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By Sean Gorman September 26, 2011

Plenty of proposals to get state out of liquor business

Bob McDonnell has long argued Virginia's government should get out of the liquor business.

On the gubernatorial campaign trail in 2009, McDonnell said the sale of distilled spirits was "best handled by the free enterprise system,” noting the Old Dominion was one of only 18 states that didn't allow the private retail sale of liquor.

"Bob McDonnell will propose legislation to privatize ABC (Alcohol Beverage Control) operation and use revenue generated for transportation with most of the money going to maintenance,” McDonnell's campaign promised in a July 21, 2009, news release.

McDonnell became governor in January 2010 and quickly began meeting began discussions with executives, lobbyists and trade groups on how to end Virginia's roughly 75-year monopoly on booze.

That September, he proposed privatizing liquor store operations and the wholesaling of alcohol. McDonnell offered a plan to close 332 state run ABC stores and auction 1,000 liquor licenses. He estimated that bidding on retail and wholesale licenses as well as the sale of ABC real estate would net at least $459 million for Virginia.

A variety of business groups, construction organizations and former elected officials supported ABC privatization. The plan was opposed by some religious groups and beer and wine wholesalers.

McDonnell's efforts ran into stiff bipartisan opposition from legislators last fall. Some critics objected to a 2.5 percent tax on alcoholic beverages sold at restaurants and bars. McDonnell dropped the tax and created a new problem: without the levy, the state would lose $47 million a year by privatizing liquor stores.

The governor decided not to call a special General Assembly session in November 2010 to consider his ABC proposal.  But that didn't mean he'd given up on his plan to privatizing liquor sales.

"We will privatize Virginia's ABC stores. The only question is one of timing,” McDonnell said in an October 22, 2010, news release. "I have determined that this proposal would best move forward during the regular General Assembly session (in 2011).”

Early this year, McDonnell pushed for legislation privatizing liquor store sales, but not wholesale liquor sale operations. The bills again faced deep opposition and were not brought up for a vote in House or Senate committees.

But that may not be the end of the story. In a June 30, 2011, interview with WRVA radio, McDonnell said he will continue pushing for privatizing state liquor stores in the 2012 General Assembly.

McDonnell's efforts to privatize the state liquor sales have been repeatedly thwarted, but that's not from a lack of trying. He's certainly followed through on his pledge to propose legislation to privatize the system.

We rate that as a Promise Kept.

Our Sources

McDonnell for Governor,"McDonnell unveils comprehensive statewide transportation plan,” July 21, 2009.

Joint Legislative Audit and Review Commission, "Review of the proposal to privatize Virginia"s ABC system,”November 22, 2009.

Governor Robert McDonnell, "Statement of Governor McDonnell on government reform and ABC privatization plan,”October 22, 2010.

E-mail from Jeff Caldwell, spokesman for Governor Bob McDonnell, Sept. 20, 2011.

Governor Bob McDonnell, "Virginia Chamber of Commerce endorses ABC privatization,”October 4, 2011.

Governor Bob McDonnell, "Statement of Doug Wilder on ABC privatization,” October 1, 2010.

Governor Bob McDonnell, "Virginia construction industry backs privatization plan,” September 16, 2010.

Governor Bob McDonnell, "Northern Virginia transportation alliance backs ABC privatization as part of comprehensive transportation solution,” August 30, 2010.

Richmond Times-Dispatch, "Faces of 2010: Gov. McDonnell plans a bolder second year,” December 26, 2010.

Richmond Times-Dispatch, "McDonnell pulls back on ABC privatization plans,” October 23, 2010.

Richmond Times-Dispatch, "McDonnell still hopes to sell state liquor stores,” July 2, 2011.

Richmond Times-Dispatch, "Why this year"s General Assembly session mattered,” February 27, 2011.

Richmond Times-Dispatch, "General Assembly session reaches middle point,” February 9, 2011.

Richmond Times-Dispatch, "Democrat files ABC bill in House,” January 21, 2011.

Washington Post,"Some Republicans skeptical of McDonnell"s ABC privatization plan,” August 10, 2010.

Washington Post, "McDonnell"s commission backs his ABC privatization plan,” October 4, 2010.

Washington Post, "To woo more support, McDonnell alters liquor privatization plan,” September 30, 2010.

Richmond Times-Dispatch, "Critics see more problems with ABC privatization,” September 19, 2010.

Richmond Times-Dispatch, "Governor reveals ABC plan,” January 11, 2011.

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