Virginia officials are weighing options ranging from partnerships to profit-sharing for Gov. Bob McDonnell's highly touted plan to privatize the state's liquor stores -- with a plan to auction retail licenses getting particular support.
Models for the governor's plan -- a central tenet of his 2009 gubernatorial campaign -- include four options:
» In the first, the Virginia Department of Alcoholic Beverage Control would continue to control operation of spirit sales, but private retailers would receive a profit share and act as agents of the state to sell liquor.
» The second would allow a private company or partnership to purchase the commission's assets and revenue stream and operate the system under a long-term lease.
» The third option would privatize the wholesale and retail side of the ABC, allow liquor licensees to sell spirits off-site, and significantly increase distilled spirit retail outlets statewide. There are currently 332 outlets in the state.
» The fourth is similar to the full privatization model, but would auction retail licenses to the highest bidder and limit the number of licenses to somewhere between 400 and 1,000.
» The fourth is similar to the full privatization model, but would auction retail licenses to the highest bidder and limit the number of licenses to somewhere between 400 and 1,000.
The latter two options would generate an estimated upfront windfall of $300 million to $500 million and an estimated $240 million annually, according to the governor's office.
Eric Finkbeiner, McDonnell's top policy adviser, said Tuesday the fourth proposal "seems to get a few more head nods" than the others, according to McDonnell spokeswoman Stacey Johnson.
But Johnson added that nothing has been decided: "I would say all four are definite possibilities."
The plan must generate more annual revenue than the state brings in from alcohol sales to win his support, said Del. Dave Albo, R-Fairfax. Last year, the state generated about $220 million.
"I would like to see something the business community is happy with," he added.
But Del. Kenny Alexander, D-Norfolk, chairman of Virginia's Legislative Black Caucus, said that though the state may see an initial windfall from privatizing the liquor stores, it needs more than a "one-time pop" for its transportation needs.
"You need a dedicated source of revenue that's sustainable," he said.