Public or private?

Published 1:00 pm Tuesday, January 25, 2011

Whether or not it was the death knell is yet to be seen.

Privatization of the North Carolina ABC system, however, certainly took a huge step backwards last week when Governor Bev Perdue announced her intention to oppose such an idea.

After months of study and deliberation, Governor Perdue told the North Carolina Association of County Commissioners (NCACC) last week that she has come to believe “the juice isn’t worth the squeeze.”

One of those attending that meeting, Hertford County Commissioner Howard J. Hunter III, said he was pleased with the decision made by the governor.

“Under state control, we can control when it is sold, how it is sold,” said Hunter, who serves as Vice President of the NCACC. “Under privatization, we may not be able to do that.”

North Carolina is considering several options to balance a budget that already faces more than a $3 billion shortfall. One of those has been the sale of the ABC system to raise a one-time fee that could help balance the state’s staggering deficit.

According to figures released by the Governor’s Office, however, a one-time sale would have been valued at $300 million. The only way to raise enough money for the sale to be practical (more than $1 billion), the state would have to open liquor sales to a much broader range of retail stores.

“That isn’t North Carolina,” Gov. Perdue insisted. “That isn’t who we are or what we want to become.”

Commissioner Hunter agreed whole-heartedly.

“I agree 100 percent with the Governor,” Hunter said. “If we open up liquor sales to Wal-Mart, Food Lion, Target and those kinds of stores, it will be the worst decision ever made by our state leadership. We’ll end up with a liquor store on every corner. That is not what we want.”

The overall effect would be negative, according to the Governor. She invited the North Carolina General Assembly to sit down with her and review the presentation.

“I invite our Legislative leaders to sit down with me and my staff to hear a presentation from the valuation company to learn firsthand what options are available,” Perdue said. “But, I suspect, they will find what I did: the juice isn’t worth the squeeze.”

The choice made by the Governor was also welcomed by the North Carolina Budget and Tax Center.

“Even without considering the potential social consequences, it would be a mistake to privatize the ABC system based on a small revenue boost in the short-term,” said Alexandra Forter Sirota, director of the Center. “Gov. Perdue is right to think about what’s best for North Carolina in the long run.”

While the Governor did say privatization was not good, Hunter said she brought out several issues with which he agrees.

“She said counties need to fix their (ABC) system; local boards need to develop broader strategies; we need to increase the profitability of the warehouse and to evaluate ABC stores not making money and close them,” Hunter said. “I agree with her on all of those things.”

North Carolina Republicans, however, suggested that the GOP-controlled General Assembly could still look at the possibility of privatization.

“I share Gov. Perdue’s concerns regarding the sustainability of revenue derived from the ABC system,” said Republican Senate leader Phil Berger (Rockingham). “Our state is facing a massive $3.7 billion budget deficit and a nearly 10 percent unemployment rate. Our number one priority must be to balance the budget and foster an environment where the private sector can create jobs.

“I believe that we should continue to look at opportunities for privatizing government functions and continue to consider privatizing the ABC system,” he continued. “However, the decision to privatize should be a carefully considered long term policy decision and not a short term decision based on the state’s budget situation.”