With Valentine’s Day on the horizon, customers at Boehm’s Candies are showing one of Issaquah’s top tourist attractions and longest-running businesses a lot of love. Since 1956, the chocolate makers on what is now Northwest Gilman Blvd. have kept local sweet-tooths and sweethearts happy with treats like crème-filled chocolates and peanut brittle, or one of Austrian-born founder Julius Boehm’s traditional favorites, Mozart Kugeln.
“So far, it’s been mostly ladies looking for what to do for friends or coworkers,” said Boehms owner Bernard Garbusjuk. “The boyfriends and husbands come in guilty and confused about a week from now. Usually at the last minute.”
Boehms has weathered the economic recession better than most, according to Garbusjuk, describing his chocolates as an affordable luxury. But while sales of heart-shaped boxes of confections remain brisk, a state deficit projected to be in the billions has legislators in Olympia preparing to dampen the ardor for chocolate with a so-called “sin tax” to fund local health departments.
Proposed by Rep. Jim Moeller (D-Vancouver), House Bill 2388 would remove candy and chewing gum from a state retail tax exemption granted to food. Th estimated $32 million it would collect would help fund health departments around the state, currently facing deep cuts in 2011 and beyond.
Long recognized as a government priority by state politicians, local health departments were once funded by the state Motor Vehicle Excise Tax. But a popular Tim Eyman initiative, and the legislature, eventually eliminated that dedicated source of funding in 2000.
By declaring candy and gum “not a food,” Moeller has thrown down the gauntlet to candy makers that their product should help pay for state health problems.
“They’ve had this loophole they didn’t deserve,” he said. “I remember from my mom and dad, the admonishment I’d get was: ‘Don’t eat that candy and spoil your dinner.’”
That particular allegation is what really galls Boehm’s owner Garbusjuk. After Boehm passed away in 1984, he and his wife Joanne took over operation of the Issaquah chocolatier and a lucrative wholesale business for the company’s candies around the state.
Over the years, said Garbusjuk, the company has consistently raised the bar on the quality of their chocolate, single sourcing imported cocoa and using less butter and sugar in his chocolates. Researchers claim that cocoa has a very high level of cancer-inhibiting anti-oxidants.
“I hate the stigma that we must be taxed because we are a bad product,” he said. “It’s just not true.”
He said the amount of sugar found in half a dozen chocolate bon-bons was the equivalent of one can of soda, which would not be taxed. The same half-dozen chocolates would also have less saturated fat than a small bag of potato chips – also untaxed.
The devil seems to be in the details. The definition of “candy” in the legislation exempts any product made with flour or requiring refrigeration. A bittersweet chocolate-dipped strawberry would be taxed, but chocolate-dipped licorice nibs would be untaxed because of the flour in the licorice chews.
If the tax change is signed into law, the price for a one-pound heart-shaped box of Boehm’s chocolates would rise nearly $4 to over $40.
The chocolate maker plans to meet with local legislators in Olympia this weekend to personally make his case that the “sin tax” is a bad idea.
This session’s legislature is taking a hard look at raising taxes somewhere this year, and dedicated taxes, such as the one Moeller proposes, are viewed as an intelligent way to address funding concerns for services viewed as critical, such as public health.
“The benefits far out weight the detriments in this case,” Moeller said.
Issaquah Chamber of Commerce CEO Matthew Bott, however, said the legislature should “put everything on the table” first – including possible cuts to public safety and criminal justice – before new taxes are imposed on businesses.
He called Boehm’s Candies, with 28 employees in Issaquah, a “a longtime, very cherished member of the community” that should be seen as part of the solution, not a source of more tax revenue.
“We recognize we’re in a difficult economic climate,” he said. “But we’re very concerned about adding new taxes to businesses as they try to add more jobs, sustain themselves and act as economic engines for our community. Everything should be looked at. That’s what we elect them to do.”