March 18, 2019
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Reports point to a cooling economy, lawmakers should heed business economists' warning

The U.S. Bureau of Labor Statistics reported last week that the economy added 182,000 jobs last month, down from a blockbuster gain of 304,000 in January. That, Opportunity Washington writes, is causing caution lights to flash and is a warning that the economy is cooling. Despite the record-setting tax collections Washington state has realized – up 44 percent over the past decade – three quarters of business economists are predicting a recession in the next two years.

As legislative budget writers prepare to craft a budget with an estimated $50 billion, up from roughly $46 billion in the current budget, Washington State Treasurer Duane Davidson urged lawmakers to use caution and boost the state’s reserves in preparation at AWB’s March 7 Lobby Lunch.

Davidson said Washington is not there yet, but the cyclical nature of the economy all but guarantees a recession. And, he said, “I don’t think right now the state is equipped to face that.”

“Although there’s some disagreement on the timing, the best projections place the coming recession in the middle of the next biennial budget,” Opportunity Washington wrote Feb. 25. “The March 20 revenue forecast will provide lawmakers additional guidance. But it’s clear: sustainability should be a priority. And, we’d add, sustainable budget practice would avoid tax and regulatory policies that would jeopardize economic growth here.”

For more information on tax and fiscal policy issues, contact AWB Government Affairs Director Clay Hill at 360.943.1600.

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Competitiveness Matters

State won 'economic lottery;' it doesn't need new taxes

By Kris Johnson and Steve Mullin

Imagine winning the lottery tomorrow. You'd have $10 million to spend on whatever you wanted in an instant.

Of course, the prudent thing would be to get a financial adviser and plan for the future. Ensure you have a strong foundation and adequate savings, then decide what you can splurge on. This scenario is not unlike the position our state finds itself in after years of economic recovery and expansion.

Economic and tax revenue growth in Washington state has been extraordinary over the last decade.

So much so that state and local tax growth in Washington was the highest in the nation from 2015 to 2016. The state expects tax collections will top $50 billion for the first time during the next two-year budget cycle. That's $4 billion more than the last cycle and nearly $11 billion more than it had in 2015-17.

Washington has leveraged this growth to invest in important programs, dramatically increasing state funding for public education, for example.

But we need to recognize that this lottery-like period of growth is far from normal. And it has come at a time when Washington also steadily increased the cost of doing business here...

Read the guest commentary in The (Everett) Herald
Competitiveness Matters

Former Rep. Chandler: Inslee threat to prosperity

By Charles H. Featherstone in The Columbia Basin Herald

MOSES LAKE -- Gary Chandler has a message for Gov. Jay Inslee.

"Don't take away our opportunity to be competitive."

The drive for 100 percent clean energy would deprive the Pacific Northwest of its competitive edge on power prices, and the governor's proposed $4 billion in new taxes would hit the state's small business people particularly hard, Chandler said.

"The economy is good, but the economy is starting to slow," Chandler said. "Don't spend everything, don't tax everything."

Read the full story about Chandler's recent talk in The Columbia Basin Herald
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