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TOP NEWS

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Capital gains tax proposal moves forward in the Senate

A bill that would create a new state capital gains tax is moving in the Legislature, headed to a possible Senate floor vote after clearing a key fiscal committee last week. AWB opposes Senate Bill 5096 and other capital gains tax proposals for a variety of reasons, starting with the fact that this new tax is not needed.

The Legislature has enough money to balance the budget without raising new taxes. Last week we learned that Washington is just one of seven states where state tax collections have increased during the pandemic. According to the Pew Charitable Trusts, the pandemic caused a historic drop in state tax revenue in 43 states totaling more than $46 billion. Here in Washington, revenue rose 3.8% during the same period. We believe lawmakers should focus on pandemic recovery and job creation, not raising taxes that aren’t needed – especially a volatile tax on capital gains.

Washington is one of only eight states without a capital gains or income tax. Adding a new tax on income will erode one of the state’s key competitive advantages during a time when the economy is still hurting from the pandemic. Former AWB Board Chair Tim Schauer addressed this and other reasons not to raise taxes with an guest editorial today in the Vancouver Business Journal.

The Seattle Times added its voice to the dissent, saying the bill’s deficiencies are numerous. “Though toned down from Gov. Jay Inslee’s inflated proposal, Senate Bill 5096 amounts to taxation for taxation’s sake in a half-baked attempt to help the state.”

The proposals for a capital gains tax continue to change and move ahead in the Legislature. AWB has a new tracking sheet looking at three different versions of capital gains tax proposals. Contact AWB’s Tommy Gantz to learn more.

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New poll shows little appetite for new taxes

Washington residents are not in favor of new taxes. That’s one of the findings from a new poll AWB conducted through Opportunity Washington, AWB’s joint initiative with the Washington Roundtable.

Only 19% of voters think taxes should be increased – a low level of support that has gone down from the last time we asked that question. And more than 3 in 4 voters say that tax increases should come before voters for approval.

Among other findings:

  • The top issues on the minds of voters right now are economic recovery, putting people back to work and Covid-19.
  • Taxes that would discourage job creation and business expansion are not supported.
  • Voters want a say on tax increases.
  • Voters say this is a better time to reduce taxes to ensure employers survive the pandemic than it is to increase taxes to fund more services.

A majority of voters (56%) oppose a capital gains tax with 41% strongly opposing. And two-thirds believe it is better to cut taxes to ensure the survival of employers than to raise taxes to fund more state services.

The poll findings are consistent with the recent Crosscut/Elway poll, which found 54% opposed to a capital gains tax and little support for taxes in general.

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House Republicans unveil balanced budget with no new taxes

The second legislative budget proposal for 2021-23 was unveiled last week by House Republicans (TVW video). The $55 billion budget, called Real Opportunities for All Washingtonians, funds priorities with no cuts to vital services and no new taxes.

“This isn't a budget that will grow government or serve special interests, it's a proposal that will help people – working families, growing students, vulnerable people, small businesses, and all Washingtonians,” said Rep. Drew Stokesbary, R-Auburn, the lead House Republican budget-writer. Oregon Public Broadcasting and the Washington State Wire covered the GOP proposal.

Among its provisions for small businesses, the House Republican budget proposal would:

  • Replenish the Unemployment Insurance trust fund so employers aren’t liable for mandatory closures or external fraud committed against the state;
  • Offer B&O, property tax and liquor fee deferrals for small businesses so they can stay solvent through shutdowns;
  • Provide temporary B&O tax reductions for hard-hit business sectors, including restaurants and hospitality businesses; and
  • Offer a tourism marketing boost to help accelerate post-Covid-19 recovery.

The proposal follows a Senate Republican budget that likewise funded state operations without new or increased taxes. The Washington Research Council has published an analysis comparing the Senate GOP budget with Gov. Jay Inslee’s proposed budget.

Stokesbary joined Sen. Lynda Wilson, R-Vancouver, the top Republican budget-writer in the Senate, to discuss their budgets with AWB’s “Capitol Focus” in this week’s episode.

House and Senate Democrats are expected to release their budget proposals soon.

