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Posted at 6:15 PM ET, 01/ 4/2011

McDonnell still quietly working on new liquor plan

By Anita Kumar and Rosalind S. Helderman

A national financial management company hired to help revamp Gov. Bob McDonnell's ABC proposal told legislators late last week that the state could privatize its retail liquor stores without losing money, according to one participant.

PFM Group officials unveiled several proposals to a legislative work group in which the state's general fund would remain revenue neutral.

McDonnell (R) is expected to release a proposal to privatize the state's 332 liquor stores before the annual legislative session begins Wednesday. He has previously said a bill would be introduced on the first day of the session.

He canceled plans for a special session to consider his original proposal last fall after facing opposition from Democrats and some Republicans, primarily because it would have have brought in $47 million less each year than the current system.

Several legislators and industry groups contacted Tuesday said they have not yet been briefed on the specifics of the governor's proposal, and that the governor's office staff told them they were still working on a plan.

PFM was hired at a cost of $75,000 to consider ways to privatize the state's 332 retail stores (similar to the way Iowa and West Virginia did) or partially privatize the state's retail stores (similar to the way Ohio did). One participant said that the Ohio model was not favored because it did not bring in enough upfront money for transportation and because it would lose support from retailers.

Under proposals to privatize or partially privatize retail stores, the state would remain the wholesaler of distilled spirits and continue to apply markup and excise tax at the wholesale level.

McDonnell received a verbal report from the company last month. A final written report will be submtted this month.

By Anita Kumar and Rosalind S. Helderman  | January 4, 2011; 6:15 PM ET
Categories:  Anita Kumar, General Assembly 2011, House of Delegates, Liquor privatization, Robert F. McDonnell, State Senate  
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