Source: AP
By CURT WOODWARD
April 5th
Hold on to your six-packs: Democratic
lawmakers are considering a tax increase on mass-market beer, betting that suds
drinkers won't mind paying a little more to bail out a busted state budget.
The idea surfaced publicly Monday as part of a
new tax proposal from the state Senate, which is negotiating a budget-balancing
plan with the House and Gov. Chris Gregoire.
A higher tax on big-brand beers - microbrews
would be exempt - is one of the first new revenue-raising ideas to emerge in
weeks as majority Democrats work their way through difficult tax-and-spending
negotiations.
"There are no real good choices when
you're raising taxes," said Senate Democratic Caucus Chairman Ed Murray,
of
The state House's revenue chairman and
Gregoire didn't immediately reject the notion, raising the possibility that a
higher beer tax could make it into the Democrats' final tax package.
"It's discretionary spending, so as far
as I'm concerned, I'm open to it," Gregoire said.
House officials said they could have their own
counteroffer on tax hikes later Monday.
Democratic leaders have struggled all year to
agree on a revenue package to help balance the state's budget. The state's main
checking account is running a projected $2.8 billion deficit through June 2011,
with the slow economy draining revenue collections and more people seeking
state services.
Lawmakers have agreed on the general outlines
of a budget-balancing plan that combines spending cuts, federal bailouts and
one-time accounting maneuvers with about $800 million in tax increases. But the
details of how to build that tax package have vexed legislative leaders and
Gregoire, pushing their work into a 30-day special session that expires in
about a week.
Lawmakers have basic agreement on most of the
revenue package, including a temporary surcharge on service businesses and the
shrinking of various tax exemptions. That has left about $200 million worth of
taxes stuck in negotiations.
The new Senate Democratic plan for bridging
that gap was offered to other officials over the weekend. The biggest chunk
raises $90 million by increasing the state sales tax to 6.6 percent from 6.5
percent. That would be paired with a rebate for poorer consumers.
Another $58 million comes from the higher beer
tax: 50 cents per gallon, which translates to about 43 cents per six-pack,
officials said. Microbrews, which have a strong following in
Extending the sales tax to bottled water would
generate about $35 million, and charging sales tax on candy and gum would bring
in about $29 million, with a corresponding business tax credit for
Washington-based candy companies.
House Democrats and Gregoire have balked at
the Senate's preference for a temporary sales-tax hike, saying it's too harmful
to the fragile economic recovery.
Senate Democrats say they can't attract enough
votes for several of the targeted taxes offered by the House and Democratic
governor, including taxes on banks' mortgage interest, custom software
products, and sales to out-of-state shoppers.
House officials and Gregoire kept up their
criticism of a sales tax Monday, while the Senate continued to favor that
approach instead of targeted tax hikes on certain industries.
-----------