SB 5389
In CommitteeSenate
Liquor revenue/local gov.
Restoring liquor sales revenue distributions to local governments.
This status may be delayed. See Action History below for the latest updates.
How does a bill become law?
- Introduced: The bill is filed and assigned a number.
- Committee: A subject-matter committee holds hearings, takes public testimony, and decides whether to advance the bill.
- Floor Vote: The full chamber (House or Senate) debates and votes on the bill.
- Opposite Chamber: The bill repeats the committee and floor vote process in the other chamber.
- Governor: The Governor reviews the bill and decides whether to sign or veto it.
- Signed: The bill has been signed into law.
AI Analysis
This bill changes how excess liquor sales revenue is distributed to local governments and the state. Instead of first funding municipal research services, the revenue now goes directly to border areas, counties, cities and towns, and the state General Fund in fixed percentages. It also repeals a related law that previously directed some of this money to support local government research services.
- Restores direct distribution of excess liquor revenue to local governments in June, September, December, and March each year.
- Allocates 0.3% of total excess funds to border areas (counties adjacent to other states or Canada).
- Distributes 10% of remaining funds to counties based on the population of their unincorporated areas (excluding counties where alcohol sales are banned in unincorporated areas).
- Distributes 40% of remaining funds to cities and towns (population-based share).
- Sends 50% of remaining funds to the state General Fund.
- Repeals RCW 66.24.065, ending the separate funding mechanism for municipal research and services.
Who is affected
- Counties — Counties with unincorporated areas receive a portion of liquor sales revenue based on the population of their unincorporated areas; counties where alcohol sales are banned in unincorporated areas are excluded.
- Cities and towns — Cities and towns receive 40% of remaining liquor revenue after border areas and counties are funded; funding is distributed based on population share.
- Border areas — Border areas (counties adjacent to other states or Canada) receive 0.3% of total liquor revenue before other distributions.
- State of Washington (General Fund) — The state General Fund receives 50% of remaining liquor revenue after border area and county allocations.
Pro/Con Analysis
Potential Benefits (3)
Restores predictable, quarterly distributions to local governments, improving cash flow and budget planning — especially helpful for smaller jurisdictions that lack sophisticated financial forecasting or reserve capacity.
Local GovernmentPeopleRef: Sec. 1 (distribution in June, September, December, March)Directs funds to counties based on the population of unincorporated areas, which better reflects service delivery responsibility (e.g., county sheriff, road maintenance in rural zones) and avoids overfunding cities while underfunding surrounding rural areas.
Local GovernmentPeopleRef: Sec. 2 (county allocation tied to unincorporated population)Maintains a substantial (40%) and transparent population-based allocation to cities and towns, supporting municipal services like police, fire, parks, and code enforcement — especially beneficial for mid-sized and growing municipalities.
Local GovernmentPeopleRef: Sec. 1 (40% to cities and towns, population-based)
Potential Concerns (4)
Eliminates dedicated funding for municipal research and services, a service that supports local government capacity-building (e.g., policy analysis, grant writing, technology modernization) — especially valuable for small or resource-constrained jurisdictions that lack in-house expertise.
Local GovernmentRef: Sec. 1 (repeal of RCW 66.24.065)Reduces the share of liquor revenue available to local governments by shifting 50% of remaining funds to the state General Fund — potentially constraining local fiscal autonomy and reducing flexibility for infrastructure, public safety, or community services in cities and counties.
Local GovernmentRef: Sec. 1 (50% to General Fund)Excludes counties where alcohol sales are banned in unincorporated areas from receiving county-level distributions — disproportionately harming rural, often low-income counties where prohibition is more common and where local revenue options are already limited.
Local GovernmentLean peopleRef: Sec. 1 & Sec. 2 (county allocation based only on unincorporated population)Creates a small, fixed allocation (0.3%) for border counties that may not reflect actual need or economic impact, while reducing overall funds available to other local governments — potentially distorts equitable distribution and rewards geographic proximity over population or need.
Local GovernmentLean peopleRef: Sec. 1 (border areas receive 0.3% before counties/cities)
Who Is Most Affected
Rural counties with significant unincorporated populations benefit from predictable, population-based funding tied to actual service responsibilities (e.g., sheriff, roads), though those with alcohol prohibitions lose eligibility — a mixed impact.
Cities and towns gain stable, quarterly funding based on population, supporting core services — a positive impact, especially for mid-sized municipalities that rely on local revenue but lack large tax bases.
Border counties receive a small fixed allocation (0.3%) before other distributions, offering modest benefit — but this comes at the expense of broader local revenue, so the net effect is marginal and may not offset losses elsewhere.
The state General Fund gains 50% of remaining funds, strengthening state budget flexibility — but this reduces local fiscal autonomy and may increase pressure on state funding formulas for local services.
Municipal research and support organizations (e.g., WAMR, WAMC, MRSC) lose dedicated funding, weakening their ability to assist small jurisdictions with technical support, policy analysis, and grant acquisition — a negative impact on capacity-building infrastructure.