TOP STORIES
Legislature convenes 2012 session facing $1.5 billion budget shortfall, contentious
social issues
Lawmakers returned to Olympia today for the start of a 60-day legislative session that once again presents them with a daunting budget challenge: How to close a roughly $1.5 billion shortfall. Taxes figure to be a major part of the discussion. Gov. Chris Gregoire, who wants to ask voters to approve a temporary sales tax hike, is bypassing the attorney general’s office and working with outside counsel to push for a court ruling on the constitutionality of Initiative 1053, the AWB-led measure requiring a two-thirds vote of lawmakers to raise taxes. Meanwhile, a pair of lawmakers is proposing to do away with the business and occupation tax and replace it a 1 percent income tax, an idea that AWB President Don Brunell predicts will be a hard sell. It isn’t clear when lawmakers must agree on a tax package in order to get it on a spring ballot, in part because of the election calendar, and it’s even less certain that a tax hike would resolve the state’s long-term budget woes. The business community has been calling on leaders for years to stop spending more money than the state takes in, and the point was emphasized last week in a new report from the Washington Roundtable. Lawmakers must adopt a sustainable budget, the report states, that includes adequate reserves and prioritizes services that will drive economic recovery and growth – namely, education and infrastructure. The GOP is expected to make the first move, with Rep. Gary Alexander, R-Olympia, introducing a proposal to bridge the budget gap without a general tax increase.

Although the budget is the only piece of business lawmakers are required to tackle, a number of controversial social issues have also emerged, including gay marriage, which Gregoire now supports, and medical marijuana. This is also the year that lawmakers will be crafting Washington’s first health exchange, a process that AWB will be watching closely. State exchanges are a key part of the federal health care overhaul and if Washington’s is not done correctly, it could put the individual private market at risk. Gov. Gregoire will deliver her final “State of the State” address tomorrow at approximately 10:30 a.m.; watch the event live via TVW.

Gregoire proposes B&O tax streamlining
Gov. Chris Gregoire called attention to her plan to streamline business and occupation tax collections last week by making it the centerpiece of a strategy aimed at helping spur small business growth. Specifically, Gregoire wants to make the state the single collector of all local and state B&O taxes, similar to how sales tax collections are handled. AWB supports the idea, which would remove a costly layer of bureaucracy for small businesses, but it’s not popular with some of the state’s larger cities, which fear they will lose money.

Last chance to register for AWB Legislative & Lobby Days, Jan. 17-18
Make your reservation today to confirm your spot for AWB’s Legislative & Lobby Daysnext week. Our two-day event is happening earlier in the legislative session, and it is nearly sold out. The program starts Jan. 17 with Legislative Day, an event featuring panel discussions with legislators talking about the budget and taxes, energy, labor and workforce and education issues. Gov. Chris Gregoire is our 2012 Better Workplace Awards lunch speaker. The day culminates with our legislative reception, a premier event that will bring legislators and business leaders together at the Red Lion Hotel in Olympia. Then join us the next morning for Lobby Day as we travel to the Capitol to meet directly with legislators. They need to hear directly from employers about how their decisions impact business, so please consider making time for this event. Go online and register today – and make sure you secure a hotel reservation before rooms sell out. Thank you to generous AWB sponsors for their support this year. More than 70 members have contributed to the event. A special thank you to our Platinum Sponsors, BP, Cascade Natural Gas Corporation and Schnitzer. Thanks also to our Better Workplace Awards sponsor Davis Wright Tremaine. Contact Anne Haller at 800.521.9325 for more details.

Gubernatorial, AG debates scheduled for AWB’s June 12 Spring Meeting in Spokane
AWB announced last week that we are partnering with Greater Spokane Inc. to host gubernatorial and attorney general debates June 12 at the Bing Crosby Theater in Spokane. The AWB debates, which date to 1992, are normally held in September at our Policy Summit, but are being held during our Spring Meeting this year due to changes in the election process. Austin Jenkins, a political journalist for the Northwest News Network, will moderate the debate between the two governor hopefuls, U.S. Rep. Jay Inslee and Washington State Attorney General Rob McKenna, as well as a separate debate between attorney general candidates Reagan Dunn and Bob Ferguson. Although AWB has been talking about the debates with all of the candidates for weeks – and they were aware that we needed to schedule the event – the announcement prompted Inslee’s campaign staff to raise doubt about whether the congressman will attend.

