Legislators are back at it in Olympia, trying to find a way to close a $2.8 billion budget deficit.

One big ticket item: new taxes proposed by Governor Gregoire on bottled water, soda, candy, and cigarettes.

The Governor says those taxes will bring in some badly-needed dollars, but opponents, like the Washington Restaurant Association, say those taxes would have some unintended consequences.

"At a time when every penny is counted, and restaurants are discounting, trying to get customers to come in, sales are down across the state," says WRS President Anthony Anton. "This is going to have an impact on sales, an impact on bottom lines, and an impact on jobs."

Governor Gregoire's new budget proposal cuts about $1 billion in spending, and could raise $605 million through new taxes, and fund transfers. More than $350 million of the new taxes would come from cigarettes, bottled water, candy, and soda, so-called discretionary items.

As the governor puts it, "We need to have an infusion of money in our account right now."

But Anton says he's very concerned the proposal would also take away a tax credit that restaurants and stores get for buying soda pop syrup, a dollar a gallon.

Add up the pop, and the dollars, and Anton says restaurants could end up paying more for soda than they do for business and occupation taxes.

Some say also, a tax on soda, cigarettes, water, and candy would give people who really can't afford to pay more a new burden.

Taxpayer Ray Verduzco says, "In a grand sense, I'm not thrilled about that, because it would hurt the lower income folks more than anybody. I see this more as politics rather than something people can get behind and say yes, this really works."

Our state has to make it work, says Governor Gregoire, who says she's making a tough call that's appropriate for a tough economic situation. She says, "Nobody likes to raise taxes, but under the circumstances, I've tried to give a balanced approach to get us through these hard times."

For more information on what the legislature is discussing over raising taxes in this session, follow this link.