Contact Government Affairs Director Tommy Gantz to learn more and get involved.

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Lawmakers: There's plenty of revenue without raising taxes

Sunday's edition of "Capitol Focus" poses tough questions to the Washington Legislature, including: If state revenues have recovered since the pandemic began, why are some still talking about tax increases?

These and other tax and fiscal policies were discussed at length when AWB's Tommy Gantz interviewed state Sen. Lynda Wilson, R-Vancouver, and state Rep. Drew Stokesbary, R-Auburn.

We also discussed state revenue with Emily Makings of the Washington Research Council and Chief Economist Steve Lerch of the Economic and Revenue Forecast Council.

AWB's Amy Anderson connected with officials at Schweitzer Engineering Laboratories, where Vice President of Security Frank Harrill has overseen several vaccine clinics -- another example of Washington employers stepping up in the pandemic.

Watch the full episode and sign up for show reminders here.

Capitol Focus will air online every Sunday at 7 p.m. through April 25. The focus is on the 2021 legislative session and the big challenges faced by employers, from vaccine distribution to capital gains tax proposals and more.

Contact Carly Michael at CarlyM@awb.org or 360.943.1600 to learn more about sponsorship opportunities.

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Employers should look for revised Unemployment Insurance tax forms this week

The Employment Security Department will send revised Unemployment Insurance (UI) tax notices out to all employers this week to reflect revised lower tax assessments from a relief measure passed by the Legislature and signed into law by the governor earlier this month.

Employers should pay this new UI tax bill, not earlier bills that arrived late last year or early this year. ESD has more information.

Learn more about this issue with a March 9 webinar as AWB hosts Acting Commissioner of the Washington Employment Security Department Cami Feek. Contact AWB’s Bob Battles to learn more.

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New Census data energizes updated Vitals at Washington in the Making

A new cache of data from the U.S. Census’s American Community Survey is available on the Vitals section of Washington in the Making, a website offering valuable key tools for local insights, recovery and growth. The five-year estimates are especially crucial for tracking progress in smaller counties and are considered among the most reliable data available among the Vitals listed in the dashboard.

This data gives us the clearest picture of Washington pre-pandemic, according to a new AWB Institute news post.

Updated Vitals include: poverty rate, renters paying 50% of their income or more on housing, average commute time, households without internet, households with broadband, median age, median household income, and post-secondary educational attainment.

Watch AWB’s public affairs program
CAPITOL FOCUS

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 FEDERAL ISSUES

House Democrats prepare for vote on $1.9 trillion budget reconciliation pandemic aid bill

On Friday the House Budget Committee released the legislative text of the $1.9 trillion consolidated budget reconciliation bill, the American Rescue Plan Act, ahead of an expected party-line House vote today. The measure would then head to the Senate, where it could undergo several major changes.

This package covers a wide array of issues, including individual stimulus rebates, enhancements to family tax credits, and sick and family leave. Of particular note for businesses is the extension of the Employee Retention Tax Credit to from June 30, 2021 to Dec. 31, 2021. The legislation also clarifies that targeted SBA EIDL loans and restaurant revitalization grants (a new program in the bill) are not taxable income. The package also includes relief for multiemployer pension plans, an issue that has been percolating for many years but was never quite able to achieve the necessary bipartisan consensus to pass. Contact AWB’s Amy Anderson to learn more.

Smallest businesses get exclusive two-week window to apply for Paycheck Protection Program

For two weeks starting Wednesday, only businesses with 20 or fewer employees will be able to apply for Paycheck Protection Program support. President Joe Biden announced today that the Small Business Administration will only accept applicants from the smallest companies for 14 days starting Wednesday.

The Paycheck Protection Program, which offers forgivable loans to small businesses to help them weather impacts from Covid-19, reopened in January with new congressional appropriations. The program is slated to end March 31. The Wall Street Journal covered the story.

You can find more information about the PPP loan and other sources of funding on AWB’s financial resources page.

Congress may move forward on immigration reform bill

The politics may be right for Congress to move a farm worker immigration reform bill, akin to the Farm Workforce Modernization Act co-authored in the last congressional session by U.S. Rep. Dan Newhouse, R-WA, which passed the House but not the full Congress.

