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Home / Washington Business - September/October 2004 / Election 2004: Think this election doesn't matter? Think again. |
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Election 2004: Think this election doesn't matter? Think again. |
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Written On: September/October 2004 |
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Written By: by Paul Schlienz |
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The 2004 General Election is shaping up to be a pivotal contest for Washington state. Although both Democrats and Republicans are stressing the need for economic growth, voters are being offered strikingly different choices in how to go about achieving this goal.
“Candidates are talking about jobs and investment,” observed Richard Davis, president of the Washington Research Council. “They’re talking about making this state a place where business can feel comfortable locating and expanding.
“That said there are different strategies in play. On one hand, you have gubernatorial candidate Ron Sims’ discussion of changing the tax code to include a personal income tax while reducing or scrapping the B&O or retail sales tax. Other candidates are talking about a total scrub of all the tax exemptions and repealing those that can’t be demonstrated to be effective as a way of creating more money for public investment.”
Taxation is Central Concern to Washington’s Businesses
“Employers in the private sector pay about 54 percent of the state’s tax load, all taxes included,” said Gary Chandler, AWB’s vice president of Governmental Affairs. ”We’re not being competitive when those who provide jobs pay a higher portion of taxes in Washington than in any of the surrounding states.”
Looming on the horizon of 2005 is a potential $1.5 billion budget shortfall that could lead to tax increases, depending on who gets elected in 2004. Pressures to raise taxes could come in the form of spending requests from the Legislature for increased health care costs, the increased funding for pensions, and the financial impact of the state employees’ collective bargaining agreement. In turn, tax increases could slow or even stop Washington’s modest economic recovery.
Taxes, however, are not the only way to plug a budget hole. When Washington faced a deficit in 2003, Governor Locke reacted by adopting the Priorities of Government (POG) model of budgeting, which reduced much spending while preserving essential services. Thus the Legislature was able to avoid raising new business taxes.
“I believe that the potential deficit we’re facing for 2005 to 2007, even though it’s pretty big, isn’t nearly so big as the one we were facing at the beginning of 2003,” observed Irv Lethberg, chief of forecasting for Washington’s Office of Financial Management. “There are a number of ways to deal with a projected deficit. You don’t have to increase taxes, necessarily. If you are going to increase taxes, there are some types of taxes that would have a bigger effect on the economy than others.”
According to Kristen Sawin, AWB’s political director, Washington’s businesses could be impacted in a major way if Olympia’s partisan balance of power were to shift as a result of the 2004 election.
“Of interest to the employer community are regulatory certainty, tax policy and employment rules that make sense,” Sawin stated. “If we end up with something similar to what we have now — a Democrat controlled Governor’s Mansion, a Democrat controlled House and a Republican controlled Senate — I don’t think there’s going to be a great deal of impact on the economy. This would be a stay-the-course scenario.
“However, if there are dramatic changes in either direction — Democrat or Republican — I think there would be significant changes for business.”
While both Democrats and Republicans speak of making Washington more competitive for business, there are significant differences in their approaches.
“The big issue for our agenda would be the budget, making sure that we invest in higher education and training opportunities, but at the same time avoiding putting ourselves into the position where taxes are increased,” Senate Majority Leader Bill Finkbeiner (R-Kirkland) commented on the Republicans’ legislative agenda.
“I have some concern that we’ll continue to have a downturn in the revenue coupled with the increase in services we’ll need for education, especially higher education,” said House Majority Leader Lynn Kessler (D-Hoquiam). “So, we have some problems we need to deal with. If we can do that without raising taxes, great. If not, then we probably have to look at what should we do, what can we do and what will the public be willing to pay for.”
AWB Endorsing Candidates
In response to the critical issues facing Washington business, AWB is endorsing candidates for the Legislature and the Supreme Court. Incumbents who have an 80 percent or better record of supporting AWB’s agenda over a biennium are automatically endorsed. Challengers and legislators who do not have an 80 percent record may also be endorsed, but they will only receive their endorsements after meeting with members and discussing the issues in detail.
“By getting our members more involved in the endorsement process, they’ll get to know who their legislators are,” Chandler concluded. “We’re hoping our members will feel free to pick up the phone and call their legislators when we are pushing a particular issue. Those calls will be more effective because our members will have been in contact with the legislators throughout the campaign.
“Regardless of who controls the Legislature, we will push the issues that are important to the business community. One of the first things we’ll be looking at is missed opportunities, including lawsuit abuse reform, workers’ comp reform and small group insurance.”
Get Out the Vote on November 2!
Go to www.awb.org for more information.
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