Why Perdue Took a Pass on ABC Plan
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Raleigh
In the end, Gov. Bev Perdue decided it was too risky.
For months, the Perdue administration had been studying privatizing North Carolina's government-controlled system of liquor sales.
But after all that calculating and consulting, Perdue announced that she didn't believe going private amounted to such a good business decision after all.
Her consultant told her that the system could bring $313 million for a 30-year license for private companies to run the state-owned warehouse and local liquor package stores. That one-time money seems small considering that the current system generates a little over $200 million annually for state and local government.
That revenue stream wouldn't completely dry up under a system of private liquor sales. State and local government would continue collecting taxes on liquor sales. Those tax collections might even increase if private companies were running the liquor business.
Here's the catch: They'd increase only if liquor sales increased.
Making a pitch based on increased liquor sales is risky, all right - politically risky.
In her public pronouncement, Perdue emphasized the numbers, talked up the business implications.
But over the past several months, she had heard from the religious right and social conservatives, led by the N.C. Family Policy Council and the Christian Action League. Those groups made clear that they don't want to see changes that increase alcohol consumption or increase underage drinking.
Perdue may not have wanted to become the subject of Sunday sermons. She acknowledged that she didn't want to become known as the governor who put liquor on Walmart and convenience store shelves.
Of course, beer and wine are already there. And arguments about looser control aren't so persuasive when you have a uniform drinking age of 21, as North Carolina has had for more than two decades, and strict laws on underage sales appear to be strictly enforced.
Funny, too, how conservative talk of smaller government and less government regulation sounds good as long as it comes in the form of vague political rhetoric.
Privatizing liquor sales offered the state a rare chance to make government smaller. Looks like conservatives, moderates and liberals may take a pass.
As they do, it's worth remembering how we got here.
Too many local ABC boards and their employees have been in the news for all the wrong reasons. Some have become local fiefdoms of corruption, an easy avenue for easy money or perks at taxpayers' expense.
Other local boards have engaged in nonsensical turf wars, leading to stupid business decisions that have driven down profits and even led to losses.
Running government like a business isn't always the answer, especially when "consumers" are in fact captive users of difficult-to-provide goods and services.
That's not the case here. Managing liquor sales with an eye toward profits and the bottom line would have done a lot to drive out the corruption, the cronyism, the poor business decisions.
Politics, though, is a lot more complicated than business.
Scott Mooneyham writes for Capitol Press Association in Raleigh. Contact him at smooneyh@ncinsider.com.
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Comments
Darkwing 2 years, 3 months ago
I'd never even heard of government-run liquor stores before moving here. As the Soviet Union showed, State-run stores don't work, and the state should not be in business as a purveyor of goods. That's what we have a private sector for. Asinine, simply asinine.
babiehop 2 years, 3 months ago
Whether or not you think the government should be a purveyor of goods, you should't jump to the conclusion that state-run stores don't work because of something in the USSR, or even in other counties within North Carolina. The integrity with which the Moore County ABC Board runs and operates should be an example to government and private business alike. Disagree with how things are done in NC if you want, but don't snub the idea because you haven't considered that it can actually work when in good hands.
Darkwing 2 years, 3 months ago
Integrity? We ARE talking public officials here, with government-scale salaries here, not retail-wage. I just read about ethically-questionable parties for board members put on by the liquor industry and a survey showing that over a third of outlets didn't check ID to prevent underage purchasing. Not that a drinking age is a good idea or enforceable - I remember standing around outside liquor stores to find straw purchasers lo, these many years ago.
babiehop 2 years, 3 months ago
Yes, I realize we're talking about government employees, but what you've read about regarding exhorbitant salaries and board members at industry sponsored parties does not apply to this county. Check into it for yourself, you should be pleased to know things here reflect a much better job being done than those you point out. http://www.thepilot.com/news/2010/jan... True, corruption is rampant in government, I'll give you that, but is also present in the private sector. Remember the interstate project that was botched by a private company contracted by the state ? Just something to think about.
OldSpook 2 years, 3 months ago
Regrettably, Gov Perdue again appears, at least in my mind, to be a very weak leader regarding controversial issues. First she is afraid to take an offical stance against illegal immigrants’ stating "It is a federal, not a state issue." and now is afraid to privatize the State controlled liquor stores.
Fortunately, Gov Perdue is business friendly and has brought in some new high tech companies. With her continued proficiency, she should continue to incentivize North Carolina as a tech friendly business environment.
Steve 2 years, 3 months ago
Goverment should not be in any business that private sector could do!
JAP 2 years, 3 months ago
Darkwing,
"State run stores don't work".....hmm, lets see......When I want a bottle of liquor, I know where to go to get it. And those stores bring in over $200 million annually. So what about that system doesn't work?
JAP
GeorgiaMan 2 years, 3 months ago
To JAP
1)the State would receive a 300 million dollar windfall from the sale of the system.
2) all taxes that are currently being collected by the ABC stores would still be flowing to the state - if you want to raise more money to cover the loss of profits raise the stupid tax 3) all money being currently spent by the ABC sytem to run itself would go away (comes out of the profits from the system) 4) collect business license fees on an annual basis from private owners - say $10,000 a year 5) no more ABC bull
Darkwing 2 years, 3 months ago
And when I want liquor anywhere else, I can get it with my groceries, with my miscellaneous shopping, or a wide variety of other outlets, not just in certain locations. That money still gets spent, regardless of location, so the $200 million won't go away.
