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January 31, 2019

New format and location for Hill Climb help employers 'be heard' in Olympia

By: Andrew Lenderman   Comments: 0
AWB members meeting with Sen. Mark Mullet, D-Issaquah, about business, transportation and other issues as part of the Hill Climb portion of the 2019 AWB Legislative Day & Hill Climb on Jan. 29, 2019. (Photo: Brian Mittge/AWB)

Washington employers converged on the Capitol in Olympia Tuesday to tell their story directly to state lawmakers at AWB’s 2019 Legislative Day and Hill Climb.

Topics ranged from budget and taxes to rural jobs, better broadband, smart transportation investments and more.

The context is critical. State government has record tax collections of about $50 billion, thanks to a growing economy. Despite the growing budget, the governor and many lawmakers are proposing new and higher taxes.

“AWB members have a story to tell,” Dave Hamilton, president of Delivery Express said Tuesday. “I think when we tell our story it resonates, and loudly.”

Growing state budget

This year’s event featured a new format to focus on more quality time with lawmakers and working lunches on the Capitol campus.

In one of the sessions, Sens. Mark Mullet, D-Issaquah, and John Braun, R-Centralia, led a discussion on the future of the state budget.

They both expressed concern with the governor’s budget proposal, which includes a proposed 9-percent capital gains tax, a 67-percent increase in the B&O tax rate for service businesses, and an increase in the real estate excise tax.

AWB has consistently advocated for a balanced state budget within current tax collections of about $50 billion. That’s more than the current state budget, which is about $44 billion, and almost double the 2009-11 state budget.

And much of those record revenues come from successful Washington employers, risk-takers and entrepreneurs who create the jobs that sustain families and communities across the state.

Braun said he’s been encouraged by the preliminary budget deliberation process so far with the Senate Ways & Means Chair, Sen. Christine Rolfes, D-Bainbridge Island, and he’s working with his Senate Republican caucus to make it easier for the majority to craft a budget without additional revenue if that’s the direction they choose to take.

Transportation

About two dozen business leaders met with Sen. Steve Hobbs, D-Lake Stevens, who chairs the Senate Transportation Committee. Hobbs is now conducting work sessions and meetings to gauge support for a transportation funding package, and gather feedback about what projects should be included and where the money should come from.

His proposal, not yet in bill form, would prevent the creation of a low-carbon fuel standard, a move AWB members support.

Hobbs told AWB members there is a backlog in infrastructure needs, from preservation and moving up the timeline for the State Routes 167 and 509 gateway to streamlining freight movement to the Port of Tacoma.

“I’m taking a lot of risk,” Hobbs said about his openness to put a transportation package on the table, particularly with a possible carbon fee included as part of the discussion. “That’s just my nature,” he said.

Sen. Hans Zeiger, R-Puyallup, joined Hobbs at the roundtable lunch discussion.

“I was a big proponent of the 2015 transportation package,” Zeiger said. “It was a great bipartisan triumph. I will look for that same collaboration on any other transportation package we consider.”

But, he said, there is what he calls “tax fatigue” right now with increased car tab fees and talk of increasing the B&O tax and creating a capital gains tax. Anything proposed would need public engagement and open communication.

The next steps for Hobbs’ proposal are to meet with Senate leaders and Transportation Committee members, gather ideas for language, draft a bill that includes that input and see who signs onto the bill, he told the group.

A hearing would be scheduled later this session if there is sufficient support in the Senate to move forward.

Employment Law

Another group of employers met with Sens. Karen Keiser, D-Kent, and Curtis King, R-Yakima, to discuss some of the top employment law and workplace issues. Rep. Gina Mosbrucker, R-Goldendale, also joined the discussion.

Keiser said the workplace is changing, prompting lawmakers to grapple with issues like independent contractor rules, non-compete agreements and worker scheduling — known either as predictive scheduling or restricting scheduling, depending on one’s point-of-view.

The issues can be controversial. A bill that Keiser sponsored this year dealing with independent contractor status for hair dressers drew more than 2,700 hair dressers to Olympia on Monday to testify against it, arguing that it threatened their way of life.

Many employers in the room also expressed concern about worker scheduling, telling Keiser and King that they often can’t predict scheduling needs far enough in advance to comply with proposed rules. The shipping and hospitality industries are among those that would be particularly hard hit, they said.

“I’m hearing from those people that this does not work,” said Verlynn Best, president and CEO of the Greater Yakima Chamber of Commerce.

Legislative leaders address AWB Board

Later in the day, state government’s top leaders addressed AWB’s board members.

Gov. Inslee’s chief of staff, David Postman, kicked off the discussion and talked about the three tax proposals with a packed room.

“We know that that’s not all going to happen this year," he said. "We know the governors’ budget, I would say, is the high water mark both on the side of revenue and on spending. And that’s the way it almost always is.”

Capital gains came up again later in a conversation with Democratic leaders, with employers expressing concern about how it might impact the transfer of a family business to the next generation.

Rep. Larry Springer, D-Kirkland, said the notion of whether the capital gains tax has traction or not remains to be seen, although it has passed the House twice in the past.

He acknowledged the concern, which has been shared by other AWB members as well.

“The impact on real estate investment and business sales as a retirement strategy is what is not adequately addressed in our capital gains proposal so far,” Springer said.

The event ended with a first-ever evening reception in the marble-lined Capitol Rotunda.

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