The Arizona-based Goldwater Institute is wading into Santa Barbara County’s wine business, claiming that the recently enacted one percent fee on wine sales to support regional marketing efforts is unconstitutional. The Santa Barbara County Vintners Association, however, says that similar attacks have previously been aimed at business improvement districts across California and that they’ve never been successful.
In a letter sent to the County Board of Supervisors on behalf of the owners of Flying Goat Cellars in Lompoc, the institute — which was founded in 1988 to uphold the free-market beliefs of Senator Barry Goldwater — argues that the fee violates the First Amendment because it puts all wineries into the association, even if they don’t want to be, and that it compels them to subsidize speech even if they don’t agree with it. It also says that the Fifth Amendment is being violated because it is taking Flying Goat’s money “with no legitimate public use.” (Read the letter here.)
“I’m not opposed to partnerships or marketing,” said Flying Goat’s founder Norm Yost in a press release. “But as an independent business owner, I am opposed to being forced into an association I don’t necessarily agree with and paying fees that may not benefit my business. I just want to make wine I love and connect with customers on my own terms.”
Business improvement districts like this are proliferating across the state, and Santa Barbara County enacted its own last year with significant support from the vintners. That was after the initial attempt in 2020 was scuttled due to opposition. The one percent fee — which amounts to 35 cents on a $35 bottle of wine — is generating money that the Vintners Association uses to publicize the region.
The Santa Barbara Vintners CEO Alison Laslett is not concerned by the correspondence. “This is an advocacy letter, not a lawsuit, raising constitutional arguments that have been rejected in prior California cases,” she said. “These issues have been settled in the context of business improvement districts, which have operated for decades under state law. The Santa Barbara Wine Improvement District, formed by the County pursuant to that framework, is no exception.”
