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February 18, 2010 in City
Gregoire lays out tax plan
Governor proposes targeted increases on candy, tobacco
Gregoire
(Full-size photo)
OLYMPIA – Washington should tax candy, bottled water and soda, and raise taxes on toxic substances like petroleum as part of a “balanced approach” to the worst economic times in more than 70 years, Gov. Chris Gregoire said Wednesday.
She urged the Legislature to fill a $2.8 billion hole in the state budget by making about $1 billion in cuts to programs, services and employee costs; raise about $605 million in taxes; expect increases in federal funds for medical programs; and use about $677 million in budget reserves or fund transfers.
Last December, Gregoire proposed an “all-cuts” budget that sliced deeply into health, social services and education programs but has since said she’d like to restore some of those cuts with new taxes. Wednesday she listed her preferences for getting that extra money:
•Extend the sales tax to candy and gum;
•Place an excise tax of 1 cent per ounce on bottled water;
•Place an excise tax on soda that amounts to a nickel for a 12-ounce can;
•Raise the tax on cigarettes by $1 a pack, to $3.025;
•Increase the hazardous substance tax from 0.7 percent to 2 percent, which amounts to an increase of 3 cents to 5 cents per gallon depending on who’s making the estimate, and put the lion’s share of it in the General Fund for the next biennium;
•Eliminate business and occupation tax exemptions for sales of gold bullion and syrup used in carbonated beverages, and require corporate directors to pay taxes on the fees they receive for their services.
The proposal does not have a general increase in either the sales or B&O tax. Some legislators have proposed a temporary increase in the sales tax of up to 1 percent, tied either to a time limit or a sign that the economy was improving.
Gregoire said she and her fiscal advisers rejected a sales tax increase as regressive and harmful to the recovery. She adds or raises taxes on items she contends are discretionary: “I don’t think the economic recovery of the state of Washington relies on cigarettes, candy, gum and bottled water.”
Gasoline isn’t discretionary for people trying to get to work, Senate Minority Leader Mike Hewitt, R-Walla Walla, said of the tax on toxic substances: “Now is not the time to be raising taxes on our residents and businesses.”
Gregoire argued that oil companies, which are making large profits, might not pass that tax to consumers because gas prices are so volatile.
A House committee hearing Wednesday on a tax increase on toxic substances similar to what Gregoire proposed drew overflow crowds. Refineries warned it could cost jobs, and farm lobbyists said it would raise their costs, but environmentalists and local government officials, including Spokane Mayor Mary Verner, spoke in favor of the tax to help with stormwater and river cleanup projects.
All the money should go to toxic clean-up, Verner said later, but she understands the state budget is hurting and needs some of that money for the next three years. Asked if she’s concerned the state will re-fuse to shift all the money back to toxic cleanup, she replied: “I’m always concerned about that.”
Sen. Rodney Tom, D-Bellevue, said Senate Democrats will release a budget early next week and currently are split between a menu of tax increases, as Gregoire wants, and a general sales tax increase. Republicans in both houses have said that except for changes to state law to correct the tax the Supreme Court lifted from out-of-state wholesalers, they oppose tax increases.
Romney/Paul split weighing on county GOP 
liarsinnews on February 18 at 6:54 a.m.
Gregoire, and her ilk, aren`t satisfied with being the 11th highest taxed state in the union, but the darn fool is shooting for the number ONE spot. Gregoire, should put a tax on social security, at least for smokers who she thinks have a one way ticket to hell. I do like the drive over to Idaho. If a person buys a few items at a lower sales tax, notwithstanding the savings on gasoline, the trip is more than paid for.
reservedparking on February 18 at 7:44 a.m.
One cent per ounce!?!?! That’s not tax, that’s robbery! At 16.9 ounces per bottle & given a 35-bottle case, that’s more than the water itself costs!
Gee, I guess when I go get my phosphate dishwasher detergent, I can gas up AND get some bottled water & soda too!
darre on February 18 at 8:22 a.m.
Boy I sure am glad I didnt vote for her!!!! she should run for u.s. senate she is just like them they dont listen to we the people . We vote for something then they figure out a way to bypass it. her taxhazardous substance tax 0f 3 cents to 5 cents depends on who makes the estimate she will tell them what she wants is all. it shouldnt go to general fund it should be hazardous substance fund only. She doesnt think oil co. wont pass that on consumers hahaha she crazy to think that wont happen.neither will the corporate directors you cut into their millions they’ll just pass it on too. I think I’ll quit my job and go to work for the government then I wont have to worry about layoffs and I’ll have better health care
Orphan on February 18 at 9:17 a.m.
Typical elected official, mismanage our tax money for years and then ask us to pay for their mistakes via more taxes. I think I will fire you next election. BYE BYE
MrNatural on February 18 at 10:09 a.m.
Ah yes the cost of a fine community and a great state comes with citizen unity and personal sacrifice. I must say I do enjoy the quality that Washington State affords to keep its infrastructure intact, its schools and municipalities functioning at above average standards and a clean and healthy environment. I would hate to see this state become another Mississippi, Texas or Arkansas where freedom rings a hollow tune.
horse_feathers on February 18 at 10:34 a.m.
Mr. Natural,
When the state forces you to pay excessive taxes, that’s not “personal sacrifice” and it certainly is not promoting freedom. You idiot!
MrNatural on February 18 at 11:06 a.m.
Thank you horse feathers for the personal attack and insult on an opinion page.
I feel our elected leaders have many obligations and at times must make difficult and unpopular decisions…and this is one of them. I also know it is very easy to criticize government until you are charged to run it. I feel the decisions made were necessary akin to the similar notion of how the economic stimulus though refuted by conservatives initially was lauded by them when they saw the benefit to the people. I-960 is an ineffective paralyzing notion that was contrived more by mob emotion than rational effective forethought. I feel this action of its suspension and subsequent leadership decision will benefit this state and its people.
BigE on February 18 at 1:58 p.m.
Ms. Govenor looks perplexed everytime I see her picture.
She is trying to figure what to say, or not say,
or is it, “whew it’s hot in here, open the windows”