| March 30, 2005 Note: I alone in the Olympia press corps recognized
the entertainment value of the Spam tax. In the Dubious Honors category,
this story was featured on the Rush Limbaugh show. Lawmakers later
abandoned the idea because of public outcry.
Balancing the budget with smokes, liquor ... and Spam? By REBECCA COOK
Associated Press Writer
OLYMPIA, Wash. (AP) _ Meet the secret ingredient in the state
budget: Spam.
Along with tax increases on cigarettes and hard liquor, the recently
released Senate budget proposal would slap a higher tax on canned meat.
Spam,
vienna sausages, potted ham, chili con carne - no tinned meat would be
spared the higher tax rate. The business and occupation tax is paid by
the producer, not the consumer, although taxes do have a way of
trickling down the food chain.
"That's ridiculous," scoffed Richard Wilson of Olympia, who was drinking
whiskey and smoking, though not eating tinned meat, at a bar called King
Solomon's Reef on Tuesday afternoon.
"They're actually raising taxes on poor people who can't really afford
it," Wilson said. "You know they don't have much money if they're eating
chili out of a can."
Even
some who believe lawmakers should raise taxes to pay for human services
felt a twinge of sorrow.
"I'm
torn between my love for vienna sausages and my love for state
services," confessed Olympia lobbyist Lauren Moughon, who called the
canned meat product a "guilty, guilty pleasure."
Producers and fans of meat in a can caught a break earlier this year
when the state Supreme Court ruled in favor of the Tacoma-based makers
of Nalley's chili con carne, and said nonperishable meat products should
be taxed at the same, lower rate as perishable meat products.
Of
course, the definition of "perishable" may be a matter of taste, Justice
Susan Owens noted in her opinion: "Once canned, the chili has an
indefinite shelf life in terms of remaining fit for human consumption,
although it is likely to acquire an unsavory taste after four to six
years."
Nevertheless, Nalley and other manufacturers that turn perishable meat
into nonperishable meat products should be taxed at 0.138 percent, the
court ruled, not 0.484 percent.
The
Legislature will probably act this year to make canned meat producers
pay the higher rate - a change that's worth $11 million a year to the
state budget.
With
a budget shortfall of $1.6 billion for the upcoming two-year budget
cycle, legislators say they'll take money where they can get it -
including a tin of meat. The budget proposals from Senate Democrats and
Gov. Christine Gregoire both include higher cigarette taxes, and Senate
Democrats also want to impose a higher liquor tax.
Some
drinkers, smokers and canned-meat-eaters say they're willing to pay a
little extra if their money goes to a good cause such as education or
health care.
"I
smoke, and I don't have a problem with it. It's more incentive to quit.
Hard liquor? I have no problem with that," said Michelle Mykol of
Olympia. "The meat thing is just random, but it's all optional stuff I
guess."
Others made plans to hit the grocery store.
"Guess I better stock up on jalepeno chili," said Debbie Culwell, a
state employee on her lunch break.
Bills
before the Legislature would apply the higher tax rate to nonperishable
meat products but would exempt non-canned smoked or cured meat, jerky
and meat byproducts such as tallow. However, officials at the
Seattle-based Oberto Sausage Co. have raised fears that their sausage
and jerky could be the next tax target.
Officials at Oberto and Bird's Eye Foods, the parent company of Nalley,
did not respond to interview requests on Tuesday.
The
canned meat tax will affect about 3,500 companies, both in and out of
Washington state, according to the Department of Revenue.
Conservatives have assailed the governor's and Senate Democrats' budget
proposals, saying the reliance on "sin taxes" makes them unsustainable
plans.
"If
lawmakers choose to rely on such narrow-based taxes to support the
general fund, they will face a continuation of the recent pattern of
shortfalls, program cuts and budget legerdemain," said Kriss Sjoblom,
vice president for research at the Washington Research Council.
But
taxes that affect a narrow group of consumers are popular with state
lawmakers across the country, said Bert Waisanen, fiscal analyst at the
National Conference of State Legislators.
"It
kind of depends on what your definition of sin is," he said.
Tobacco taxes are by far the most commonly used tool, he said, followed
by alcohol taxes. He wasn't aware of any meat taxes pending in other
states.
Still
to come: the House Democrats' budget proposal. |
