Sluggy's Lake Front Inn, Inc. v. Town of Delavan

BROWN, P.J.

(dissenting). I am compelled to dissent. This is a liquor licensing case. Liquor licensing is an exercise of police power. State ex rel. Martin v. Barrett, 248 Wis. 621, 626, 22 N.W.2d 663, 666 (1946).1 As such, the licensing must not be used for the purpose of raising revenue. State ex rel. Attorney General v. Wisconsin Constructors, Inc., 222 Wis. 279, 285, 268 N.W. 238, 241 (1936). Rather, because it is an exercise of the police power, the fee must be designed to cover the costs of regulation. Id. at 289, 268 N.W. at 243.

If the imposition clearly and materially exceeds the cost of regulation, inspection or police control, it is generally held to be a tax or an illegal exercise of the police power. 4 Cooley, The Law of Taxation pp. 3513-14 (4th ed. 1924). As a tax, or illegal exercise of police power, such an imposition would violate Wis. Const, art. VIII, sec. 1. Objection to licensing fees on grounds that they are excessive necessarily involves a constitutional test of reasonableness. This test requires that when imposing regulations under the police power, the means must bear a reasonable relationship to the end. See State ex rel. Carter v. Harper, 182 Wis. 148, 152, 196 N.W. 451, 453 (1923); see also Wisconsin Constructors at 285, 268 N.W. at 241.

The majority attempts to bypass the constitutional question by asserting that the appellants are not claiming *204the state statute to be unconstitutional. The rationale appears to be as follows: If the state statute is not under constitutional attack, it is presumed reasonable. Any ordinances adopted pursuant to statute are then valid. Creation of an ordinance in compliance with the statute negates any need for a reasonableness determination by the court.

I respectfully disagree. An ordinance adopted under police power granted by state statute is still subject to the test of reasonableness. See Highway 100 Auto Wreckers, Inc. v. City of West Allis, 6 Wis. 2d 637, 646, 96 N.W.2d 85, 90 (1959). The mere finding that the fees are within the statutory guidelines does not end the analysis. The fees must still bear a reasonable relationship to the costs and expenses of policing the enterprise.

I would reverse and remand for the parties to address the factual question relating to the reasonableness of the fees.

The town of Delavan argues that liquor licensing is excepted from the usual rule that licensing must be reasonably proportionate to the costs and expenses of policing the license. It cites the dicta found in Tenney v. Lenz, 16 Wis. 566 (1863), as its only basis for support. I disagree, mostly on the strength of later cases that appear to say otherwise. See, e.g., State ex rel. Martin v. Barrett, 248 Wis. 621, 626, 22 N.W.2d 663, 666 (1946).