TOP STORIES
Lawmakers pin short-term budget fix on B&O tax increases, aim to adjourn tomorrow
With just under 48 hours to go in the 30-day special session, legislators could approve a final budget as early as tonight that relies heavily on a temporary business and occupation tax increase to help close a $2.8 billion deficit. The $794 million tax plan (2ESSB 6143) approved Friday by the Senate and Saturday by the House includes a temporary .30 percent increase in the B&O tax for service businesses. The increase would generate about $242 million in the current biennium, and would affect a broad array of businesses, including accountants, architects, attorneys, dentists, graphic designers, hair stylists, optometrists and veterinarians.

The second biggest piece of the tax plan is the $155 million repeal of a tax exemption for out-of-state companies that sell door-to-door (known as the DOT food case). Temporary taxes on candy, pop, chewing gum, bottled water, cigarettes and beer are also still on the menu and are expected to bring in about $260 million for the 2009-11 biennium. Additional business-related taxes include changing the standard for applying B&O taxes from a physical presence to an economic presence (so-called “economic nexus” would generate nearly $85 million in 2009-11) and giving the Department of Revenue greater authority over certain business transactions (set to generate $8.5 million in 2009-11). A quick overview of the proposed tax increases is available here.

One additional side note: The budget and tax deal announced today includes a $1.2 million appropriation to the Department of Revenue to begin preparations in 2011 for implementing the Working Family Tax Credit in 2012. This as-yet unfunded program championed heavily by Senate Majority Leader Lisa Brown, D-Spokane, stands to cost the state at least $100 million annually. The program returns a portion of the state retail sales tax to about 350,000 households in our state that qualify for the federal earned income tax credit.

AWB remains opposed to both the tax package and the budget (SB 6444), which is unsustainable and relies heavily on tax increases that will burden employers, threaten job creation and adversely impact working families. For more information on tax and fiscal issues, contact AWB’s Amber Carter.


Jobs Act, Capital Budget don’t meet fiscal standard
Members of the Senate Ways & Means Committee held a hearing Sunday on the Jobs Act (HB 2561), sponsored by Rep. Hans Dunshee, D-Snohomish. As proposed, the Jobs Act would let the state issue bonds above the debt limit to make energy efficiency upgrades in public schools, college and university facilities and state government buildings. Voters would have to approve the proposal in November. If they don’t, then the state would make permanent the tax on bottled water, and fund the program with the revenue raised from those sales.

AWB remains opposed to the Jobs Act and the capital budget (ESHB 2836) for multiple reasons, but primarily because better fiscal management over time would have averted the need for new bonds. Traditionally, the capital budget allocations have funded permanent fixtures — such as buildings — and not short-term maintenance. AWB believes this is an inappropriate use of capital budget dollars and questions the impact of the program in the short term. Had lawmakers left the capital budget intact and not raided it to cover for general fund losses, the state would be in a better position to fund projects.

Interestingly, the House version of the capital budget, ESHB 2836, retained language reducing vehicle miles traveled (VMT). Today, the Senate Ways & Means Committee striking amendment to the bill appears to have eliminated this provision (as of this writing). The full Senate has not yet voted on the capital budget. AWB opposes policies that reduce vehicle miles traveled. The language in Sec. 1016 (2)(a)[Dept. of Commerce] of the House version of ESHB 2836 imposed additional hurdles and challenges on local governments and private investors to receive public works grant money. This flawed policy will stifle economic development and job creation at a time when we need it the most. Instead, AWB encourages the state to create incentives for people to make responsible transportation choices rather than trying to mandate a per capita reduction in VMT. Moving towards plug-in electric vehicles is a good example of the kind of progressive solutions to the problem that we should be pursuing without mandates that would hurt our economy further. For more on VMT, contact AWB’s Chris McCabe.


Legislature OKs bill forcing state employees to take unpaid furloughs
Unpaid furloughs for state employees are now the rule since the Senate passed SB 6503, sponsored by Sen. Margarita Prentice, D-Renton. Approved on Friday, the bill reduces spending by some $45 million from the state’s general fund and another $75 million from other funds. It now awaits the governor’s signature. For more information, contact AWB’s Amber Carter.


Eighteen states now suing to stop federal health-care mandates
A growing number of states are saying no to the federal health-care overhaul. Eighteen states, including Washington, are now on board with a lawsuit challenging the legality of forcing individuals to purchase insurance. In addition to challenging the individual mandate, the suit claims the health-care bill violates the Constitution’s 10th Amendment by imposing unfunded mandates on the states. For more information, contact AWB’s Donna Steward.


