Virginia Retail Merchants Association happy with changes....

 

"The changes announced today to the ABC privatization plan will help our smaller retail members obtain licenses by allowing them to pay over a three to five year period. During these times of tighter credit markets, this change demonstrates a sensitivity to small businesses and will allow them to more fully participate in this process. We also applaud changes that will help retail stores with less than 50 employees compete for licenses on a more level playing field.

VRMA has a long standing position that retailing should be left to retailers. Additionally, as we said in our initial statement of support, ABC stores should be privatized as a matter of principle because there is no compelling policy reason to distinguish sales of distilled spirits from other alcohol products."

Former Gov. Allen backs McDonnell's liquor privatization plan

Former Gov. George Allen weighed in on Gov, Bob McDonnell's effort to privatize liquor stores Thursday with a statement emailed out from the governor's office.

(I'm not sure I understand what the last sentence means - because if you lose money it's hard to have a cost savings.) 

“Most people realize that government has a spending problem, not a revenue problem.

The principle of privatizing the warehousing, distribution and sale of distilled spirits is common sense. It is simply not the function of government to sell beer, wine, bourbon or vodka. If we are to ever to have a chance to limit the size and scope of government, we must take bold steps that the Governor is advancing, consistent with his campaign promise. I support privatization, allowing all businesses that qualify to obtain distilled spirits licenses.

The Governor’s approach of putting cash into transportation projects is innovative and beneficial. This funding of transportation can be accomplished while meeting priority responsibilities in education and law enforcement. As our elected legislators work through the ABC privatization initiative, there is no good reason or need to insert a tax hike in this plan. The taxpayers of the Commonwealth know that the state budget is sufficiently big. Worrying about how much revenue the government can keep from liquor sales is a distraction from the larger cost savings of privatization.”

Paladino and NY Post political reporter get in heated dust up....

The perils of being a political reporter, New York gubernatorial hopeful Carl Paladino took on a New York Post political reporter in a angry confrontation over rumors and smears.

The video is explicit so consider yourself warned.

http://www.cbs6albany.com/news/paladino-1278832-cuomo-dicker.html

UVA's Sabato leans 2nd District toward Rigell....

UVA's Larry Sabato changed his outlook for 21 Congressional races, and every one of them went further red.

That includes the race between U.S. Rep. Glenn Nye,Republican Scott Rigell and Independent Kenny Golden.

Here's what Sabato had to say in the change from a "toss up" to "leans R."

VA-02 (Nye-D): Glenn Nye was one of a hostof Democrats to win a Republican seat in 2008, aided in part by Obama’s coattails, only to find themselves immediately in the GOP cross-hairs. While Obama narrowly carried the district in 2008, Democratic enthusiasm has since plummeted while Republicans have rallied. As a result, Nye’s GOP challenger, used car dealer Scott Rigell, will be running with the wind at his back. Nye has tried to boost his moderate and conservative credentials, voting against health care reform and a handful of other Democratic priorities, but voters may care more about his party affiliation than his voting record. There is a former Republican official, Kenny Golden, running as an Independent but so far he has shown few signs of fundraising or support and seems unlikely to siphon off enough votes from Rigell to make much of a difference. All the polling and news indicates the momentum belongs to Rigell, and the Crystal Ball rating moves from Toss-Up to Leans R.

Beer an wine wholesalers point to problems with McDonnell's ABC plan, higher taxes less revenue....

Virginia's beer and wine wholesalers are stepping up their critiques of Gov. Bob McDonnell's plan to privatize the state liquor system, saying the plan includes a hefty tax increase that unfairly hits low-income drinkers and that the plan will leave the Virginia budget hurting in future years.

The Virginia Wine Wholesalers Association and the Virginia Beer Wholesalers Association have come out against the plan. But these folks most certainly have a stake in the governor's plan to move to a private liquor distribution system, so they brought in a economics professor to run the numbers and see what McDonnell's plan really looks like when it hits the street.

Associate Professor of Economics emeritus Robert W. Cook is the former chair of the University of Richmond economic department and he said that McDonnell's plan will raise retail prices on booze, hit low-income buyer more heavily and also produce a declining source of revenue.

According to the numbers McDonnell's plan would raise liquor taxes 42.5 percent and that means customers would pay as much as 16.5 percent more at the retail level for liquor. Here's the full slideshow. Download Privatization_Presentation_final_9.28.10[1] 

And here's a full county by county mathematical breakdown that shows how the privatization would play out around the state. Download RegressionChart(1)

The basic gist of the numbers is that the new excise tax would fall more heavily on low income counties and low income customers. If you're paying $17.50 a gallon for the cheapest knockoff vodka, is it fair that the guy buying a gallon on Woodford Reserve is paying the same rate - even though the liquor is way more expensive.

