June 1, 2012 in City

Washington Supreme Court upholds I-1183 liquor law

By The Spokesman-Review
 
State out

The state of Washington has auctioned off the licenses to the liquor stores it owns and sold licenses to wholesalers and retailers. Retail stores offer liquor for sale starting today.

Details

To read the majority and minority opinions from the Supreme Court on the constitutionality of I-1183, go to spokesman.com/spincontrol.

OLYMPIA – Businesses around Washington can begin selling liquor today, after the state Supreme Court refused Thursday to toss out the law voters passed last November to allow the sales.

On a 5-4 vote, the court rejected the challenge from several groups to Initiative 1183, saying laws that pass are presumed to be constitutional and opponents hadn’t proved otherwise.

Opponents – which included a group that fights substance abuse, unions representing state liquor store employees and a property owner who leased land to the state for a liquor store – argued I-1183 misled voters by raising taxes but calling them fees and contained more than the single subject the state constitution requires for initiatives. The state attorney general’s office, as well as retailers and the restaurant association, said everything fell under the subject of liquor.

The debate over the definition of fees and taxes split the court, which came within one vote of overturning the initiative.

The ballot for I-1183 called for “license fees based on sales.” That’s really a tax, opponents claimed, and the term “fee” was misused to get around voters’ opposition to taxes.

But the term is not “palpably misleading or false,” Justice Steven Gonzalez wrote in the majority decision, and the court won’t void a law passed by the voters on the technical significance of a word where it seems unlikely voters were deceived.

Use of the word “fees” for what are really taxes is “a classic bait-and-switch, rendering I-1183 unconstitutional,” Justice Charlie Wiggins wrote in a dissent signed by two other justices. Justice Tom Chambers also challenged the use of the term in a separate dissent.

One of the subjects that opponents claimed wasn’t properly described in the ballot title was a provision to set aside $10 million from revenue collected from liquor sales to be given to local governments for public safety but not necessarily for programs related to liquor or liquor consumption. That was outside the initiative’s subject matter of removing the state monopoly on liquor sales, opponents argued.

But the money set aside for public safety does have a connection to liquor, whether or not it’s specifically directed to liquor control programs, Gonzalez wrote. Liquor consumption affects public safety, and that burden falls heavily on local governments.

“It would be improper to overlook the impact that changes to liquor regulation could have on general public safety expenditures by local governments,” he wrote.

Opponents said the money for public safety was added to the initiative as an exercise in “logrolling,” buying support for one thing by offering something else. Gonzalez said it was “the product of permissible lawmaking.”

Wiggins disagreed. Setting aside money for public safety isn’t a problem by itself, but it isn’t directly related to privatizing state liquor sales. Adding it to the initiative took I-1183 beyond the constitution’s single-subject restriction, he said.

The state established a monopoly on retail and wholesale liquor at the end of Prohibition, and that system withstood several attempts to change it until last year, when retailers led by Costco Wholesale Corp. drafted I-1183. In the most expensive initiative campaign in state history, fueled on the yes side by some $20 million from Costco and on the no side by more than $12 million from liquor, beer and wine distributors, voters approved I-1183 with nearly 59 percent support.

Earlier this year, the state auctioned off the licenses to its retail stores, which have been closing this month; it also began selling licenses to retailers and wholesalers. The new law requires that most stores that sell distilled spirits have at least 10,000 square feet, and many of the state’s large supermarket chains, as well as Walgreens and Costco, have purchased retail licenses. Private retailers can begin selling liquor today.


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