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June 1, 2010 in City
Candy, beer taxes taking effect in Washington
OLYMPIA — Washingtonians: It’s time to stand up, be counted and develop a few bad habits, if you don’t have them already.
Starting Tuesday, the state will rely even more on its citizens doing things they probably shouldn’t — or perhaps shouldn’t do as much.
Do you buy bottled water? Bad for the environment; good for state coffers.
Have a sweet tooth? Your dentist may tell you to cut back on candy, but your legislator might say please don’t.
Knock back a few beers on a hot summer day? As long as you’re not driving, swill away. Your state needs you.
Taxes on candy, gum, bottled water and beer are expected to bring in a combined $122 million over the next year to help deal with a $2.8 billion state budget gap stemming largely from the recession.
Smokers and soda-sippers also are being tapped: A $1-per-pack boost in the cigarette tax kicked in May 1, and a tax on carbonated beverages starts July 1. Together, those two are expected to bring in $135 million by the end of June 2011.
Those taxes and more — nearly $800 million in all — were included in a budget package that also enacted $755 million in cuts and garnered $1.3 billion from tapping reserves, federal aid and one-time fund shifts.
The taxes consumers will notice most directly, at grocery and convenience stores, make up a small part of the overall budget fix, but other taxes also will work their way into people’s wallets, such as a projected $242 million from a boost in the business-and-occupation (B&O) tax on services such as those of lawyers, accountants and hairdressers.
When it comes to taxing people’s bad habits, one risk is that people might change their behavior, and end up not generating as much in tax revenue.
“When you increase the price, consumption does go down slightly,” said Mike Gowrylow, spokesman for the state Department of Revenue. But Gowrylow said that dip is built into budget projections, based on revenue models guided by past experiences.
The declines sometimes are temporary. If a popular product is taxed, “At first people are mad and they don’t buy it, but after a while they get over it and buy it anyway,” Gowrylow said.
The cigarette tax, unlike some of the other measures, actually is intended to encourage people to quit, or not take up the habit. Tim Church, spokesman for the state Health Department, said calls to the state’s Tobacco Quit Line (800-QUIT-NOW) increased 42 percent in May, indicating the tax, the nation’s second highest, is having that effect.
In the 10 years since the state started its Tobacco Prevention and Control Program, the number of smokers in Washington has dropped more than 30 percent, to an estimated 770,000, Church said.
Although that means there are fewer smokers to pay a cigarette tax, the Health Department says it’s a money-saver in the long run, since smoking’s effects cost the state and its residents roughly $1.5 billion a year in health care.
Smokers and drinkers long have been key contributors to the state budget. In the past fiscal year, smokers coughed up more than $428 million in state taxes, and drinkers paid more than $275 million.
“Whenever they need a new tax, they look at alcohol,” said Barry Adams, owner of The Beer Authority in Lake City, which stocks more than 150 beers and offers a half-dozen on tap.
Domestic microbrews are exempt from the tax increase, but all imports, strong beers and large breweries are subject to the tax, which will add about 28 cents to the cost of a six-pack.
Candy, a more benign vice, is subject to the state sales tax under the new law, and only time will tell if — and how much — people will cut back.
Nicole Miller, owner of Blackbird Candy Shoppe in Ballard, expects customers to continue to allow themselves their sweets. “People have a huge emotional attachment to candy,” she said. “They don’t think about the price.”
Miller opened the candy shop last year in a streetfront nook adjacent to her men’s shop, largely to “keep people coming in and spending money in the recession.” Shelves of old-time glass jars beckon with colorful gummy and hard candies, and a display case offers artisan truffles up to $2 apiece.
Greg Taylor doesn’t share Miller’s confidence. He’s president of Cashmere-based Liberty Orchards, producers of Aplets and Cotlets, among the state’s oldest and best-known candies.
“Even on small purchases, consumers are price sensitive,” Taylor said. “The more something costs, the less people will buy it.”
What confounds Taylor the most is the way candy is being defined — a definition that includes his fruit-and-nut confections but excludes some familiar candy bars, such as Kit Kat and Twix. Under the law, which draws from an agreement among states with sales taxes, candy does not contain flour. So chocolate bars that contain wafers made of flour are not taxed.
Taylor and other candy-makers unsuccessfully opposed the tax but were given a $1,000 tax credit for each worker they employ, to help offset the lost revenue.