The Farm Press reports that Rep. Zoe Lofgren, D-Calif., could soon reintroduce that bipartisan Farm Workforce Modernization Act. This bill would create a pathway to legalization for agricultural or farmworkers, as well as update the H-2a guestworker visa program for agriculture workers.

Contact AWB’s Amy Anderson to learn more.

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 CAPITOL UPDATES

HB 1084: Restricting natural gas in residential and commercial buildings

The House Appropriations Committee is scheduled to vote Tuesday on House Bill 1084, which aims to reduce natural gas availability in residential and commercial building construction.

AWB joins a number of trade organizations in opposing the bill, which lays out a pathway for the restriction and removal of natural gas as an energy source for heating in buildings. During a hearing last week the bill continued to have strong opposition across industry sectors. Contact Peter Godlewski to learn more.

HB 1170: The Building Economic Strength Through Manufacturing Act

The House Appropriations Committee last week voted in favor of House Bill 1170, the Building Economic Strength Through (BEST) Manufacturing Act. This bill seeks to double the state's manufacturing employment base, the number of small businesses, and the number of women and minority-owned manufacturing businesses in the next 10 years.

During an earlier hearing last month on the bill, a number of AWB members testified in favor of HB 1170: Kate Lampson, Lampson International; Allison Budvarson, Out of the Box Manufacturing; Steven Tibbitts, Zeva Aero; and Steven Ashby, Battelle (Pacific Northwest National Laboratory). Contact Tommy Gantz to learn more.

HB 1095: Ensuring pandemic assistance grants aren’t taxed

Last week Gov. Jay Inslee signed House Bill 1095, a bipartisan measure supported by AWB which made it clear that grants received by businesses during the pandemic would not be subject to state B&O tax. The bill had passed both chambers of the Legislature unanimously. Contact Tommy Gantz to learn more.

HB 1189/SB 5211: Tax-increment financing

Both House and Senate version of a tax-increment financing bill passed out of committee last week. AWB supports House Bill 1189 and Senate Bill 5211. Contact Tommy Gantz to learn more.

SB 5371: Sweetened beverage tax

The Senate Health & Long-Term Care Committee will hold a hearing Tuesday on Senate Bill 5371, which would create a new tax on sweetened beverages to help pay for health care. AWB opposes this regressive tax. Employers can sign up now to testify on the bill. Contact Amy Anderson or Tommy Gantz to learn more.

SB 5147: Pilot projects for alternate academic calendars

The Senate Ways & Means Committee will hold a hearing Tuesday on Senate Bill 5147, which would address learning loss by exploring alternative school calendars. AWB supports this bill. Contact Dave Mastin to learn more.

SB 5178: Licensure waivers during a state of emergency

SB 5178 allows automatic waivers for certain certificate of need, facility licensure, pharmacy licensure, and health care provider licensure statutes during a governor-declared statewide state of emergency. It also provides protection for health care facilities from state sanctions if the health care facility relies on the waiver of a federal statute during an emergency when the corresponding state statute has not been waived. AWB supports this bill, which aligns with AWB’s Rebound & Recovery agenda. Contact Amy Anderson to learn more.

SB 5377: Subsidizing health insurance plans on the exchange

After a public hearing last week, the Senate Ways & Means Committee is scheduled to vote this Tuesday on Senate Bill 5377. AWB continues to oppose this bill, which establishes a premium assistance program and a cost-sharing reduction program to provide health care premium assistance to eligible individuals. The proposed substitute bill does not address the fact that, should it pass, the cost of employer-sponsored health insurance will increase and that the total cost of the proposed program, along with the original vehicle, the Cascade Care public option, is yet to be determined. Contact Amy Anderson to learn more.

SB 5347/HB 1213: The Fair Start for Kids Act

Both the Senate and House versions of the Fair Start for Kids Act were amended and passed out of their respective fiscal committees last week.

HB 1213 was passed out of the House Appropriations Committee with amendments. The most significant amendment, submitted by Representative Ormsby, added a null and void clause. This addition brings into focus HB 1496, the capital gains tax bill, for funding child care.

