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Soda tax exemption fell flat

OLYMPIA – Not to be a nag about the value of public hearings for important stuff government wants to do to us, but legislators’ penchant for closed-door, back-room discussions of the tax plan they passed may have bit them in the posterior.

Or more appropriately, bit them in the soda bottlers.

The tax on soda pop goes up 2 cents per 12-ounce can on July 1. Among all the taxes considered by the Legislature this year, the pop tax got the least public airing. There were no committee hearings on the pop tax comparable to some other taxes in the plan that passed – or even compared to some that didn’t pass and were never gonna pass, like Sen. Rosa Franklin’s state income tax proposal.

Gov. Chris Gregoire suggested a soda tax early in the session, but it didn’t bubble up in the Legislature until the final days, when word leaked out the weekend before the special session ended. The state’s bottlers and distributors stormed the Capitol on that Friday and Saturday, but there was no bill to look at. Instead, they got assurances of a “break,” with the first $10 million in sales exempt from the tax.

“Every one of my legislators said, ‘You’re going to be exempt,’ ” Tim Martin, president of the Washington Beverage Association, said recently.

No one outside the handful of legislators and governor’s staffers negotiating the budget saw the wording of the bill until about noon on the session’s last day, and if they’re honest, some legislators will admit they didn’t read the tax bill before voting on it that night.

Gregoire on tax plan: Don’t go changin’, rearrangin’

OLYMPIA – The Legislature returns Saturday with time running out in its special session and only two options on its unbalanced budget, Gov. Chris Gregoire said. Pass an array of taxes that covers everything from soda and bottled water to candy and cigarettes, or go home and have her cut the general fund budget by 20 percent.

A tax package, which has not been seen by the public because it was not final as of Friday afternoon, will be released along with a final spending plan sometime in the next four days. Democrats in both houses will have to get at least a simple majority to pass it, because Republicans remain united against any tax increase and want more cuts in wages, programs and state systems.

Based on comments by Gregoire, various legislative leaders and versions of the tax plan leaked to various news agencies or posted but later removed from a House Web site, the so-called go-home package collects an extra $800 million in taxes as part of a Democratic plan to close a $2.8 billion gap between projected revenues and scheduled expenses. The tax proposal:

• raises the tax on soda pop by the equivalent of about 2 cents a can or 50 cents a case at the wholesale level;
• places the state sales tax on bottled water, candy and gum;
• raises the tax on beer from large national breweries by 50 cents per gallon, or about a nickel for a 12 ounce can; microbreweries would be exempt;
• increases the business and occupation tax on most of the service industry from 1.5 percent to 1.8 percent of gross receipts;
• adds another $1 per pack to cigarettes, and similar tax increases to other tobacco products;
• changes systems for taxing out-of-state firms that do business in Washington.

Taxes on soda, bottled water, sweets, beer and the service industries would expire in mid 2013, although a future Legislature could change that.

Even though the public and most legislators haven’t seen the tax plan in writing, some of those affected are fighting the inclusion of their product or industry…