WRA testifies in support of SB 5963, UI conformity
Jan Teague, President/CEO of the Washington Retail Association, testified Tuesday in favor of a Senate bill that provides that unemployment insurance benefits would be charged to employers in the same amount that benefits were paid out.
The hearing on SB 5963 was held before the Senate Labor, Commerce & Consumer Protection committee.
In 2006, at the urging of the Washington Retail Association, the federal Department of Labor determined that a provision of Washington law was out of conformity with federal unemployment insurance laws. The provision governs the way unemployment benefits are paid and charged back to the employer.
One effect of the problem has been that WRA members have been subsidizing seasonal industries. Addressing this discrepancy in legislation would reduce UI payments by WRA members.
The bill has the bipartisan support of 8 Republicans and 5 Democrats who are listed as sponsors.
Teague's testimony to the committee follows in its entirety:
I am Jan Teague, President/CEO of the Washington Retail Association.
The Washington Retail Association supports the business community agreement that you are considering tonight, SB 5963. We appreciate the amount of time that both the Department of Employment Security has spent providing us technical answers to our questions, and to the business individuals who have worked over the last few months to craft the proposal you have before you, particularly Donna Steward of the Association of Washington Business who has kept us together as a working group and who has become the latest business expert on how to read the charts and understand their impacts on our various industries.
We support this bill for principled reasons. First, it was developed with every industry in mind. This was critical since past changes in the employment law created a series of unique problems. Legislators had to wrestle with what relief to offer part time workers in their benefits which became a major funding battle over the last ten years. Recently, the federal government has determined Washington State was not in conformity with how it charges employers in this regard with some industries, like retail, continuing to pay more than it should to solve this problem with part time workers. This bill addresses the rate structure that has been so controversial over the years.
The second reason for supporting SB 5963 is that it provides tax reductions from a system that has overtaxed our companies. Not only were we subsidizing part time workers, we were paying a premium to do it. Under the new rate schedule in the bill, we are seeing our tax dollars come back to us in the form of a rate reduction.
Over the past ten years, I have debated a number of the business interests who are participants to this agreement. Today, we have found common ground, though tenuous. By that I mean that should we find ourselves faced with changes to the proposal, the agreement falls apart. We again begin to argue about the fairness of the rates in the system. We again enter another decade where we seek to insure workers with rates that can pass the test of fairness.
This agreement is fair and is considered sustainable. This last point will be key in holding the agreement together and in creating a system that we can use into the future.
We encourage you to support SB 5963.
Thank you for your consideration of this key legislation.
Questions continue about cap and trade bill
Republicans on the Senate Environment, Water & Energy committee this week continued to raise doubts and questions about a bill aimed at reducing greenhouse gas emissions in Washington State.
They said SB 5735 is short on details, including economic impact analysis and puts too much authority to administer an emissions control program in the hands of the appointed Department of Ecology, rather than the elected Legislature.
If approved, the bill would put in place a market-based "cap and trade" program to reduce greenhouse gas emissions 15 percent below 2005 levels by 2020. Washington would join other western states and Canadian provinces in this effort, which would require major industrial users and larger retailers to reduce carbon dioxide releases or be allowed to trade for the rights to emit gases.
Mark Johnson, Vice President Government Affairs for the Washington Retail Association, signed in opposition to the bill at this week's hearing. While WRA supports the reduction of greenhouse gas and carbon emissions, it opposes arbitrary and mandatory reductions that would increase business costs and lead to layoffs, especially considering the state is in a deep recession.
States not included in the Western Climate Initiative, including Idaho, stand to gain a competitive advantage over states where business expenses would rise to install equipment to comply with the bill's requirements, said Sen. Jim Honeyford, R-Sunnyside, the Republican Deputy Floor Leader.
"I call this the Idaho economic development bill," Honeyford said during the public hearing.
Sen. Janéa Holmquist, R-Ephrata, said the bill was short of economic analysis of the costs to businesses to comply with the bill.
Sen. Jerome Delvin, R-Richland, noted another uncertainty; a pending federal cap and trade bill whose final details are unknown. Were Washington to approve a bill before a federal bill, and if the federal model were significantly different than the Washington program, could businesses be reimbursed by the state for their expenses, Delvin asked.
Jay Manning, Director of the Department of Ecology, answered that he would work to improve the state bill so as not discourage businesses from participating.
