Gov. Bob McDonnell has dropped two proposed taxes on liquor sales from his plan for getting Virginia out of the distilled spirits business, opening a $47 million-a-year hole in the state budget.
The governor’s revised plan, endorsed yesterday by a gubernatorial subcommittee on government reform, represents a victory for anti-tax conservatives and restaurant owners opposed to a 2.5 percent tax that had been proposed on cocktail sales by restaurants that buy liquor from wholesalers.
The governor’s staff eliminated the tax, as well as a 1 percent tax that had been proposed on wholesale liquor purchases.
But the decision also poses a challenge for McDonnell to win approval of the plan from the General Assembly. He said yesterday that he would not call a special session next month unless he knows he has the votes.
“It’s going to be a tough sell,” said Sen. John Watkins, R-Powhatan, a supporter of privatization. “It’s a matter of what you’re wedded to: Is it the money, or reducing the size of government and getting out of the liquor business?”