May 6, 2019
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A deeper look at the legislative session



With the Legislature moving briskly to pass its budget just moments before a midnight adjournment, there was only time for a quick look at the finances surrounding the biggest-ever state budget. Analysts are looking more closely at the budget over recent days.

KREM reports on "How the new Washington state budget will affect your taxes." It lists these taxes likely to affect the average Washington resident:

  •  A graduated real-estate excise tax
  •  A tax on all vapor products, even those without nicotine
  •  A tax on travel agents and tour companies.

Other tax increases and changes are also attracting attention.

A last-minute tax bill hit large banks with an increased B&O tax, increasing the rate to 2.7% from the current 1.5% on large financial institutions. Another bill will see the total tax rate increase to 3% for these financial institutions.

The idea for this tax increase had not been discussed or introduced earlier in the session. House members passed the measure at 4 a.m. Saturday, only hours after its text was made public, and before the release of a fiscal note about its economic impacts, Crosscut reports.

Good governance advocates said that's a bad way to legislate and disrespectful of the public.

“I think it’s a clear violation of the intent and the spirit of the state constitution, which clearly says that bills introduced in the last 10 days of the session require a two-thirds vote [of the Legislature],” said Toby Nixon, president of the Washington Coalition for Open Government. “And it did not have a two-thirds vote.”

Even some Senate Democrats said that tax increase needed more discussion and analysis.

“I don’t really have a problem raising taxes on big banks, but I thought the process was not good on that particular bill,” said Sen. Guy Palumbo, D-Maltby, who was one of three Senate Democrats who voted no on the legislation.

Retail businesses in border communities are expected to see a hit after the Legislature removed the sales tax exemption for residents of Oregon, British Columbia and other states. Starting in January, the sales tax exemption will be changed to a remittance program for a reimbursement of sales taxes paid over $25 each year. The state expects to collect $53 million more in 2020-21 due to the change. Businesses who sell to shoppers from across state lines say the change came without warning, and will be a major hit.

“It’s going to be devastating for many or the majority of businesses here locally in Southwest Washington,” said Debbie Runyan-Parker, owner and president of Runyan’s Jewelers in Camas.

The Columbian has more on the change, and notes that AWB opposed the removal of the sales tax exemption.

Contact Clay Hill, AWB government affairs director for tax and fiscal policy, to learn more.



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Spring Meeting
Last-Minute Legislating


Spin Control: Doing the budget the way it's always done doesn't make it the best way

By Jim Camden

Legislators are apt to defend their budget process as "this is the way it's always done." If that was a good reason, one might think we would still be hanging horse thieves, placing miscreants in the stocks and throwing debtors into prison for not paying bills, or doing any number of imperfect things we've stopped doing.

In truth, the "always done" defense is only applied by people who do it that way because it suits them.

It suits legislative leaders to hold on to the budget until the very end of the session to have some leverage over hard-to-handle lawmakers. It suits budget writers from each chamber to sequester themselves somewhere away from the madding crowd of colleagues and lobbyists to avoid being pestered for everyone's favorite six-, seven-, or eight-figure project. And then there's always that familiar refrain that negotiators can't speak freely if discussions are in the open, because they might be criticized for suggesting something that doesn't sit well with the folks back home, even if it does break a logjam that leads to the deal.

This process keeps the people and businesses who will pay for all the programs and salaries out of the loop for most of the key decision points...

Read the full column in The Spokesman-Review
Talent and Capital


The Seattle-area economy punches above its weight -- and that's a huge strength

By Jon Talton, The Seattle Times

Newcomers -- and there are many -- might think that the Puget Sound region's economy is so hot because of two Big Tech headquarters, along with the "legacy" power of Boeing.

It's understandable. Amazon and Microsoft are two of the five giants that make up America's technology royalty (Apple, Facebook and Google are in the Bay Area). We're on the cutting edge of software, cloud computing, artificial intelligence and so much more.

Boeing's operations, especially commercial airliners, anchor one of the world's top aerospace clusters (the other being Airbus in Toulouse, France). The company is not only the nation's largest manufacturing exporter, but also, especially with its defense divisions, a strategic asset.

Together, the three employ about 166,000 here in well-paid, high-skilled jobs. Boeing is Washington's largest private employer, with a workforce of 69,830 as of February.

It's hard to think of another similar-sized metropolitan area in the United States with anything close.

But this is only a start in explaining why Seattle-Tacoma-Bellevue enjoys one of the strongest economies in the nation. How strong? Per capita gross domestic product, adjusted for inflation, was nearly $81,000 in 2017. That compares with $61,000 in San Diego and $63,000 in Minneapolis-St. Paul. Larger Phoenix lagged in at $45,000...

Read the full column in The Seattle Times
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