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Statement of Governor Bob McDonnell on Government Reform and ABC Privatization Plan


Location: Richmond, VA

Governor Bob McDonnell issued the following statement today regarding the schedule for the advancement of his government reform proposals.

"Across Virginia, citizens are expressing their desire for state government to be smaller and simpler, more effective and more efficient, more accountable and more transparent. In this tough economy Virginians are making do on less, and our government must do the same. Elected officials must look for every opportunity to reduce government spending, while ensuring that the core functions of government are properly funded and managed.

Over our first nine months in office we have responded and led accordingly. We have rejected attempts by lawmakers to impose new taxes. We closed the historic $4.2 billion shortfall in the current budget by reducing state spending to 2006 levels. We worked with the General Assembly to turn a $1. 8 billion shortfall in the FY 2010 budget into a $403 million surplus by prioritizing spending, instituting a strict hiring freeze, incentivizing state workers to save taxpayer dollars, and enacting other measures. Now, we are focused on fundamentally reforming state government, not for the next budget cycle, but for the next generation.

Core functions of government, like public safety, education, and transportation, must be performed well. There are other functions performed by government, picked up and co-opted over the years, which do not fit that definition. One of those is the selling of liquor. Thirty-two states rightly leave this function to the private sector. Virginia is one of a minority of states that still retains a monopoly on the sale of this legal, commercial product. That is why I have proposed that we eliminate this unnecessary government monopoly and put the proceeds from selling licenses in the free market into the crucial need of transportation.

The privatization of liquor sales in Virginia will provide money for roads without a tax increase, eliminate a government monopoly, and create private sector jobs. That is why a broad and diverse range of business and community groups and individuals are backing this plan. The Northern Virginia Transportation Alliance, Virginia Chamber of Commerce, Fairfax Chamber of Commerce, Virginia Retail Merchants Association, Virginia Fraternal Order of Police, Americans for Prosperity, Virginia Transportation Construction Alliance, Old Dominion Highway Contractors Association, Associated General Contractors of Virginia, Heavy Construction Contractors Association, Virginia Ready-Mixed Concrete Association, Richmond Area Municipal Contractors Association, Virginia Hospitality and Travel Association, Lieutenant Governor Bill Bolling, Attorney General Ken Cuccinelli, former Governor and Senator George Allen and former Governor and Richmond Mayor Doug Wilder have all announced their support. Public opinion surveys show that Virginians support ABC privatization by a wide margin. They know it gets government out of a monopoly and provides new money for transportation.

We will privatize Virginia's ABC stores. The only question is one of timing. I have determined that this proposal would best move forward during the regular General Assembly session.

As Governor, I will not call a Special Session to debate; only to act. Several recent Special Sessions ended without any positive action taken. That is a waste of taxpayer dollars. Most legislators and affected stakeholders have expressed philosophical support for privatization, but want more time to carefully and thoroughly consider our proposal, and offer ideas on how to improve it; in fact many legislators have now begun to approach us with specific ideas and policy suggestions. Some legislators want to wait for a JLARC review of the proposal, while others want to see revised revenue models. I understand all of these considerations and interests. My sole goal is to eliminate an outdated government monopoly and to raise money for transportation. All other details are flexible, as long as the plan makes business sense and is a good deal for the taxpayers.

While I wanted to begin saving taxpayer dollars immediately by enacting at a Special Session the more than 100 ideas already recommended by our Government Reform Commission, I also want to get the ABC privatization proposal right. Now, I will promptly implement many of the recommendations of the Commission administratively, and prepare legislation for January for ABC and the other initiatives.

We will introduce ABC privatization legislation on the first day of the 2011 General Assembly session. We will vigorously advocate for it. It is a common sense initiative. The funding generated by privatization is just one part of our overall plan to bolster transportation infrastructure. Combined with the recent funding identified by our performance and financial audit of VDOT, the bonds we issued this May, new public-private partnerships, and a host of other transportation proposals we will unveil this session, we will get people and business moving again in Virginia. Virginians expect innovative, creative, fiscally sound leadership to provide the needed funding for government's core functions. That is what we will provide.

The conversation on innovative government reform that we have begun is one that will help shape our future prosperity. I believe that government must be made smaller, smarter, more efficient, easier to access and less burdensome. So do most legislators. I do not agree with those who argue that government programs are sacrosanct and can only grow larger, not smaller. In these tough fiscal times, we must be more entrepreneurial. ABC privatization is one step towards this goal. I look forward to seeing our broad government reform proposals enacted when the General Assembly convenes in January."

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