THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, January 2, 1996 TAG: 9512300002
SECTION: FRONT PAGE: A10 EDITION: FINAL
TYPE: Editorial
LENGTH: Medium: 54 lines
Gov. George F. Allen proposes in his two-year (1996-98) $34.6 billion budget that the state sell the Virginia Alcoholic Beverage Control Board warehouse and administration building in Richmond. He believes the state would profit from getting out of the distilled-spirits-and-wine warehouse business.
Sounds sensible on its face. Nonetheless, the 1996 General Assembly, which will convene within days, should examine the proposal carefully.
Computers and swift delivery of products probably make the state's warehousing of booze unnecessary. Retailers can now maintain low inventories because they can quickly get from manufacturers and wholesalers the products they want in the quantities they expect to sell.
Besides, a few years ago the legislature decreed that the ABC stores carry no wines but Virginia's. That shrank demand upon the warehouse. Falling consumption of distilled spirits has shrunk it further.
So there remains scant justification for storing alcoholic beverages in a central state warehouse staffed by state employees.
Cutting inessential costs to better support essential governmental missions is as imperative for government as for business - as governments learned in the most-recent economic recession. The Allen administration says the 229,000-square-foot warehouse and administration building might fetch $30 million. Buying warehousing and delivery services from the private sector might yield short-term and long-term savings for the state.
And might not. That's one rationale for General Assembly scrutiny of the proposal.
Privitization of some governmental functions can be a good move. But not always. The federal government has experimented with private prisons. The results, still coming in, are mixed and savings are elusive. The Allen administration suggested savings could be had at the state-owned marine terminals by privitizing their security force. The Virginia Port Authority feared any savings would come at the expense of tight security that prevents theft of general cargo from passing through its terminals in Norfolk, Portsmouth and Newport News.
There's another reason for the General Assembly to consider thoughtfully any privatization of the ABC warehouse: Virginians are comfortable with the ABC system and unsympathetic to proposals to privatize packaged-liquor sales. Would ending the state's already declining warehouse operation push the state toward private liquor stores? The Allen administration says not, and we think not. But the issue is politically sensitive. Lawmakers will want to handle it with care. by CNB