I was always proud of the Roanoke Times editorial staff. Well, for the occasional brief moment anyway, when the members thereof would run an opinion piece on the virtues of privatizing Virginia's government liquor business.
A while back, when a Democrat ran the Commonwealth:
Privatization makes sense for a host of reasons, not least because hawking hooch is about as far from a core government service as the state can get.But now that Bob McDonnell is in charge, and the opportunity to privatize the liquor business is coming close to being a reality, there's a different tune being sung:
The state-run stores came out of temperance movements that still held sway at the end of Prohibition, not out of public need. Most other states allow private sales.
Were Virginia to privatize, it would benefit consumers. Independent shops would compete for customers on price, service and quality.
Private stores could hold sales, advertise, seek deals from distributors and respond to marketplace needs more nimbly than a state-run operation.
They could also be more convenient in location, number and hours of operation. Some regulation would still be needed, but far less than what exists now.
"But ... but ... but ..." They're not against the idea. They (now) simply see so many obstacles ...
McDonnell says the commonwealth would realize the same amount of revenue that it already does from its excise tax and wholesale markup, but neither he nor his privatization work study group has provided details.
It's all rather fuzzy -- just a vague assurance that the taxes and markup currently received would be replaced by some mechanism.
As a side note, to prove that these knuckleheads haven't the first clue when it comes to how business works, check out this quote from the same editorial:
Neighboring Maryland and the District of Columbia, which have private liquor sales, realized just $24.7 million and $10.8 million, respectively, last year in sales and excise taxes compared to Virginia's $249 million in tax and profits.Okay, maybe they'll blame the Washington Post. But what's escaping these ... professional typists ... is this:
The problem is illustrated nicely by a $25 bottle of Jack Daniels. Currently, about $13 of that retail price ends up in Virginia's coffers, a combination of profit earned and taxes charged, The Washington Post reported.
There's gross revenue and there's net revenue. $13 of that $25 rung up in the cash register at our hypothetical state liquor store does indeed end up in "Virginia's coffers." (with the other $12 going to Ol' Jack.) But from that $13 in gross sales, we must then deduct operating expenses. After we deduct what the state paid Jack Daniels for the brew. The "cost of goods", as we say. What does it take for the government to operate those low-volume liquor stores? I don't know (nor does anyone else, I'd bet - it's government we're talking about), but if we're to use the government-run Post Office model, that $13 in gross revenue becomes a minus $3 in net "profit" after salaries, maintenance and repairs, trash removal, janitorial service, pest control, lawn care, advertising, office expenses, supplies, utilities such as telephone and electricity, insurance, property management, and sundry accruals are deducted.
Poof. That 13 bucks vanishes. Welcome to my world.
Take a business class, fellas. And get back with us on that analogy.