesday Morning Group Coalition meeting in Richmond this morning. The Tuesday Morning Group is hosted by John Taylor and Tertium Quids. It meets generally on the second Tuesday of each month so that Virginia political activists can hear from prominent speakers on the issues of the day and compare notes with each other about current events.

Today was quite a program and I had looked forward to it. (As recently as late yesterday afternoon, I had exchanged emails with John Taylor about my plans to record part of the meeting on video.) The speakers included Paul Jacob of the Sam Adams Alliance and the new chairman of the Republican Party of Virginia, Delegate Jeff Frederick.

The star of the show, however, was to be former Georgia Congressman Bob Barr, who is currently running for president as the nominee of the Libertarian Party. I have not previously met Congressman Barr and I hope today's missed opportunity does not mean I will not have a chance to do so before the election campaign is over. (I am counting on the University Libertarians to invite the candidate to Charlottesville in September or October.)

Fortunately, I knew that Steven Latimer would be attending the meeting and I implored him to get Congressman Barr's remarks on video so that they could be posted to YouTube (and, by implication, here).

Steven was more than willing to take up the task.

(For those who might be interested, Norm Leahy has a full report of the press lunch Barr had after the meeting.)

In the first part of this four-part video, John Taylor introduces Bob Barr. A couple of good lines worth noting, first from Taylor:

"The federal prosecutor who sent my congressman off to the Big House was Bob Barr -- something I will forever be grateful for..."

Then from Barr:

"Whenever you get libertarians into a room together, even if they agree on everything, they'll find something to argue about."

"The one thing that's missing from the Republican Party is any sense of excitement."

In part two, Barr starts off by noting:

"Neither of the two major parties has any vision or leadership whatsoever. It seems as if they not only have no leadership or vision or agenda for the American people, but they go out of their way to avoid it."

Here's the whole segment:

The expected third and fourth parts have not yet been uploaded to YouTube. When they are, I will post them here, too. Watch for an update soon.

Update #1: The mainstream media also covered Congressman Barr's speech: WTVR-TV in Richmond (with video); Julian Walker in the Virginian-Pilot; NBC29 in Charlottesville (WVIR-TV); WDBJ-TV Channel 7 in Roanoke; and Tyler Whitley in the Richmond Times-Dispatch.

Update #2: Part 3 of the video of Barr's remarks, in which he talks about ballot access challenges (especially Oklahoma and West Virginia, the hardest nuts to crack).

In this segment, Barr proposes a "new Grace Commission ... one on steroids" that would focus not just on government waste "but wasteful government," not just the "bad aspects of what government is doing, but the bad aspects of government itself."

He said we need to educate the American public about the tremendous waste, "not just in the money involved, but the power involved" and we need to characterize every government program according to three criteria: (1) "Is there a basis, explicit or reasonably implied, in the Constitution for that federal agency or program?" (2) "Even if there is, is it a program or a function that is best performed by the federal government ... as opposed to state or local government?" (3) "Do the benefits outweigh the cost?"

Waste in government, Barr said, represents a "loss of freedom."

See the rest here:

Update #3: Chelyen Davis has the story in the Free Lance-Star.

Update #4: This is the third and final part of the four-part Bob Barr video, in which the former Congressman says, "I didn't leave the Republican Party, the Republican Party left me."

Asked by a member of the audience whether he is concerned that votes for himself might contribute to a victory in November by Barack Obama, Barr replies:

"Standing up for principle should never be something that any American shies away from or feels guilty about. It would be a sad state of affairs if we ever reached a point in this country where somebody stands up and stands for principle, does the right thing for the right reason, but is criticized because that gets in the way of practical politics.

"In point of fact ... it's not an accurate scenario. The fact of the matter is that individuals who would go to the polling booth on November 4th and vote for a Big-Government Republican, that is, Senator McCain ... it would be very difficult for us to pull them away, even if we were trying to, to vote for a small-government Libertarian.

"The voters on that side of the ideological spectrum, or political spectrum, that we are targeting and tend to reach and, I think, will reach, are not voters that McCain has or is likely to have, but are sort of libertarian or true-conservative Republican voters who would not vote for McCain at any rate. We intend to reach out to them, and I think we'll get an awful lot of them."

Asked about an issue that divides some Libertarian Party members (and other libertarians), Barr responds by saying:

"The Libertarian Party nowadays is a very diverse party, but the one thing that unites virtually all -- not every single, but virtually all -- Libertarians is a strong desire to have a meaningful role in reigniting liberty in America, to really begin the process through a legitimate political party and all the attributes that come with that: paying attention to raising money, paying attention to grassroots organization, selecting good candidates, prioritizing your issues, delivering those issues in language that the average voter can relate to.

"That is very much what the modern Libertarian Party is. There are differences, whether it is on the drug issue, the abortion issue, other issues as well. But I think it's a real sign of maturation of the Libertarian Party that we are able to largely (not entirely, but largely) put aside differences that we have and move forward, particularly in this election year where there is a tremendous opportunity for a party of change, as the Libertarian Party is ... even though our philosophy is not a philosophy of change, it's the core beliefs of our Founding Fathers, and it's a very mainstream message."

Watch the full segment, in which Barr concludes by mentioning the campaign web site, BobBarr2008.com:

Update #5: Hugh Lessig reports on Barr's speech in Richmond in the Daily Press.

Update #6: The Free Lance-Star posted an editorial about Barr's appearance at the Bull & Bear Club on August 14.