New Moses Lake BMW/SGL plant welcome news in Washington
Good news for Washington’s economy: SGL Group, a leading manufacturer of carbon-based products, and the BMW Group, a global manufacturer of automobiles and motorcycles, announced a partnership last Tuesday to produce carbon fibers for its Megacity electric car, expected to reach the market in the next few years. Among the reasons BMW and SGL chose Moses Lake: cheap and plentiful hydropower. AWB President Don Brunell, described the new plant as “a bright spot in what has been an otherwise challenging economic time. It is, however, important that we protect and enhance the business conditions that led SGL and BMW to select Washington state. We hope this is just the first of many more positive economic announcements to come.”


With federal spending skyrocketing, could a national VAT tax be around the corner?
One of President Obama’s economic advisers, former Federal Reserve Chairman Paul Volcker, thinks a national value added tax (VAT) would be a great remedy for the overextended federal budget. Volcker also suggested that carbon or energy-related taxes may be necessary to balance the federal budget."If at the end of the day we need to raise taxes, we should raise taxes," said Volcker. VAT taxes, like those in Canada and Europe, are an additional tax added by retailers on goods and services. More evidence that Congress needs to start focusing on controlling its spending rather than hitting consumers at a time when the economy is struggling to bounce back.


AWB responds to FEMA’s national floodplain maps and draft model ordinance
The Federal Emergency Management Agency’s newly proposed national floodplain maps and draft model ordinance are bad news for business. These measures will devastate businesses located in designated floodplains. This approach will add myriad new development regulations and expensive new flood protection measures, such as increased costs of flood insurance, all of which will cost jobs and stifle economic recovery and development in some of Washington’s most important commercial and industrial areas. Now is not the time to add these new unwarranted burdens to Washington’s already struggling economy. Read AWB’s response to this proposal. For more information, contact AWB’s Chris McCabe.


E-Cycle Washington hits new electronic recycling record
March 2010 saw 3.84 million pounds of unwanted TVs, monitors and computers come into the E-Cycle Washington program.This is the largest one-month volume since the program began in 2009. The cumulative total for the first three months of 2010 is 9.58 million pounds – slightly higher than the 9.12 million pounds for the same time period in 2009.AWB supported the 2004 legislation that put the program in place. Manufacturers of electronic products pay for E-Cycle Washington by embedding their costs into the prices of their products. For more information, contact AWB’s Grant Nelson.


KEY HEARINGS, MEETINGS
Energy Committee meeting tomorrow
AWB’s Energy Committee will meet tomorrow from 9:30 – 10:30 a.m. at AWB. On the agenda: A look at projects pending before the Energy Facility Site Evaluation Council; a staff overview and discussion of HB 2658, the Department of Commerce reorganization bill (HB 2658) and the effect on state energy strategy resulting from Gov. Gregoire’s veto of Sec. 404; and a brief presentation on the Columbia Generating Station. For more information, contact AWB’s Chris McCabe.


Focus on 1-1082 at next Worker’s Comp Coalition meeting, April 19
Initiative 1082, a measure to provide a private option for industrial insurance, is on top of the agenda at the next Workers’ Comp Coalition meeting on Monday, April 19 from 1:30 – 3:30 p.m. at AWB. We will also review the 2010 legislative session. For more information, contact AWB’s Kris Tefft.


OTHER NEWS
Car crash closure doesn’t stop Dick’s Drive-In
Even after a speeding Ford Explorer SUV crashed into the front counter of the Lake City Dick’s Drive-In, shutting the restaurant down for 11 days, all crew members received full pay and benefits. Read more about this remarkable story on AWB’s Member Spotlight. If you have good news to share about your company, contact AWB’s Paul Schlienz.


GoGreen conference aimed at helping businesses become more sustainable
GoGreen ’10, a one-day sustainability conference on Wednesday, April 21 in Seattle, will feature more than 45 speakers and 12 different sessions aimed at helping business owners “go green.” Attendees will hear first-hand success stories and join in panel discussions offering turnkey solutions useful to any size business. AWB is a media partner for the conference and AWB members who attend will receive a discount; use the discount code “AWB” when registering. The conference is Wednesday, April 21, 8:30 a.m. – 4:30 p.m., at the Olive 8 at The Hyatt, 1635 8^th Ave., Seattle. To register online, visit GoGreen Seattle.


City of Kent offers ways to reuse sand, get rid of sandbags
Now that the official 2009-10 flood season has ended, some people may be looking for ways to get rid of sandbags for the summer. While the sandbags won’t last until the next flood season, there are ways residents can save the sand for fall or use it for gardening and home improvement projects. For Kent residents unable to keep the sand onsite through the summer, the city will collect the sand and sandbags each Saturday in April, 9 a.m. – 3 p.m., at Home Depot (26120 104^th Ave. SE, Kent) and Grandview Park (3600 S 228^th St, Kent). Assistance is available at 206.755.4814 or kentserviceclubs@yahoo.com. Businesses are not allowed to dump sand at these sites, but they can find additional resources and potential disposal sites at www.kingcounty.gov/floodplans. Non-Kent residents should contact their local emergency management office for sandbag disposal options in their area.