“Nutritionally, candy’s no worse for you than a lot of things people buy,” he said. “We’re not loaded with saturated fats like red meat, for example.”
© Copyright 2010 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
Couple acquitted of caging 2 boys 
soccermomsusie on June 01 at 10:30 a.m.
I was at the store last night. You should have seen the lines. Hundreds of people with their carts full of beer, pop, candy and cigarettes. It was like a run on the bank.
Sure all the libs, said that a nickle tax on a can of pop wouldn’t starve anybody, that no one would even bother to pick a nickle up off the sidewalk. But, you should have seen them last night.
Armageddon.
I heard one little boy ask his mom, “Mommy, why does Govenew Gwegwah hate childwen so much?” as he clutched a six-pack of diet RC. His mother comforted him by reminding him that Jesus was coming soon and that they probably wouldn’t even get a chance to finish the pop, and that everybody takes pop baths in Heaven! What a good mom.
The only good thing is that now no one will drink alcohol any more because it is now too expensive.
First Governor Gregoire came for the alcoholics’ beer and I said nothing. Then she came for the fatties’ pop and I still said nothing. Then the evil smokers’ cigs, still nothing. When she came for my needlepoint supplies and two-stroke motor oil, everyone was too sober, too skinny and too healthy to speak for me.
HEAR OUR VOICE AND YOU BETTER NOT TAX MY TEA!
mudd1280 on June 01 at 11:21 a.m.
it funny that we voted no on this matter and our lovely Christine Gregoire pretty much said screw the people lets make this tax happen and now our vote doesn’t mean anything asnd we wonder why we hate our government.
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soccermomsusie on June 01 at 12:09 p.m.
I am with you mudd128o. We need to elect people who tell us that government is not the solution, that it is the problem. We need to elect people who tell us government ruins our lives. Once they are elected, they can prove it all to be true! That is why George W Bush will go down in history as the best president ever.
Would you rather hire a pilot to fly your airplane who says, “Airplanes suck. They always crash,” or one that says, “Airplanes are great. I will make sure this one doesn’t crash.” I would hire the first one, then I would drive my Hummer wherever I needed to go. Why? Because I can.
I wish Governor Gregoire would do whatever we tell her to do too. Isn’t that what she gets paid to do, whatever we want?!?!
HEAR OUR VOICE!
chelsita on June 01 at 1:44 p.m.
If they must raise taxes, at least I have a choice in whether or not I continue to buy those items (gum, “candy,” beer) as they are non-essential to my quality of life. Better than taxing milk or flour, etc.
That being said, government spending is whack. They need to incent departments to save money-not a “use it or lose it” budget approach.
You don’t have to be left, right, or tea to be smart about $$$.
tomich99224 on June 01 at 2:14 p.m.
Well Idaho for sure will be getting more of my business. I’m over there often enough that I can divert my spending on those things that had tax increases. With their smaller sales tax to begin with I should be able to save a tidy little bit and top off my gas tank for less to boot.
soccermomsusie on June 01 at 2:36 p.m.
Thomas, It would be well worth the trip to Idaho just to save a penny on a candy bar.
Looking at people from Idaho’s teeth, I would say they know their way around pop and candy!
I heard that there is hardly any tax on candy or pop in Mississippi. Road trip anyone?
HEAR OUR VOICE!!
tomich99224 on June 01 at 2:41 p.m.
Well that sounds like a stereotype to me. A couple of people in Texas are fat, so they all must overeat down there.
It’s not really the amount of money I’m saving by buying a few things in Idaho. It’s the “personal” satisfaction I derive by being able to deny that liberal B**** in Olympia any more of my money than she already gets. And if anybody thinks these temporary taxes are going to go away at the end of 2011, then they don’t know much about how liberals function.
tomich99224 on June 01 at 2:45 p.m.
BTW SoccermomSusie: Right on about getting some elected officials who do what we want them to do rather than doing whatever they feel like doing. Maybe that can all start to change this November if people who are fed up would only get out and vote.
Remembernovember.com
dallison on June 01 at 5:18 p.m.
Idaho will get our business on all these items as well as gas since its always cheaper and we make regular trips to idaho anyway.
mikeln on June 04 at 6:09 p.m.
Bush and Cheany were great, great at selling us out to China, a communist country, great at killing our finest soldiers so the oil in Iraq could go to China. It amazes me how religious folk can be so blind to the real truth.