President's Column

Monday, April 2

Legislature adjourns on-time, leaves important work for 2019

Lawmakers left town on the final day of the constitutionally-prescribed 60-day session March 8.

Like every session, there were hits and misses.

Early in the legislative session, lawmakers reached a bipartisan agreement for a permanent fix to the state Supreme Court’s “Hirst” water rights ruling and passed the state’s capital construction budget. These were issues left undone during the prior session and both issues are crucial to economic development, particularly in rural and underserved regions of the state.

We also appreciated the Legislature’s continued investments in education to meet the state Supreme Court McCleary education funding ruling. However, it remains to be seen how those investments — made through an unusual budget move that lessens our rainy-day reserve account — impact future budgets.

These, and a couple other measures to address workforce development, are positive outcomes that will benefit communities and families across Washington.

However, we are disappointed legislators did not do more to support the state’s manufacturing sector, which is losing ground to other sectors, including government.

We saw firsthand during our fall Manufacturing Week bus tour that stopped in cities from Seattle to Spokane and small towns from Colville to Prescott, that manufacturing is an economic engine in every county.

Growing the manufacturing job base to move more families into the middle-class isn’t a rural or urban issue; it’s a Washington state issue.

Lawmakers realized that last year with a strong bipartisan vote to give the entire manufacturing sector business and occupation (B&O) tax relief as part of the budget deal. It’s a move that made the B&O tax rate uniform across all manufacturing operations and benefitted roughly 12,500 small- and medium-sized manufacturers.

Undone by the governor just after session, lawmakers revisited the tax relief this year.

A House bill introduced this year to reinstate the tax relief was a good start, but it would have offered relief to only 30 of the state’s 39 counties. That simply didn’t make sense. It puts legislators in the position of picking winners and losers and it’s unfair to exclude some employers by virtue of where they are located.

A Seattle-based manufacturer who was excluded from the bill testified before the House Finance Committee about how a reduced B&O tax rate would allow for additional investments in the urban factory and why the bill should be amended to include manufacturers statewide.

We believe the tax relief should have been looked at holistically as the economic equalizer for hands-on, high-tech manufacturing workers across the state to move up the economic ladder. That’s why we told committee members that with a small tweak to add the nine counties into the bill, it would be a win for all Washington manufacturers.

Unfortunately, reinstatement of the manufacturing B&O tax relief was pushed to 2019.

Some good work was done over the two-month session, but we hope the next Legislature finds a way to support Washington’s manufacturing sector.

AWB will continue to work alongside legislative and community leaders to be a unifying voice for economic prosperity — and policies that create it — for the entire state of Washington.

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