AWB Friday Phone Briefings are back!
Join us this Friday, Jan. 13 at 7:30 a.m. for our first AWB Friday Phone Briefing of 2012, a 30-minute review of the week in Olympia and a look ahead to the next. Each week throughout the session you’ll hear from AWB staff and special guest speakers about what’s happening in the Legislature and what AWB members can do tohave an impact. This week’s call will largely review the budget, AWB’s legislative priorities and what lawmakers must accomplish in this 60-day supplemental session. Listeners will also have a chance to ask questions about legislation or other policy issues. Register online for this Friday’s call; a confirmation email will be sent to you and reminder emails will alert you in the days leading up to Friday’s call. Questions? Contact Jocelyn McCabe, AWB vice president, communications at 360.943.1600.

AWB Lobby Lunch resumes Jan. 19
Mark your calendars for Jan. 19, the date when AWB’s weekly Lobby Lunch series resumes. Plan to join us then and each Thursday throughout the session for timely, informative updates from key players in the legislative process, beginning with Gov. Chris Gregoire, who has been invited to speak at this year’s first meeting. The lunch meetings begin at noon in AWB’s Large Conference Room.

Supreme Court finds state has failed to fully fund public education
The Washington State Supreme Court ruled last week that the state has failed to meets its constitutional obligation to “amply” fund basic public education. The 84-page ruling, summarized by Justice Debra Stephens, gives lawmakers some credit for moving in the right direction with a 2009 reform package, but nevertheless found the state has not complied with the constitution’s requirement “to make ample provision for the education of all children in Washington.” The justices said they will defer to the Legislature until 2018 to give time for lawmakers to fully fund the reforms.

Gonzalez joins Supreme Court
Steven Gonzalez officially joined the Washington State Supreme Court this morning with a swearing-in ceremony at the Temple of Justice. He was appointed in November to replace Justice Gerry Alexander, who retired at the end of the year due to the court’s age limit. Gonzalez was a King County superior court judge, and previously worked as an assistant U.S. attorney and assistant city attorney in Seattle.

Washington stands to gain some jobs, lose some jobs in Boeing moves
The Boeing Co. announced last week that it plans to close its plant in Wichita, Kan. by the end of next year as a result of cuts in defense spending. The company said it will move about 200 jobs to its Everett factory as part of the move, but it will move also send about 100 support jobs from Washington to Oklahoma City, the Associated Press reported.

Obama invites legal challenge with appointments to consumer bureau, NLRB
President Barack Obama’s moves last week to install Richard Cordray as head of the Consumer Financial Protection Bureau last week and appoint three new members to the National Labor Relations Board may end up in court. Republicans in Congress sought to block the president from making recess appointments by convening a series of pro forma sessions, but the Obama administration moved ahead with the appointments. The U.S. Chamber of Commerce said it was considering a lawsuit over the controversial decision, which it claims are unprecedented and constitutionally questionable.

Prentice will retire from Senate following redistricting
Sen. Margarita Prentice, D-Renton, said she will retire from the Legislature at the end of her term rather than run for re-election in a new district. Prentice, 81, told The Seattle Times she has been thinking about retiring for a while, but the redistricting plan — which removes her from the 11th District into Sen. Adam Kline’s 37th District — “made it very clear.” Prentice was first elected to the state House of Representatives in 1988 and won election to the Senate four in 1992.

Anderson makes it official, declares he is running for lieutenant governor
Rep. Glenn Anderson has officially announced his campaign for lieutenant governor, joining Bill Finkbeiner, the former Senate majority leader from Kirkland, and Clifford Mark Greene of the Party of Commons in challenging four-term incumbent Brad Owen. So far, Owen is the only candidate reporting campaign contributions, The Olympian reported.

Shelly Schlumpf announces run for House
Republican Shelly Schlumpf of Puyallup has announced her run for the state House of Representatives. Schlumpf is seeking to replace Rep. Bruce Dammeier, R-Puyallup, who is leaving the 25th District seat in order to run for the state Senate.

Earl Hale joins The Olympian editorial board
The Olympian has named Earl Hale, former executive director of Washington State Board for Community and Technical Colleges, as one of two community representatives on its editorial board. Hale, who consults with AWB on higher education and workforce policy issues, will serve for one year.

