Virginia Tomorrow

Last week it was the $1.2 billion uncollected taxes owed to the state.   Yesterday it was Senator Obenshain’s call for the privatization of ABC Stores.

Six years after it issued its final report , the Wilder Commission (officially the Commission on Efficiciency and Effectiveness in Virginia State Government ), is making a comeback as legislators look for efficiencies that do not impact the core services of Virginia State Government.

I noted in a previous post that I had the privilege of serving as the Executive Director of the Commission. Appointed by Governor Warner, the Commission brought together business leaders such as Nigel Morris, Dubby Wynne, Paul Hirschbiel and Olivia Garland with legislators such as Walter Stosch, the late Hunter Andrews, and Michelle McQuigg.  Chaired by former Governor Wilder, it engaged in an exhaustive, occasionally contentious, but ultimately(at least from my own admittedly biased perspective)  frutiful inquiry into the business practices and organization of Virginia state government.

Senator Mark Obenshain has reframed an issue raised by the Commission and wants the state out of liquor sales and wine wholesaling. On the face of it, this seems to be an easy issue to think through.

Is selling liquor and wine a core service of Virginia state government? And if it is not a core service, shouldn’t the Commonwealth simply get out of the business?

Could the answers be anything but “yes” and “yes?”

You’d be surprised.

In the first place, advocates of the current approach contend that the state actually makes a profit on liquor sales and privatization would result in a $100 million hole in the state budget. Not everyone agrees with the accounting procedures that arrive at the $100 million figure. But Senator Obenshain will have to counter the argument that his proposal will increase the state’s budget shortfall.

In addition to the argument that the state should hold onto a profit center, the prospect of private liquor sales puts into play one of the more fascinating yet peculiar features of political life- The Strange Bedfellows Phenomenon. This occurs when an issue brings together for a short period groups that are normally mortal opponents and that plan to resume screaming at one another as soon as they’ve disposed on the matter at hand.

Here’s how it happens on ABC privatization.

The state probably could probably privatize liquor stores, sell licenses to private sector companies that want to get into the business and actually make a profit.

But to do so the state would probably have to limit the restrictions that it might put on advertising and days/hours of sale on large companies such as WalMart and hundreds of smaller entities that would be very interested in having  liquor franchises. Otherwise, the franchises are less valuable.

There’s the rub.

Many social conservatives and many liberal activists oppose privatized liquor sales on the grounds that it will encourage more people to drink, put more drunk drivers on the road, and impose greater strains on families in Virginia.

They would tell you that the system now works relatively well, providing access to those who want to drink while restricting gratuitous encouragement of a destructive illness. If it’s not broke they say, don’t fix it.

Why would Virginia want to look like Maryland or D.C.?

The coalition of social conservatives,  liberal moralists and the interests that benefit from the current system have been very successful at deflecting efforts to promote privatization.

I am certain that many members of the Commission would applaud Senator Obenshain’s initiative. And they’ll be interested in seeing whether the idea can get any more traction in 2009 than it did when they considered it.