Sen. Bob Morton, R-Kettle Falls, said he was concerned about the lack of details in the bill about whether companies would be given or sold so-called "allowances" to emit pollutants.
"There is a lot of work that needs to be done in terms of filling in the details," said Manning, who acknowledged the bill can be improved to satisfy its opponents.
Also testifying in opposition was AAA-Washington. Director of Public Affairs Dave Overstreet, who said AAA favors a federal approach to pollution control. He also said the bill would raise gasoline prices, which could weaken the state's economy.
An analysis of cap and trade by the Washington Alliance for a Competitive Economy (WashACE) concluded it would raise gasoline and diesel fuel costs and pose a significant financial burden on manufacturing businesses. A WashACE report estimated that cap and trade regulations could add $8.4 million annually in new Boeing expenses and cost the typical large pulp and paper mill an additional $1.8 million a year.
A Wall Street Journal story earlier this month found that California's three-year-old anti-global warming regulations have been an economic failure. Senior economics writer Stephen Moore found that economic analysis of the California standards underestimated their costs to the economy and that competing states were using California's higher business costs as a recruiting tool to convince companies to move out of California. Since passage of tougher environmental regulations, California has lost jobs and its unemployment rate hit 9.3 percent last December, The Journal reported.
WRA monitors bills that would affect retailers
As the Legislature's first filing deadline of Feb. 25 approaches, the Washington Retail Association is tracking bill introductions and commenting upon bills that could affect retailers.
Those tracking the bills include Jan Teague, President/CEO; Mark Johnson, Vice President Government Affairs; and Tammie Hetrick, Vice President Retail Services; and Jim Szymanski, Director of Public Affairs.
As of this week, the WRA team was monitoring nearly 140 bills related to retailers that have been filed thusfar.
A summary of bills and issues being tracked includes:
*Revenue, taxes, insurance premiums. Teague reports that tax increase bills could follow a state revenue report this week. Both houses expect to approve a bill for Gov. Gregoire this month that would draw on state unemployment insurance reserve funds to increase jobless benefits by $45 a week. Teague and Johnson are working on an agreement to lower employer unemployment insurance and UI conformity rates.
*SB 5225, HB 1144. Raising felony theft limits. At a Feb. 3 hearing, cities opposed bills to raise the felony theft limit for organized retail thefts. Amendments have added an ORT task force and increased the amounts retailers can recoup from thieves. Felony theft limits would rise from $250 to $750 in the House bill and to $1,000 in the Senate bill. Johnson is awaiting a bill redraft.
*HB 1149, SB 5564. Data breach. Johnson testified in opposition at a Feb. 5 hearing on bills that would shift costs from credit unions to retailers for issuing cards after a security breach. Restaurants and banks also have opposed the bills, but the bills are expected to move out of committees.
*HB 1528, SB 5446. Worker Privacy Act. WRA has testified against these bills that would disallow employers from holding mandatory employee meetings on labor issues. A lawsuit challenging the constitutionality of the act is likely if it passes. This is labor's major legislative effort.
*HB 1609. Family and medical leave. Would require employers to pay a 2-cent per hour worked premium to be deposited in a family and medical leave insurance account. WRA opposed this new tax at a hearing.
*SB 5543, HB 1469. Fluorescent light recycling program. Would require retailers to pay a $10,000 annual fee to recycle the lights at state operated facilities, though proponents have offered to lower the fee to $1,000 if WRA adopts a neutral position.
*HB 1180, SB 5282. Bisphenol A removal from containers. The focus of the bills has been narrowed to children under age 3 and includes sports bottles, but not cans.
*HB 1819, SB 5735. Greenhouse gas emissions reductions. A hearing was held this week on the Senate bill, where businesses and Republican Senators objected to the bill's lack of specifics, including economic analysis of costs to businesses and layoffs that could result. WRA recommends a federal approach to the issue, not the regional approach called for in both bills.
*HB 1165, SB 5279. Drug take backs. The bills have been amended to exclude store brands from the voluntary recycling program.
*HB 1406, SB 5329. Pet food tax. The tax based on tons of pet food sold would add $106 million in new taxes covering a 10-year period. Johnson expects that it is unlikely the bills will pass.