Further, the $17.50 excise tax doesn't hold up in the out years, because it'sa flat rate - like the state's 17.5 cent gasoline tax. So as inflation rises and the dollar becomes worth less - the state ends up holding the bag with less money.

McDonnell's team in expected to tweak the plan again this afternoon - so expect to hear some more from the beer and wine folks.

 

Bob Marshall sounds off in the Daily Press on "secret tax increases" in Virginia budget

Virginia Del. Bob Marshall is slamming Virginia's state budget in the Daily Press, warning folks that the surplus is manufactured and that state lawmakers are putting off important and expensive bills.

Marshall is one of the General Assembly's most conservative voices - especially on abortion rights - and he's been the set up man for Attorney General Ken Cuccinelli this year asking the Republican top lawyer legal questions - and basically serving up on conservative causes. Marshall has been after Gov. Bob McDonnell for calling it a "surplus" because of all the financial shuffling.

Now Marshall is sounding off on how state lawmakers filled in some final budget holes but ending tax credits, raising court and traffic fees and putting off payments into the retirement pool.

Richmond's financial "newspeak" now calls debt "thrift" and claims we have a $400 million "budget surplus."

But wait! The General Assembly "borrowed" $620 million from the state employees' retirement systems, omitted a $200 million payment in a self-funded insurance program, put 13 months of sales tax revenue into a 12-month budget, and reduced local government contributions to state retirement for teachers by $182 million! How is there a "surplus" if bills remain unpaid?

A number of "yes" votes on the budget came from lawmakers who had signed "no new tax" pledges. Richmond should not imitate Washington's secretive and deceitful debt and deficit spending practices, which have placed America on the road to financial Hell.

George Orwell (1950) wrote that, "Political language ... is designed to make lies sound truthful." Candor must replace the monetary charade in Richmond and Washington.

 Read Marshall's full critique of Richmond and the state budget here.

ABC privitization on tap in Richmond today, expect tweaks to McDonnell's plan...

A panel of Gov. Bob McDonnell's government reform commission is meeting this afternoon in Richmond to dig into the plan to get Virginia out of the alcohol business, and folks are expecting to see some changes to the governor's proposal.

But it's unclear exactly what the alterations will be.

"I fully expect there to be some modifications," said Del G. Glenn Oder, the Newport News Republican who chairs the committee meeting today. "But I don't know what those are yet."

As a refresher, McDonnell is pushing to follow through on a campaign promise to end the state's monopoly on liquor distribution after 76-years. The move is especially tricky because of the millions in taxes and profit that the state makes on the 332 state-run liquor stores - which bring in about $260 million a year.

McDonnell's staffers unveiled the plan a few weeks ago that would sell off 1,000 licenses to various levels of stores - big box and grocery, beer and liquor specialty shops, and smaller convenience and pharmacy outlets.

Under the plan the state would drop an excise tax on liquor and slap a new $17.50 a gallon tax on liquor stores and also ask bars and restaurants if they want to pay a optional 2.5 percent fee to deal directly with wholesalers to get delivery and bulk discounts.

There are big questions about the gallon tax, because it would hit different brands and levels of liquor equally, meaning that if you're buying the cheapest vodka or the most expensive scotch - you're paying the very same amount. And there are also fiscal questions about dumping a growing source of revenue, for one that will automatically shrink with inflation.

McDonnell's plan hasn't exactly gotten rave reviews - he's picked up some support from retailers, the fraternal order of police and even the Jerry Falwell Jr. But others have slammed the proposal for leaving the state with less revenue and also tripling the amount of outlets selling hard liquor. Even Grover Norquist weighed in, saying that the plan doesn't break the no tax pledge.

And the folks who really have to chew on the plan - state lawmakers - haven't been very impressed.

So we're hearing that McDonnell is going to drop the 2.5 percent optional fee and also make some other changes to the plan . Presumably he's going to bring in more revenue to make up for the money lost when that fee goes away.

But McDonnell's got a lot of work to do if he still plans to call lawmakers back to Richmond for a special session in November.

"It's a very fluid situation," Oder said. "It still has to turn into a legislative proposal."       

Nye slams Joint Forces Command move...

Here's some of U.S. Rep. Glenn Nye questioning the Pentagon decision to close Joint Forces Command.

Again, Daily Press military reporter Hugh Lessig is in Washington covering the events so look for more coverage in tomorrow's Daily Press.

The hearing came just 24 hours after Nye, Governor McDonnell and the Hampton Roads Congressional Delegation met privately with Deputy Defense Secretary William Lynn III and General James Cartwright at the Pentagon to discuss the very same issue, again receiving no substantive explanations or rationale regarding the proposal.