Department of Ecology extends comment period on fish consumption, water quality
report
The Department of Ecology’s report, “Fish Consumption Rates Technical Support Document: A Review of Data and Information About Fish Consumption in Washington,” may play an important role in determining the cleanup standards for Washington’s fish, and shellfish-producing waters. Ecology says new data indicates people eat more fish than previously thought. The amount of fish eaten determines water quality and cleanup standards and therefore whether new controls, restrictions or rules are necessary. The comment period on the draft document was scheduled to end on Dec. 30, but at the request of several interested parties, has been extended to 5 p.m. on Jan. 18. Comments may be emailed to fishconsumption@ecy.wa.gov.

Deadline extended on Puget Sound Partnership draft Action Agenda, AWB meeting set
The comment period on the Puget Sound Partnership’s recently released the Draft Action Agenda has been extended to Feb. 3. AWB staff will be working the AWB Puget Sound Partnership Subcommittee to develop written comments. Members can help by providing comments to AWB staff as early as possible. Please send comments to AWB’s Brandon Houskeeper.

KEY HEARINGS, MEETINGS
AWB Health Care Committee meeting Wednesday
AWB’s Health Care Committee will meet on Wednesday at 10 a.m. at the AWB office in Olympia.Agenda items will include an overview of the first formal exchange board discussion, legislation further defining the exchange board, and bills of interest to the committee.The Health Care Committee will meet every three weeks during session. Meeting dates through March include Feb. 1 at 10 a.m.; Feb. 22 at 10 a.m.; and March 14 at 10 a.m. Ad hoc meetings will be scheduled if needed to address emerging issues so please watch closely for additional meeting announcements throughout session. For more information, please contact AWB’s Donna Steward.

AWB Education and Training Committee meeting Thursday
The AWB Education and Training Committee will meet on Thursday at 3:30 p.m. at the AWB office in Olympia.Agenda items will include a presentation from the Center for Children and Youth Justice on Washington’s BECCA truancy law, overview of committee member school visits and discussion of K-12 legislation of interest to the committee. For more information, please contact AWB’s Donna Steward.

AWB Unemployment Insurance Committee meeting Friday
The AWB Unemployment Insurance Committee will meet on Friday at 10 a.m. at the AWB office in Olympia. Agenda items will include follow-up to the conformity issue from December, department request legislation in response to changes in federal law, and any additional UI legislation introduced for the session. For more information, contact AWB’s Donna Steward.

AWB Climate Change Committee meeting Jan. 16
AWB’s Climate Change Committee will meet Monday, Jan. 16 from 9-10 a.m.in the Large Conference room at AWB’s office in Olympia. Committee agenda items will include a discussion of climate related legislation (SB 5999andSB 6013), as well as a possible update on implications of the recent federal court ruling on the state’s implementation and application of greenhouse gas RACT standards. For more information, contact AWB’s Brandon Houskeeper.

AWB EVENTS & RESOURCES
AWB Spring Meeting set for June 12-13 in Spokane
Save the date: AWB’s Spring Meeting will be held June 12-13 in Spokane. The meeting, which is normally held in May, is being pushed back next year so it can include a gubernatorial debate and AWB’s endorsements for governor and attorney general. Those activities have historically occurred at AWB’s Policy Summit in September. Interested in becoming a Spring Meeting sponsor? Contact AWB’s Anne Haller today.

New, low cost 401(k) program for AWB Members!
AWB is pleased to announce a new member service, the BenefitGuard 401(k) Plan. You don’t need to be a Fortune 500 company to have benefits like one! The plan is full-service and low cost and can be tailored to your company’s specific needs. The plan takes care of all the paperwork, plan audit and IRS filings so that your time is spent taking care of your business. To find out how to take advantage of this powerful retirement plan option, please call us toll free at 866.670.4015 or go to http://www.awbbenefitguardplan.com/.

THEY SAID IT
“For Washington businesses, especially small businesses owners who operate with little help, paying state and local B&O taxes is at best complicated and at worse a nightmare.” ~ Gov. Chris Gregoire, announcing her proposal to streamline B&O tax collection

This Week's President's Perspective: It’s the Economy