Press Release

Friday, June 30

AWB Statement on State Budget Agreement

OLYMPIA — Kris Johnson, president of the Association of Washington Business, issued the following statement on the 2017-19 state budget agreement:

“It’s unfortunate it took lawmakers until the brink of a government shutdown, but we are pleased they have once again made a significant new investment in K-12 education funding, this time adding $7.3 billion over the next four years. This comes after previous investments totaling $4.5 billion since 2013. Combined, these investments send the message that Washington is serious about improving the quality of education for its students.

“This budget also includes some important elements for employers, including a reduction in the business and occupation tax rate for general manufacturing. The manufacturing sector is vital to the health of the state’s economy, not only through its direct support of high-wage careers, but also through the ripple effect it creates. For every worker in manufacturing, there are another three employees hired elsewhere. Despite this benefit, Washington is a high-cost state for business — employers currently pay 58 percent of all state and local taxes. Lowering the B&O rate for manufacturers provides a welcome measure of relief for employers, particularly small businesses, and will help them compete in a regional, national and global economy.

“We recognize that tradeoffs are required with a closely divided Legislature and unfortunately that means the budget also includes higher property taxes and the removal of some tax exemptions, such as the sales tax on bottled water. We wish lawmakers had found a way to make the needed education investments without these increases, but we appreciate that other proposed tax increases, including a new capital gains tax, a higher B&O tax and a new carbon tax, were not part of the final agreement.

“It isn’t perfect, but this is a fair budget for students and employers. We believe this satisfies the requirements of the McCleary decision and it provides some recognition of the competitive challenges facing employers. We look forward to working with lawmakers in the interim and again next session to find solutions that help create greater economic prosperity throughout Washington state.”

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