McDonnell cuts cocktail tax in ABC privatization plan
September 9, 2010 | Virginia News
RICHMOND, Va. -- Facing a potential deal-killing revolt by fellow Republicans, Gov. Bob McDonnell scaled back a cocktail tax from his proposal to dismantle the state's liquor monopoly -- a move that means the plan would produce less money than promised.
McDonnell, formally rolling out his initiative to get Virginia out of the liquor business after 76 years, replaced the 4 percent levy on mixed drinks with an optional "convenience fee" of 2.5 percent. Restaurants and bars would pay it to buy liquor at wholesale prices rather than picking it up themselves from retailers.
McDonnell envisions the switch to private sales of hard alcohol as a windfall for the cash-thirsty road-and-rail system, generating at least $458 million through the auction of licenses and the sale of properties, such as the state's liquor warehouse in Richmond.
"The whole notion that we should drink more so we can drive more bothers me," said Sen. Mary Margaret Whipple, D-Arlington, head of the Virginia Senate Democratic Caucus.
