DURHAM -- Gov. Bev Perdue's opposition to private retailers selling liquor in the state doesn't derail efforts to privatize alcohol sales, but it pushes debate of the issue to the state legislature.
Loosening government control of liquor sales would raise about $300 million, Perdue said Thursday, not enough of a one-time infusion to make it worth changing a system she said largely works well.
Faced with a budget shortfall and some embarrassing episodes involving local Alcohol Beverage Control boards, Perdue commissioned a study to find out how much the state could get for the system. Other states have ended control over alcohol sales, and more are considering such a move as a way to raise new revenue.
Critics of this state's alcohol control system, which is a remnant of the post-Prohibition years, say it hurts consumers by inflating prices and limiting choices. The system now gives the state oversight of the warehouse that distributes liquor to retail stores operated by local government boards. Liquor sales generated about $275 million in state and local tax revenue last year.
Perdue plans to talk to new Republican legislative leaders about the report's findings, and they said they want to see the numbers.
"Privatizing the ABC system will be considered as part of our broader analysis of the scope of government as we look for opportunities to solve the budget crisis," House Speaker-designate Thom Tillis of Mecklenburg County said in a statement. "We will begin with the analysis the governor's staff has completed, and we will complete our own assessment as we identify areas we may privatize."
Perdue, speaking to a supportive group of local officials at an N.C. Association of County Commissioners conference on Thursday, said she narrowed her consideration to options that would ensure the stream of local and state tax revenue, that would continue state regulation, and that would allow local governments to be a part of the retail system.
"The only way to get to big money is to open North Carolina to liquor sales all over the state," Perdue said.
"I simply don't want to be the governor, I really don't, who puts liquor into the big Target, Walmart store or the local convenience store," she said.
The least-restrictive privatization option would raise a little more than $1 billion, she said.
Perdue said she would work with legislative leaders if they decided to privatize the system, "but I do not support this."
Perdue made her decision against a backdrop of a large coalition arrayed against privatization and few organized voices in favor of it.
Local officials opposed
The N.C. Association of County Commissioners and the N.C. League of Municipalities both opposed privatization for fear of losing tax revenue.
The Association of ABC Boards has been waging a public fight against privatization for weeks. The local boards employ 2,000 people and have 600 community leaders across the state.
Also weighing in against the measure were religious conservatives, led by the Christian Action League.
"There is no organized lobby in Raleigh for customers for policies that would improve service and reduce the price of liquor," John Hood, president of the John Locke Foundation, said.
"On one side you had a whole list of interest groups and government entities and social conservatives," Hood said. "On the other side, you had some potential vendors and the interests of North Carolina customers."
In other states, such as the state of Washington, big retailers, such as Costco, have weighed in for privatization. But there was little evidence that such companies lobbied here.
In Virginia, the beer wholesalers and wine distributors have been fighting efforts by Virginia Gov. Bob McDonnell to privatize liquor sales, seeing it as competition for grocery store shelves.
1 of 4 monopoly states
North Carolina is one of 19 so-called control states when it comes to the sale and distribution of alcohol.
But North Carolina is one of only four states with a total monopoly over liquor sales. The others are Alabama, Virginia and Pennsylvania. There are efforts underway in the latter two states to change the law.
Legislators will keep privatization alive, said Sen. Bob Rucho of Mecklenburg County, an incoming Senate Finance Committee co-chairman. But the issue has lost its immediacy, he said, because Perdue won't be including any system sales revenue in her budget and lawmakers don't want to shift their focus away from budget writing and redistricting.
"We'll use the governor's report as a starting point, but this isn't our No. 1 priority," he said.
