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McDonnell alters liquor-sale proposal

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By Rosalind S. Helderman
Friday, October 1, 2010

RICHMOND - Virginia Gov. Robert F. McDonnell offered significant modifications Thursday to his signature plan to privatize the sale of distilled spirits, eliminating a controversial fee on restaurants as he works to build support from wary legislators.

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McDonnell (R) wants to close 332 state-owned Alcoholic Beverage Control stores and auction new licenses to sell liquor to 1,000 private retailers, including grocery and convenience stores.

He says that ending the state's 76-year-old monopoly on the sale of hard liquor would generate $458 million that could be used to improve the state's ailing road network without raising taxes.

Since the plan was unveiled Sept. 8, it has been endorsed by a number of industry and interest groups, including a coalition of large retailers, Virginia's wineries, construction industry trade associations and the Fraternal Order of Police.

But he's been less successful with members of the General Assembly, whose support will be necessary to make the plan a reality. Reactions from many legislators in both parties have ranged from scoffing opposition to tepid neutrality.

Changes announced Thursday by Eric Finkbeiner, McDonnell's policy director, could help bolster support from restaurateurs, whose statewide association endorsed the policy in response.

It could also help build support from conservatives who had expressed hesitation about backing a plan with hefty new fees.

But the revision will probably deepen concerns of lawmakers who think privatization will be a bad deal for the state over time. McDonnell's projections show that with the modifications, his plan would result in $47 million less each year to fund such state services as schools and police.

The revisions highlight a central conundrum McDonnell faces as he attempts to sell his complex proposal: Changes he might make to satisfy the concerns of some lawmakers are likely to cost the support of others.

"It's like a Rubik's Cube," said Del. David B. Albo (R-Fairfax). "When you turn one side, you end up fixing that side, but you mess up all the other sides."

McDonnell signaled Thursday that he might call off plans for a November special session to consider the proposal and other recommendations for government reform if he believes legislative opposition to be so strong that the session would be a waste of time.

"We'll do a count here in the near future and see where we are," he said, indicating that he would still like to see the session occur.


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