AWB supports the policies in the Fair Start for Kids Act but opposes new revenue to fund the efforts, specifically those proposed in HB 1496. The solutions offered in SHB 1213, including increasing the subsidy rate, fixing the subsidy cliff, expanding before and after school care, and support for the child care workforce, will go a long way to increasing accessible and affordable child care in Washington state. AWB believes that taking an approach that realizes increased revenue through already established taxes, savings from decreased regulations, federal infusion of dollars, and a stepped approach to funding will adequately fund these policies without the need for new revenue.

Contact Amy Anderson to learn more.

SB 5151: Outdoor preschool programs

SB 5151 passed the Senate Ways & Means Committee last week. The bill adds to the licensing of child care programs those which operate outdoors or “outdoor nature-based child care.” In 2017 DCYF piloted outdoor childcare programs. This bill will permanently codify such programs. This proposal aligns with AWB’s goal to “create an environment that fosters growth and entrepreneurship for the child care industry.” AWB supports the bill. Contact Amy Anderson to learn more.

HB 1331: Early learning facility impact fees

The House Rules Committee has placed House Bill 1331 on second reading. The bill qualifies early learning facilities as having a broad public purpose when considering impact fees. Thus, as an entity that provides a broad public purpose, local jurisdictions can exempt them from impact fees. AWB supports the bill. Contact Amy Anderson to learn more.

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 OTHER NEWS

Sen. King introduces transportation proposal, marking fourth project so far this session

The ranking Republican on the Senate Transportation Committee, Sen. Curtis King, R-Yakima, has released his transportation package. The $10 billion, eight-year proposal (balance sheet) is the fourth plan brought forth so far this year.

Contact AWB Government Affairs Director Mike Ennis to learn more.

Canada revises travel restrictions

New Canadian Covid-19 border rules go into effect today, including additional testing and stricter quarantine requirements for those entering the country by land or air.

While Canada requires proof of a negative Covid-19 test within 72 hours for those arriving by land, that rule has been exempted for essential workers, including truckers, front-line health-care workers, as well as cross-border communities like those living in Point Roberts, who will be exempt from the testing requirement at the land border when transiting Canada.

NBC-KNDU and Tri-City Herald highlight new Washington Workforce Portal

An article this weekend in the Tri-City Herald and story by the Tri-Cities NBC affiliate KNDU describe how the new Washington Workforce Portal helps connect employers with students to fill internship openings. The new program by the AWB Institute is available statewide but is being piloted with a special focus in the Tri-Cities and Spokane.

There is no cost to participate as a student intern candidate or as an employer looking for potential interns.

"The association is encouraging high-quality internships with an emphasis on making a commitment to enhancing the student’s learning experience,” The Tri-City Herald reports. “Washington Workforce also provides educators tools and resources to help better prepare students to be hired.”

Amazon announces 1,000 jobs at new fulfillment center in Spokane Valley

Amazon announced last week that it will open a fulfillment center in Spokane Valley, adding 1,000 new full-time jobs to the region. This is on top of the 4,000 jobs at the company’s Airway Heights fulfillment center.

Cara Coon of Greater Spokane Inc. told The Spokesman-Review this is good news for the region at a time when good-paying jobs are really needed.

Nominations sought for AWB's Board of Directors

As a member-driven association, AWB's robust Board of Directors is an important source of strength. Nominations are now open for diverse business leaders from across the state, and from employers of all sizes, to serve on the AWB Board. The nomination deadline is March 15.

Send nominee names and contact information to Bonnie Millikan.

L&I Director Joel Sacks to speak at this week’s Lobby Lunch

The head of the Department of Labor & Industries, Joel Sacks, will speak to AWB members and other employer advocates this Thursday during the AWB Lobby Lunch.

The weekly event is from 12-12:30 p.m. and is free to all AWB members. Register here in advance for your seat at this and future Lobby Lunch events.

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 AWB EVENTS & RESOURCES

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Must see: March 9 webinar covers the new unemployment insurance tax revision

To help answer employer questions, AWB is partnering with the Washington Employment Security Department (ESD) to provide a free webinar on Tuesday, March 9, from 11 a.m. to noon, that covers the revised lower tax assessments from a relief measure passed by the Legislature and signed into law by the governor earlier this month.

