PERSPECTIVE: George Washington would drink to it

Historians of liquor sales in Virginia may remember what many don’t know: That the Father of our Country was in the liquor business. By the late 18th century, George Washington was the owner of the largest distillery in the United States, with more retail sales than any other distiller.

So, what would George say today about Gov. Bob McDonnell’s proposal to end the commonwealth’s monopoly on liquor sales? Doubtless, he’d say it would be a good idea. The naysayers think otherwise. Chief among them are religious organizations that think unloading the state’s liquor stores will lead to a proliferation of more outlets and therefore more alcohol consumption and more human misery.

A look at history, however, shows Virginia has, like other states, successfully exerted controls and collected taxes on the manufacture and sales of alcoholic beverages since Washington’s day — without the overhead of being in the liquor business.

For example, in 1792, the legislature required any retailer to have a license, plus post a hefty (for that time) $150 bond. Penalty for selling without a license was $30 for the first offense and six months in jail for the second offense. By 1840, the state was adding taxes to ordinaries of $18 a year plus 7 percent of the value of any annual sales above $200. By 1877, the state came up with a new breakthrough approach to raising revenue: Tax liquor by the drink.

More modifications to state laws on licensing and taxation came and went until the Prohibition era, but the point is, Virginia has a long history of enthusiastic control and taxation of private businesses selling liquor.

The state Alcoholic Beverage Control Board was a monopoly born at Prohibition’s end, with the temperance spirit lingering in the commonwealth’s air. The ABC board last year celebrated its 75th anniversary, and continues its paradoxical promotion of sales vs. moderation.

Studies show there’s no significant statistical difference in alcohol abuse in states that license and tax private businesses to sell alcohol, according to the Reason Foundation. The real bottom line is money.

ABC stores are generating roughly $100 million in profits annually. The state would be exchanging a slice of that revenue, after new liquor and license taxes, for an estimated half-billion windfall over a couple of years for unwinding its ownership of the state monopoly on liquor sales. Gov. McDonnell’s proposal would take that $500 million and invest it in desperately needed infrastructure. Meanwhile, the consumer who’s in the market for liquor would benefit by privatization, with more stores and more choices. George Washington would drink to that.