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November 1, 2017

Legislative leaders hint that manufacturing tax relief could be reinstated

By: Bobbi Cussins   Comments: 0
Bipartisan, bicameral agreement was reached on reinstating tax relief for the state's vital manufacturing sector at AWB's Rural Jobs Summit held Oct. 23-24 at Big Bend Community College in Moses Lake.

In theory, at least.

Speaker of the House Frank Chopp, D-Seattle, told the standing-room-only crowd he supported the tax relief when it was before the Legislature and would support another pass at it. But, he said, the proposal could use a little retooling to "focus the tax relief on rural areas."

Aside from water issues and the project permitting and regulatory uncertainty, reinstating the business and occupation (B&O) tax relief passed with strong bipartisan support earlier this year as part of the two-year state operating budget agreement took up a lot of the allotted hour.

Hailed by Republicans and Democrats as one way to help Washington's small- and medium-sized manufacturers in rural areas create more family-wage jobs, the tax deal was undone with the stroke of the governor's veto pen.

Since then, legislative leaders, AWB and other groups have asked that the tax relief be reinstated with a two-thirds vote of the Legislature -- something that is required to override the veto -- during a special session of the Legislature this fall.

In a statement released after the governor's veto, AWB President Kris Johnson said, "We should be doing everything we can to support manufacturers. ...We hope the lawmakers who passed this legislation by wide margins in the House and Senate will now act to override the governor’s veto and give Washington’s rural manufacturers the support they need to bring economic prosperity to all parts of the state.”

Chopp was part of the event's legislative leadership panel that also featured Senate Republican Leader Mark Schoesler, R-Ritzville; House Republican Floor Leader J.T. Wilcox, R-Yelm; and Sen. Maralyn Chase, D-Shoreline. Gary Chandler, AWB's vice president of government affairs, served as moderator.

Schoesler told attendees that his caucus "wholly supports the manufacturing tax reduction" and would welcome support from legislative leaders to reinstate it. He also cited the benefits of supporting targeted tax relief like what was done for food processors, which he said led to the recent expansion -- and 150 new jobs -- at Lamb Weston's Tri-Cities-area plant.

Wilcox said the House Republicans supported the tax relief earlier this year and would again if given the chance.

Chase had an altogether different take on the B&O tax.

"I would be in favor of getting rid of the B&O tax, but we would have to replace it with something else," she said.

Based on the comments from the legislative panel, it appears there is an appetite to revisit the issue, either in a special session or during the 2018 legislative session that begins Jan. 8.

TVW posted video of the legislative leadership panel in its entirety.

For more information on tax and fiscal issues, contact AWB Government Affairs Director Eric Lohnes at 360.943.1600.