WA lawmakers close on new $800 million tax package

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by ALLEN SCHAUFFLER / KING 5 News

KING5.com

Posted on April 8, 2010 at 5:31 PM

Updated Thursday, Apr 8 at 8:47 PM

OLYMPIA, Wash - Get ready because here it comes. An $800 million tax bill is about to be dropped on the people and select businesses and industries of Washington state. That's what the folks in Olympia figure they need to bring in to balance the current budget without further cuts to social services, education, staff and more.

It's a hodge-podge, nickel-and-dime approach that won't sting too much for the individual taxpayer. There will be new taxes on bottled water, candy and gum.

Soda makers will pay a new tax, too. Professional services - lawyers, consultants, accountants, etc. - will pay a new B and O tax.

Beer-makers will pay a tax, so that means beer-drinkers will pay a tax - figure an extra 30 cents or so per six-pack  That's just for "Joe Sixpack" kind of beer. Microbrews are exempt.

Paul Guppy with the conservative Washington Policy Center says it's not the worst approach. He would rather see no new taxes at all, but understands the economic and political logic of the scattershot approach.

"It allows the economy to absorb this better. And it allows the Democrats who are putting this out there a little easier sell," said Guppy.

One portion of the $800 million revenue package, the soda tax, has infuriated local bottlers. Tim Martin, head of the Washington Beverage Association says the tax - 2 cents on a 12 ounce drink - may not hurt individual consumers, but it will punish the soft drink business and cause cutbacks and job losses.

"The soft drink market is extremely price sensitive. There is a direct correlation between price and sales. For every one percent the price goes up, volume drops one percent. Sales, which are already down in a poor economy, will fall off a cliff if we try to pass this increase on to our customers," said Martin.

Lawmakers still have not finalized the revenue portion of the budget. Gov. Chris Gregoire and leaders in the House and Senate are still negotiating and still counting votes. Lawmakers have been called back to Olympia for sessions Friday. The special session ends next Tuesday.

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