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Taxes axed from McDonnell plan, create budget gap

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?”

Full Story: Taxes axed from McDonnell plan, create budget gap | Richmond Times-Dispatch