The Senate this afternoon approved a two-bill revenue package that would generate $890 million to help close the state's $2.8 billion budget shortfall.

The package, approved as part of a balanced approach to re-balancing the state budget, now heads to the House. The Senate already has approved a budget containing $829 million in cuts to services and public employee compensation. That comes on the heels of having cut more than $4 billion a year ago without raising taxes.

“This is one of the toughest votes I've taken in my political career,” said Sen. Tracey Eide, D-Federal Way. "These are unprecedented times."

"Do I want to raise taxes? Who does?" Eide asked. "But I have a constitutional duty to balance this budget."

Senate Bill 6874 would increase cigarette taxes by $1 per pack to generate $85.7 million. It was approved 29-19.

Senate Bill 6143 was approved 25-23. It contains a mix of temporary tax increases, permanent tax loophole closures and mitigation tools to blunt the impact on businesses and low-income families to generate $804.6 million.

Provisions of the measure include:

· A three-year increase of three-tenths of 1 percent to the state sales tax, which would be at least partially offset by the Working Families Tax Credit for low-income families. The Department of Revenue estimates the new tax would cost the typical household $29.33 a year. The tax credit, essentially a rebate for those who qualify for the federal Earned Income Tax Credit, would provide a minimum of $25 a year.

· The extension of the existing sales tax to also cover bottled water.

· The implementation of a three-year business and occupation tax surcharge on service businesses of one-quarter of 1 percent. The maximum small business tax credit would be doubled from $35 per month to $70 per month.

· The closure of more than a dozen tax loopholes.

Sen. Jim Hargrove, D-Hoquiam, pointed out that new revenues make up just 7.4 percent of the Senate's two-year balanced budget solution, precisely the same percentage as was used when a Republican-controlled Senate balanced the budget in 2003.

"To say that this is something new and vile and has never been done before is maybe a little bit of hyperbole," Hargrove said.

"I think we all do this with a sense of responsibility," said Senate Majority Leader Lisa Brown, referring to the two-year, $12 billion shortfall.  "We have addressed that problem with reforms. We've done reductions in every functional area of state government that is not constitutionally protected or part of some kind of federal match."

"I do believe this is a fair and responsible approach," Brown said.

"It's a balanced approach," said Seattle Sen. Ed Murray, chairman of the Senate Democratic Caucus. "It's also a courageous approach."