Making whiskey sounds simple.  Get some grain and sugar and start cooking.  In reality, the process is a tad more complicated:  Get the right corn and barley, soak it, get the enzymes working to transform the starch to sugar, add yeast, let ferment, cook the mash, cook the mash again, age in an oak barrel, and so on and so on.  

Just like making whiskey, the reality of the plan to sell Virginia’s ABC stores for one-time revenue influx of $500 million is much more complicated than the simple version – which isn’t really all that “simple”.

In a nutshell the governor’s proposal is this:  close the state’s 330 state-owned ABC stores and the state-owned wholesale business, losing approximately $240 million in annual revenue, then sell 1,000 retail licenses and a limited number of wholesale licenses for one-time $500 million influx, recover the annual revenue loss with a $17.50 per gallon tax but still leaves us in the neighborhood of about $40 million short per year, plus incur additional estimated $36 million by laying off some of the 600+ state ABC employees, and, finally, pay to end current leases on 300+ stores.

Keep in mind, the $500 million from license sales would be put into a leverage fund dedicated specifically to public-private road projects.  To put this in buying power terms, Virginia spent over $200 million for snow removal alone last year.  Another example is the third crossing down in Hampton Roads – it is expected to cost taxpayers $2 to $3 billion.

Selling whiskey is not a core function of government.  But extricating ourselves in the proper manner will shape future core functions.  Presently, the new $17.50 per gallon tax leaves Virginia with $47 million less annually than the present system.  So while the present ABC system is not a core function of government – and is somewhat offensive to the free market - it is funding those core services.  Thus, it helps to keep our Virginia taxes in check.

I believe there are ways that Virginia’s ABC system could be modernized and vastly improved.  The most obvious way would be to get Virginia out of the retail business by having ABC “kiosks” inside grocery stores and convenience stores.  These kiosks would be state-owned and state-controlled but would phase us out of the retail end of the business.

Such an improvement would undoubtedly bring convenience to the Commonwealth’s citizens, consistent revenue for the Commonwealth, and get rid of the least efficient aspects of government run stores.

In short, the governor’s proposal as he put it forth needs a little bit more age and refinement before it’s going to please this legislator’s palate.  We’re not making grape juice after all.