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."
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