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Washington

Tax on Soda and Candy Is Up to Voters

AARP says tax on soda and candy protects the vulnerable

Washington State Page October 2010

Washington voters will be asked Nov. 2 whether to repeal a 2 percent tax on soft drinks, candy and other items that has helped the state finance services such as Basic Health and Adult Day Health. — Chris Mueller/Redux

Christine Jenkins is a sign language workshop leader with a passion for ginger ale. She likes to share the fizzy treat with her students, but those 30 bottles a week have become more expensive recently because of new state taxes on soda, bottled water, gum and candy.

Jenkins, of Bainbridge Island, doesn't like the new taxes, and this fall she is leaning toward voting for Initiative 1107, which would repeal them.

Ingrid McDonald, AARP Washington's advocacy director, hopes Jenkins won't. Revenue from the new taxes is what kept Gov. Christine Gregoire, D, and the legislature from slashing funds for health care and education this year, McDonald said. Without the taxes, essential programs such as Basic Health and Adult Day Health would almost certainly have been eliminated, leaving older, low-income people unable to afford prescription drugs and ineligible for assistance to stay in their homes.

AARP Washington opposes both Initiative 1107 and a companion measure, Initiative 1053, which would force even small tax increases to be approved by a two-thirds majority of the legislature or by public referendum.

"Such rigid restrictions tie legislators' hands," said McDonald. "It forces them to cut programs because raising taxes, especially in a recession, becomes so difficult."

Washington's fiscal misery has plenty of company: 48 states face budget deficits this year. The recession has increased government's costs due to rising demand for everything from unemployment benefits to career retraining services. Meanwhile, federal assistance is declining, and a decrease in consumer spending means tax receipts are down sharply.

Robert Gara, spokesman for the tax repeal campaign, said that regardless of the tax's small size — two cents per 12 ounces of soda — "taxing food and beverages is not the way to solve the state's budget problems. What's next: a tax on milk?"

But Sandeep Kaushik, spokesman for Citizens to Protect Our Economic Future, which opposes Initiative 1107, added: "This is not a tax on either food or groceries, just nonessentials. A couple pennies more on a can of soda means we can care appropriately for our vulnerable seniors, instead of just abandoning them. It's the right thing to do."

The tax repeal's strongest proponent is the American Beverage Association. The group spent a record $14.4 million through August opposing the tax and seeking its repeal and has indicated it will spend millions more as the election draws near.

"We're already having a tough year," said Tim Martin, general manager of a small soft drink distributing franchise. "Taxing food and beverages is just plain wrong."

Repealing the tax would cost $352 million over five years. Opponents of the tax don't suggest how else the state might raise that money. Our politicians need to make those difficult decisions," Gara said.

The legislature avoided raising other taxes this year by closing the deficit with painful health and education spending cuts. Andy Nicholas, a policy analyst at the Washington State Budget & Policy Center, said further cuts this year would have created an even greater burden on areas such as emergency and social services.

So Washington joined 30 other states that tax candy, 13 that tax bottled water, and six that have a special tax on soft drinks. The rationale was simple: Taxing only discretionary items wouldn't impose a hardship, and shoppers would be discouraged from consuming some unhealthy products.

Even Jenkins, the ginger ale fan, can see some potential benefit. She said a childhood friend lost all her teeth from a cola addiction, and she wonders if a tax could have helped, just as high cigarette taxes have encouraged some smokers to cut back or quit.

L.D. Kirshenbaum is a freelance journalist based in Seattle and San Francisco.

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