BIG CHANGES IN TAVERN LAWS SWEEP STATE

New license costs $10,000

Madison In a notsorandom act of protectionism, top state officials
have decreed that, starting today, it will cost at least $10,000
about 20 times what it had cost to apply for any new local tavern
license in Wisconsin.

By doing so, they reasoned, it will instantly drive up the value of the
11,000 existing taverns places like the shotandbeer PB's Hideaway
in Oconto County, with its a landmark 15foot statue of Paul Bunyan. One
out of every four taverns near PB's is for sale, with no buyers, says
owner Geri Kolakowski.

Kolakowski and the Tavern League of Wisconsin, whose members have spent
years and hundreds of thousands of dollars asking the Legislature
and governor for help, admit that the new law is a blatant attempt to
manipulate anyone wanting to run a tavern into buying an existing one.

The logic of Kolakowski and thousands of tavern owners like her is this:
To avoid paying $10,000, anyone who wants a Class B tavern license will
look first at existing taverns. There will be no increase in the average
fee of about $500 to sell, transfer or renew existing licenses.

"We were trying to 'add value' to these momanddad operations,"
explained Kolakowski, 53, who helped lobby the changes through the
Legislature and who works up to 18 hours a day to scrape out a profit
from a bar that seats only 24.

If new tavern licenses cost $10,000 each, she added, "there's a reason
for somebody to come and look at this old building," which opened in
1929 as a boardinghouse for loggers. The couple's home is on the same
floor as the tavern, which she said has turned a small profit in each of
the last four years.

Cities Oppose Changes

The change has come under strong criticism from many municipal
officials, who see the state meddling in a local issue.

Milwaukee Mayor John Norquist, for example, unsuccessfully pushed
lawmakers to remove the "offensive and sleazy legislation" from the
budget.

Ed Huck, executive director of the Wisconsin Alliance of Cities, which
represents Milwaukee and other large cities, said the law was a
political power play by tavern owners.

"It's rather obscene," Huck said. "It's specialinterest legislation to
increase the value of existing taverns in the state. There is no other
(public) policy reason for it."

The $10,000 fee is only part of the biggest update of tavern license
laws since 1939, when the old patchwork quilt of quotas was enacted. The
whole package, which also will prevent local officials from setting
tougher criteria for who can get tavern licenses than state law does,
becomes law today.

The changes also will wipe out up to 2,500 of the estimated 6,000 unused
tavern licenses statewide, including dozens of unused licenses in
Milwaukee and Madison. Officials in both cities said they do not yet
know how many unused licenses each will lose.

Town, village and city officials across Wisconsin must now count their
existing tavern licenses used and unused and eliminate about half
of the unused ones, if their municipality has more than three unused
licenses.

"It's somewhat surprising it all clicked," said one of the measure's
sponsors, state Sen. Joe Wineke (DVerona), whose father ran a tavern in
Barneveld for 15 years.

Scott Stenger, chief Tavern League lobbyist, said the victory in the
Legislature and with the governor was the industry's biggest in nearly
60 years. The package was passed with a combination of traditional
oneonone lobbying, campaign donations and a power play that saw the
changes added to the 1997'99 state budget.

"I really didn't know any of this was going to be added to the state
budget," said state Rep. Dan Vrakas (RHartland), who said his committee
studying how to help taverns got outflanked when sympathetic senators
added the package to the budget.

"After that, things moved pretty fast," he said. "Once they got it in
(the budget), there wasn't that much support to take it out."

It also didn't hurt that some legislators felt guilty because they
couldn't give tavern owners their first choice: video poker machines
that would let taverns compete with Indian casinos.

Taking a break from serving deer hunters, Kolakowski said she and other
tavern owners felt they had gotten an overdue break. Food and drink
sales at PB's Hideaway are down about 20% since the Northern Lights
Casino and Bingo Hall operated by the Forest County Potawatomi opened
about 10 miles away in Carter, she added.

$170,000 Spent on Effort

The Tavern League spent $100,870 over an 18month period to formally
lobby for the changes, state reports show. The total includes staff time
with legislators, testifying at public hearings, mailings, research and
office costs. It doesn't include time spent schmoozing legislators
something tavern owners are very good at.

Dozens of other groups spent more on lobbying in the same period,
however: Wisconsin Counties Association, $965,300; Wisconsin
Manufacturers & Commerce, $863,000; Phillip Morris, $862,000; and
Milwaukee Metropolitan Sewerage District, $821,200.

Separately, tavern owners and their political fund gave $69,672 over the
same period to the campaigns of legislators and reelection fund of Gov.
Tommy Thompson, who signed the liquor law changes into law as part of
the budget, according to the nonprofit Wisconsin Democracy Campaign.

Other specialinterest groups donated more during the 18month period,
according to the campaign monitoring group. For example, attorneys
donated $362,045; elected and appointed officials, $166,701; real estate
agents and managers, $111,532; and physicians, $108,604.

According to the nonprofit Wisconsin Democracy Campaign, the governor's
campaign fund got $16,375 in tavern owner donations over that 18month
period.

Thompson signed the changes into law because "small businesses are very
important pieces to their communities," aide Kevin Keane said. Thompson
hopes the package helps taverns and restaurants stay in business, Keane
added.

The centerpiece of that package is the bounty of at least $10,000 to
apply for any new tavern license.

In a newsletter to tavern owners, Stenger described the changes this
way:

"Your business is now worth more, and the other changes which were made
make it easier to operate your business. The new $10,000 application fee
for new licenses adds instant value to your existing liquor license and
will also make it easier for you to sell."

Tavern owners say other new laws also help tavern operators by letting
them confiscate what they believe to be fake IDs, without fear that the
person presenting the ID can sue them for personal damages.

And it stops any local units of government from revoking a tavern's
liquor license for one underage drinking violation a year a change a
lawyer for municipalities calls the new "one 'free' underage drinking
violation" rule.

Headache to Implement?

Though Stenger called the new law a "huge victory" for tavern owners,
municipal officials, who must inventory existing tavern licenses and
administer the changes, use a different term to describe it a huge
mess.

"It's creating all kinds of questions already," said Curt Witynski,
legal counsel for the 553member League of Wisconsin Municipalities.
"These are big changes."

Witynski said most municipal clerks may not even be aware of what they
must immediately do: inventory all local tavern licenses used and
unused and eliminate half of the unused ones, for most
municipalities.

And those officials who are aware of the law are asking for guidance:
Exactly when does the $10,000 fee apply? For example, does the $10,000
fee apply if a local bar closes for a few months, but a new owner then
applies to reopen it on the same site?