Reminder: April is Disaster Preparedness Month in Washington
Does your business have plans to participate in the drop, cover, hold drill on Wednesday, April 21, 9:45 – 10 a.m. Visit the Emergency Management Division’s (EMD) In Focus to learn more about activities you can do in your workplace to improve your disaster preparedness. For more information, contact Rosanne Garrand at 253.542.7419. There is also a simple yet valuable resource at the EMD Business Portal available for small and medium businesses that need help initiating a meaningful disaster response and/or continuity plan.


Win $10,000 for your small business with Office 2010 video contest
Any business with seven or fewer full-time employees in Washington state is eligible to enter the Greater Seattle Chamber of Commerce and Microsoft Corporation’s “It’s Time for Business with Office 2010 Video Contest. Participation is easy. Download a FREE trial version of Office 2010 and use it in your business. Then create a short video about your positive experience with Office 2010. Finally, complete the video contest submission form at ItsTimeForBusiness.com before Thursday, April 22. Submissions will be judged on five criteria: originality, creativity, concept, information, and overall presentation. Prizes include $10,000 (Best Video/Grand Prize Winner), $1,000 (Best Foreign Language Video) and $1,000 (Best Video by a Woman-Owned Business). No purchase is necessary but participants must meet all contest rules and eligibility requirements. Click here for more information.


AWB EVENTS & RESOURCES
Employee handbooks and personnel policies: Are you in compliance?
Given the growing legal and practical importance of personnel policies in today's workplace, many employers are turning to the use of employee handbooks to implement and communicate the details of the employer/employee relationship. A carefully prepared and customized handbook can be an employer's biggest weapon against labor and employment litigation, if properly crafted and utilized. This seminar on Tuesday, May 4, from 8 a.m. – noon at the Holiday Inn Seattle-SeaTac Airport (17338 International Blvd., SeaTac) will offer helpful advice on what to include in your employee handbook so that you can maximize communication and minimize your liability. For more information, contact AWB’s Jodi Martinez.


AWB Spring Meeting is May 11 – 12
Join us for our annual spring meeting at the historic Davenport Hotel in Spokane May 11-12. Keynote speakers include Dr. Elson Floyd, president, Washington State University; David Allen, executive vice president, McKinstry Co. and Dr. Arun Raha, executive director of the Washington State Economic and Revenue Forecast Council. The event also features a panel discussion on health-care reform and the presentation of AWB’s annual Community Service and Environmental Excellence Awards. As part of the afternoon program on May 11, AWB government affairs staff will lead issue discussions and reflect on the 2010 legislative session. Register online or contact AWB’s Jodi Martinez.


Reminder: We need your nominations for AWB Board
AWB is seeking nominations for its board of directors. Please send the name and contact information of your nominee(s) to Dick Walter, AWB vice president of operations, by Friday, April 30.


Washington Small Business Forum on Friday, May 14
You are invited to attend the Washington Small Business Forum on Friday, May 14 from 9 a.m. – noon at Bellevue City Hall. Agencies and organizations that participate find valuable information, opportunities to network and a valuable exchange of ideas. The Internal Revenue Service and the City of Bellevue’s Office of Economic Development will host the forum. Speakers include: Lincoln Ferris, vice president of the Washington Association of Small Business Incubators; Ashley Zanolli and Wallace Reid, from the Environmental Protection Agency, who will talk about new EPA rules and their impact on small business, and Kari Gilje, of the IRS, who will give an overview of the provisions of the new Hiring Incentives to Restore Employment Act. To register, contact Kari Gilje at 206.220.5469.


New credit card payment processing program offers immediate savings over traditional options!
AWB is pleased to announce an exclusive partnership with Fast Transact, Inc. and an exciting new program for merchant services and credit card processing. As a preferred merchant, you can benefit from savings and customizable options that fit your business needs. Visit us online or call 800.687.8505, ext. 156, for your free analysis. Be sure to mention that you are an AWB member.


THEY SAID IT
“When the epitaph on the 2010 session is written, it will be noted that lawmakers missed a big opportunity to make significant changes in the way the government operates. Employee contract changes should have been addressed because of the huge effect such adjustment would have on future budgets. For now, lawmakers must live with the fact that sheer stubbornness on the sales tax cost state taxpayers more than $175,000.” – Seattle Times editorial


This Week's President's Perspective: Hydropower is key to Washington’s future