I rarely drink, so if I have to go out of my way, I won't be contributing to those sales. How many folks like me will be more likely to buy a little now and then that they haven't bothered with in the past?
bigD 2 years, 3 months ago
The government’s job is to provide public goods. This means the good must be non-rival and non-exclusive. The sale of alcohol does not meet the criteria of a public good. Therefore, the government should regulate the sale of alcohol but not participate in the sale of this good.
babiehop 2 years, 3 months ago
Went to the pub, took a lick, it was guud. ;p
Mark106 2 years, 3 months ago
Privatize it and you make more money by not having to pay salaries, retirements, medical. Now you create non-government jobs while cutting your budget! No-Brainer!
blueskys 2 years, 3 months ago
I get so sick of seeing people comment on things that they don't have the facts on. Not only on this issue but many issues.
Facts: ABC employees are NOT State employees, do not get paid by the government and do NOT receive State benefits. As a matter of fact - they get LESS benefits. The majority also receive average pay. Some even below average wages. The State does not have one dime invested in the ABC system - it is SELF FUNDED and operates on the money made by selling a product.
ABC gives away its net- profits to the County, the Towns, Law Enforcement, and Alcohol Rehab organiz. NO private business would ever do that. Taxes would have to be so high to reimburse what the Local Gov'ts get annually from ABC - that people wouldn't be able to afford a bottle. People that believe NC should be private - don't know or don't want to know the facts (or are just plain ignorant). NC ABC is a free cash cow for the Local Governments - helping to make their budgets and saving you possible higher taxes.
The media doesn't make it any better by providing only bad reflections of a handful of idiots within the system. The majority are hardworking, ethical, trying to make a living like you individual.
BAD NEW SELLS - GOOD NEWS DOESN'T - and I'm sick of it!!
bigD 2 years, 3 months ago
Under your arguments there are lots of services the government could provide and use the net profits for the common good.
In economics we call this "crowding out".
In a capitalist society the goverments must be careful not to crowd out private investment and to only provide public good type products and services to the economy.
Examples of public goods include national defense, public safety and education. But not the sale of hard alcohol!
GeorgiaMan 2 years, 3 months ago
The employees may not be directly employed by the State, but they have the jobs due to the State. If you are not making enough money - QUIT, don't like the benefits - QUIT. Net profits = gross minus the expenses. If you want to curb drinking raise the taxes. Look at Cigarettes - smoking is down,
listenup 2 years, 3 months ago
<p>@blueskys...people are talking about the folks that run the local ABC boards, not the store employees. From WRAL.com:"North Carolina is the only state that runs a liquor control system that leaves locally appointed boards to operate retail stores. The system has led to some embarrassing situations recently, including high-priced meals for local ABC officials that were paid for by liquor companies and high salaries of a father and son who ran New Hanover County's liquor stores."
That kind of corruption is what has folks upset. Also the fact that the state has a monopoly on sales, limiting availability and variety.
blueskys 2 years, 3 months ago
blah, blah, blah - again- harping on the same ole same ole of a handful of incompetents which you will find in ANY system that is Gov't or Private. You can't judge a whole system by a few people. Again - the MAJORITY are upstanding people and the System itself is unlike any other State Control System. NC works and is a good thing. So what you are saying is the Local Gov't that appoint these people are corrupt. So why aren't we PRIVATIZING the Local Govern't's if that's where the problem is??? Use your head, it's idiotic.
GeorgiaMan 2 years, 3 months ago
I like the way you think. How much money could be saved if more services were private instead of governmnet controlled. Government is the only place where you can have 100 different counties - offering the same services, thinking they do it the best and say it is all for the Public good. More private services is better than more Government
listenup 2 years, 3 months ago
I could care less either way about the corruption. As you say it happens at all levels of state/national government, but would much rather be able to buy liquor in the grocery store, at any hour, than have to find an ABC outlet.
It is an outdated and backwards arrangement, as silly as not being able to buy it on Sunday. If I am an adult over 21 why can't I purchase it on Sunday? Crazy backwards old time bible belt nonsense.
I just want to be able to buy it in a regular store like 99% of the rest of this country. I could never figure out why there is this needless separation between beer & wine, and liquor. Over use of any of these has the exact same effect, so why is beer and wine OK for the grocery store, and not Vodka? Bev Purdue said on TV that she did not want her kids to see liquor in the grocery store...WHAT A HORROR!!! But a case of beer is OK? Seriously, NC...move into reality and leave the 19th century morals behind.
It is not the job of the state to keep alcohol away from you if you choose not to use it, it is yours. And it is parents responsibility to teach your kids to either abstain from it's use or to use it with care and responsibility as well.
Mark106 2 years, 3 months ago
Alabama, Idaho, New Hampshire, Oregon, North Carolina, Pennsylvania, Virginia, Washington, and Utah are the only states that run their "Liquor"business. That's 9 out of 50! I guess NC is right and the other 41 don't know what they are doing.