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February 16, 2018

AWB tells House committee, 'It's time to let all manufacturers win'

By: Jason Hagey   Comments: 0

AWB President Kris Johnson testified on House Bill 2947, regarding the B&O tax rate on manufacturers, on Feb. 16, 2018. He is joined at right by Harry Ross of Cascade Designs, a Seattle manufacturer of outdoor recreational equipment. (Photo: Brian Mittge/AWB)

AWB President Kris Johnson called on lawmakers to lower the business and occupation (B&O) tax rate for all Washington manufacturers, not just those in some parts of the state, during a hearing Friday before the House Finance Committee.

In its current form, Substitute House Bill 2947 would lower the B&O rate for manufacturers in 30 counties. It would leave out nine counties, including many that consist largely of rural areas, such as Kitsap and Benton.

“It’s time to let all manufacturers win,” Johnson said, echoing language that Rep. Gael Tarleton, D-Ballard, used during a floor speech last week on a separate measure aimed at boosting Washington’s boat manufacturers. “We’re going to let our fishing fleet win,” Tarleton declared before the House voted 97-1 in favor of her bill.

Rep. Mike Chapman, D-Port Angeles, and Jacquelin Maycumber, R-Republic, co-sponsors of the original version of House Bill 2947, credited AWB’s Rural Jobs Summit in October for planting the seed for the legislation.

“After that summit, where there were a lot of great arguments made for assisting rural manufacturers, we started talking,” Chapman said. The legislators worked with staff on several iterations and produced a bill.

Maycumber said the goal of the bill wasn’t to pit urban Washington against rural Washington, but rather to help Washington state compete with other states and the rest of the world.

During his testimony, Johnson noted the bill would exclude 5,614 manufacturers in nine counties. Of the 11 members of the House Finance Committee, only two represent districts that would fully benefit from the bill.

Testifying with Johnson were Dave Gering, executive director of the Manufacturing Industrial Council, and Harry Ross, human resources director at Cascade Designs, a Seattle-based manufacturer of outdoor products. They agreed that any B&O reduction should apply to manufacturers in all of Washington.

“If you’re looking at this strategically for manufacturing, you need to do the entire sector,” Gering said.

Ross said his company has been based in Seattle since 1972, and he hopes it can remain there.

“So, I guess our request is that you will look at this to apply to manufacturers throughout the state,” Ross said. “Manufacturing is not easy, even in the urban environment, especially with wages going up.”

In fact, data from the Washington Research Council shows that manufacturing employment is down 14.2 percent statewide since 2000, compared to other sectors showing strong growth. Manufacturing jobs in urban areas have declined more than manufacturing jobs in rural areas, according to the data, underscoring the need to support manufacturing as a whole.

“We’re competing not against anybody in Washington or anybody in the United States, but we’re competing against the world,” Ross said. “We would like to stay here and do that.”

Rep. Noel Frame, D-Greenwood, vice chair of the committee, sponsored the substitute bill that was the subject of Friday’s hearing. During questioning from the committee, Frame asked Johnson about why AWB wasn’t supporting a bill that sought to assist manufacturers in rural communities.

“We’re very proud of the work AWB has done on rural jobs,” Johnson replied, noting that many of the lawmakers on the committee participated in one or both of AWB’s Rural Jobs summits. “This shouldn’t be a one or other issue. This should be about both.”