McDonnell contends privatizing the commonwealth’s 76-year-old government-run liquor business will generate up to $500 million he could devote to transportation.
The governor’s proposal called for auctioning off the state's 332 retail liquor stores and tripling the number of outlets while putting the wholesale operation in private hands.
However, questions and objections were raised, including whether small businesses could afford the licenses, whether restaurants were willing to pass new taxes or fees on to their customers, and whether liquor stores would soon pop up on every street corner.
After a few negotiated alterations, the McDonnell administration conceded the free-market booze plan would generate at least $40 million less each year than Virginia currently collects for alcohol sales.
Plan A went belly up.
Now the Republican governor has hired PFM Group, a national financial consulting group, to offer a new round of alternatives to the plan. PFM’s contract is worth almost $77,000. A draft report is due on the governor’s desk Dec. 1.