AWB will host ESD Acting Commissioner Cami Feek, who will provide an update to employers on how the newly passed unemployment insurance relief changes what they owe on this quarter’s tax bill, and answer your questions.

This webinar is free and open to AWB members and non-members. Register now for login information.

logo for Don C. Brunell scholarship with the motto Excellence in business for future leaders

Application for Don C. Brunell Scholarship now open

The children or grandchildren of AWB member employees are encouraged to apply for the 2021 Don C. Brunell Scholarship for Future Leaders. The scholarship was established by the AWB Board and funded by AWB members in honor of former AWB President Don Brunell to inspire and aid Washington’s future business leaders.

Recipients may receive up to $1,000. The scholarship is targeted to undergraduate, graduate or career/vocational students currently pursuing or who intend to pursue a course of education that will lead to a degree or certification in business from any public or private university, community or technical college, or private career school.

The deadline for submitting applications is June 30, 2021. Scholarships will be announced and awarded on or about Aug. 31, 2021.

For complete details on eligibility, application packet and instructions to complete the application click here. Or contact the scholarship administrator, Sarah Rith.

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AWB’s popular HR webinar series kicks off with more to come

The 2021 Human Resources and Employment Law webinar series began this month and there are five more webinars in the months ahead. Register now to gain access to the expertise of Washington’s highest-caliber law firms on human resources, office administration and employment law. The next event will be March 3 with a focus on the employee handbook.

March 3: Employee handbook

The employee handbook is the quintessential employer’s tool for managing employees, for businesses of all sizes. It provides guidance to employees about workplace expectations, gives managers a means of assessing employee conduct and job performance, and importantly, the employee handbook is critical in mitigating risk--including litigation risk. This session takes a look at some of the do’s and don'ts of crafting an effective employee handbook, including essential policies your handbook should contain, highlights recent changes in Washington’s legal landscape (such as the new paid sick leave law and local ordinances), and examines policy pit falls and common-sense approaches that can help protect your business.

Find full series details and register online. Continuing education credits are available for HR professionals, attorneys and others. The webinar includes all presentation materials and instructor-provided resources. Non-member pricing is also available.

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Save the Date: Spring Meeting will be on May 12

Spring Meeting will be here before you know it. Mark your calendars now for Wednesday, May 12.

AWB’s Spring Meeting is the annual gathering where Washington employers come together to gain new insights into the economic and policy issues that impact their business.

The event brings together the business community, lawmakers, policy experts and economic advocates to support the global competitiveness of our state. We are working on a dynamic, engaging agenda and are looking forward to announcing details as they are finalized. Make a note to join us on May 12 and stay tuned for more information coming soon.

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Stay safe with AWB’s Covid-19 resources for employers

With a few clicks, it's fast and efficient to find personal protective equipment manufactured and distributed by Washington employers.

Find gloves, face masks, hand sanitizer, signs and more for your business at AWB's Rebound and Recovery website. Buying from these local suppliers saves jobs and keeps money in the region, making the state's eventual economic recovery that much faster.

AWB has also created the Stay Safe Washington campaign, which helps employers get the word out to their employees and communities about how wearing masks can protect public health and keep the economy open at the same time. The message is simple -- Your mask today saves our jobs tomorrow.

Finally, there are a variety of grant and loan opportunities, the latest vaccine information and a list of answers to frequently asked questions at AWB's Covid-19 Resources web page. Check it out today, and feel free to send suggestions to SusieG@awb.org.

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 TWEET OF THE WEEK

tweet from @KrisJohnson_IOM Since our announcement last week over 100 students have created their internship account! Great results that speak to the need for the portal

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 THEY SAID IT

"A capital-gains tax bill moving toward a state Senate vote is too flawed and should be abandoned. The Democratic leadership’s rush to create this tax even as the state’s revenue picture is expected to continue improving, coupled with its disingenuous use of the legislature’s emergency power, further signals a need for voter skepticism." ~ The Seattle Times in an editorial today, “Legislators must drop hasty, flawed capital-gains tax push.”
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