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Opponents of private alcohol sales take last shot

State high court hears arguments to dismantle liquor initiative

OLYMPIA – Opponents of Initiative 1183 took their last shot at keeping the state in the liquor business Thursday, telling the Washington Supreme Court the ballot measure had too many subjects and hid new taxes by calling them fees.

But attorneys for the state and for supporters of the measure said voters clearly understood the changes they were making to Washington’s long-standing liquor monopoly and the unifying element among the subjects makes the new law constitutional.

The state is just two weeks away from turning its retail liquor stores over to new owners who in some cases bid hundreds of thousands of dollars for rights to those stores. Many supermarkets and other large retailers are getting ready to sell distilled spirits.

The court is hearing the constitutional challenge to I-1183 on an expedited schedule.

Both sides agreed Thursday that if the court rules against the new law by June 1, the changes made so far can be reversed.

If the decision comes down after that, however, “we have a real mess,” said Michael Subit, attorney for the groups challenging the initiative.

Subit argued the new law should be thrown out because the state constitution says a piece of legislation, whether it’s from the Legislature or the voters, can only have one topic. Voters thought I-1183 was about getting the state out of the wholesale and retail liquor business, but it also had provisions that changed laws that govern wine sales and set aside some of the money the state will collect for local public safety programs, he said.

Nothing in the initiative requires those public safety programs be devoted to drunken driving or any other alcohol-related cause, Subit said. The initiative also collects what it calls fees from distributors, but they are really taxes based on sales, he contended.

“It’s pretty hard for me to see how voters were confused,” Justice James Johnson said, adding that voters cast ballots at home, where they have a voter’s pamphlet and plenty of time to research the issues.

“Not confused. I think they were misled,” Subit said.

But Assistant Attorney General Mary Tennyson said the subjects within the initiative had the necessary “rational unity” the court has required in previous cases. “The single subject is liquor,” she said, adding the ballot title would give a voter with an “inquiring mind” enough notice to seek more information.

David Burman, an attorney for sponsors of the initiative, argued the word fee was accurate. “It’s reasonable to call them taxes. It’s also reasonable to call them fees.”

Through the campaign, which was the most expensive in state history, voters got to hear both sides, as opponents “spent millions arguing it’s taxes and we spent millions arguing it’s fees,” Burman said.

Justice Charles Wiggins said he thought some of the fees, which are based on a percentage of a distributor’s sales, looked like a sales tax.

“But it’s also a fee,” Burman insisted.

If a majority of the court finds that the initiative contains too many subjects or imposes a tax rather than a fee, it would likely have to throw out the entire law, Subit said.

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