Today's hearing, however, made considerable progress in two areas. During Nye's questioning, Dep. Sec. Lynn committed to soliciting Congressional input by arranging a meeting between Nye and other Members and Secretary Gates before the implementation of any plan for JFCOM. Additionally, Gen. Cartwright, the only active servicemember testifying today, went to considerable lengths to acknowledge that all options regarding JFCOM's future remain on the table, including maintaining the status quo, saying “When we look at the full range of courses of action, status quo is an option,” and "I do not feel because the Secretary set an objective of eliminating Joint Forces Command that that option [status quo] is removed from us for consideration”

In addition, Deputy Secretary of Defense Lynn made the commitment to setup a face to face meeting between Nye and HASC members before any plans to disestablish JFCOM were implemented.

Since Secretary Gates' announcement early last month, Nye, Governor McDonnell, and the Hampton Roads Congressional Delegation have repeatedly asked for analyses regarding the proposal -- including specific cost-savings, and assurances that no detriment to military jointness will occur should the elimination of JFCOM take place. Thus far, no answers have been provided.

Chairman Skelton also voiced his disappointment with the Defense Department's lack of due diligence, and reiterated his commitment to maintaining the military installation's joint functions.

"The opposition voiced by Chairman Skelton and Ranking Member McKeon and other members of the Committee gives added strength to our fight" Nye said. "And I look forward continuing to work closely with the Chairman and the Ranking Member to block this botched plan.  Not a single person from the Pentagon can explain exactly how and why this proposal was made, we will continue to demand answers and push to keep JFCOM open.  It is too important to our national security and too important to our local economies to do anything but work together and fight."

Wittman blast DoD on Joint Forces Command closing...

Here's U.S. Rep. Rob Wittman questioning the logic behind the closing of Joint Forces Command, and what follows is a takeout from his folks in Washington.

For more coverage read Hugh Lessig's reports from Washington.

 After continual pressure for seven weeks by the Virginia delegation, including a meeting yesterday at the Pentagon, DoD’s failure to provide any information to the Members or to the public continues.

DoD officials appearing before the Committee today included William J. Lynn III, Deputy Secretary of Defense, Ashton Carter, Under Secretary of Defense for Acquisition, Technology and Logistics and General James E. Cartwright, USMC, Vice Chairman of the Joint Chiefs of Staff.

“The continued failure to provide any substantive, thoughtful analysis on a decision of this magnitude is disturbing,” Wittman said. “After yesterday’s disappointment from our meeting at the Pentagon, today’s discussion continued the trend of the tremendous lack of transparency from DoD on this ‘efficiency initiative.’”

When asked by Congressman Wittman to describe any precedent for a decision at DoD where the decision was made and announced without full analysis, including cost savings and a completed implementation plan, Secretary Lynn failed to provide any circumstances where this has previously occurred.

Wittman continued, “The security of this nation should not rely upon an approach that puts the cart before the horse. This calls into question the process at the Pentagon by which national security decisions are made. I will continue to press the Pentagon for answers, not only for Virginians directly affected by this decision, but for all Americans, for the lack of foresight, transparency and accountability by this Administration. Decision-makers and leaders in this country must be held to a higher standard, especially when the security of this country is at the heart of the issue.”

McDonnell on Virginia's most noteworthy accomplishments ... in 2050

Gov. Bob McDonnell will be in Washington next Tuesday to be the keynote speaker at a daylong symposium called The Future of the South, sponsored by The Oxford American (a truly wonderful magazine, if you're not familiar with it).

The daylong symposium, to be held at the National Archives, features an array of authors who will talk about the South's land and environment, its culture and identity, and the future of the Gulf Coast in the wake of the BP oil spill.

They'll take a long-term view ... trying to predict the future 40 years out, in 2050.

To set the tone, and pique your interest, the magazine released interviews with a handful of Southern governors, including McDonnell, asking them questions about their states in 2050. Here's a snippet from McDonnell's interview:

THE OXFORD AMERICAN: What could be your state's most outstanding accomplishment by 2050?

 GOV. BOB MCDONNELL: I don't want to limit the Commonwealth of Virginia to just one accomplishment. To do so would not be in keeping with our legacy as the home of Washington, Jefferson, Henry, Maggie Walker, Booker T. Washington, American Independence, Yorktown, Appomattox, Tom Wolfe and the world's best ham and peanuts! In 2050, I want Virginia to have the lowest unemployment rate in the country, an active and thriving commercial spaceport at Wallops Island on our Eastern Shore, globally recognized film and wine industries, the best public education system in the world with opportunities for all our young people, and a vibrant tourism industry. I want to see a Virginia that is the home of the United States military, the global leader in energy and technology, and the site of the largest and most efficient port in the country. In short, I want the Virginia of 2050 to still be notable for our past, but even more noteworthy for our present and future.

Here's the full text of the governor's 2050 interview. (Love that portrait?)

Here's more information on the symposium, which is free and open to the public.