*HB 1189. Retail store carryout bags. WRA is promoting recycling as the alternative to attaching fees on the use of disposable shopping bags. WRA continues to work to defeat imposing fees on shopping bags.
*HB 1947. Street utility tax. A hearing was held this week in the Transportation committee on a bill to impose a tax on retailers based on traffic volumes visiting their stores to raise funds for local government road maintenance and upkeep.
In other matters:
*Hetrick is attending a series of weekly meeting with Republican House and Senate leaders of Commerce and Labor committees and House Commerce and Labor chairman Steve Conway. She also meets weekly with Senate Labor, Commerce and Consumer Protection chai, Senator Jeanne Kohn-Welles.
*WRA leadership meets weekly with House Speaker Frank Chopp and every other week with Senate Majority Leader Lisa Brown to discuss bills, legislation and their impacts on retailers.
Tax report confirms state's economic slowdown
Tax payments to the state general fund started off the New Year falling 5.3 percent below expectations.
Receipts in the Jan. 11 through Feb. 10 collection period were $62.6 million, which fell short of revenue projects made last November.
Revenues across several tax categories confirmed the continuing weakening of the state economy, a major contributor to the current $6 billion revenue shortfall the state faces. Tax receipts are down in retail and real estate, which are major pieces in the state's economy.
A report this week by the state Economic and Revenue Forecast Council shows:
*Retail tax payments in the month ending Tuesday were down 12.7 percent below the same time a year ago. Retail tax receipts have declined year-over-year in 12 of the past 13 months.
*The largest retail trade category, the auto sector, has reported year-over-year declines in tax payments for 13 consecutive months.
*Non-retailing sectors also are showing economic weakness. The construction sector showed a 9 percent decrease in tax payments this month while manufacturing reported a 20.6 percent decrease. The council reported lingering effects from the September-November Boeing strike likely contributed to the shortfall in manufacturing revenues.
*Taxable real estate activity remained weak to start this year, falling 47 percent compared to a year ago. Taxable real estate activity has declined 24 of the past 26 months on a year-over-year basis.
*The number of real estate transactions and the value per transactions continues to fall. In December, the last available month for sales records, transactions were down 24 percent compared to the year before while the value of the transactions declined 33 percent. Transactions have declined on a year-over-year basis in 36 of the past 37 months, while the value per transaction has declined for 15 of the past 16 months, on a year-over-year basis.
For the period July, 2008 through this week, state general fund tax collections are down 7.5 percent, according to the council's report.
Source: Economic and Revenue Forecast Council
Retail container traffic to fall first half of this year, report predicts
Retail cargo volumes through U.S. ports are forecast to continue dropping for the first six months of the year.
Cargo volumes at ports reflect retailers' anticipated sales.
Retail cargo volumes finished 7.9 percent lower in 2008 compared to 2007, according to the National Retail Federation. A report for the NRF projects volumes will drop 11.8 percent the first half of this year due to the recession and normal winter weather slowdowns.
"The combined influence of the recession and the usual winter slowdown will result in extremely weak February port traffic," said economist Paul Bingham of IHS Global Insight, which tracks the data for NRF.
The reduced cargo figures also reflect a pessimism among retailers regarding how much merchandise they can sell, said Jonathan Gold, NRF's Vice President for Supply Chain and Customs Policy. IHS tracks cargo activity at several U.S. ports including Seattle and Tacoma.
According to IHS, December was the 18th straight month to see monthly year-over-year declines in retail port cargo volumes. July 2007 was the last month when year-over-year cargo volume increased.
Source: National Retail Federation
ICSC proposes plan to spark more bank loans
The commercial real estate industry needs banking reform to make more loans available, a new International Council of Shopping Centers position paper has concluded.
ICSC members are experiencing an unprecedented lack of credit capacity following the worst holiday shopping season in 40 years, the position paper notes.
Without more lending, refinancing loans will get more difficult while the threat of loan delinquencies and foreclosures will increase, ICSC noted.
The organization has issued a three-point proposal it believes will encourage banks to make more loans. It follows below:
*Repair the Credit Markets: In order to address the credit shortfall facing retail real estate, ICSC calls for an expansion of the Term Asset-Backed Securities Loan Facility (TALF) to include CMBS as acceptable collateral. This facility would allow for the extension of new credit as well as assist in refinancing existing, performing loans held by banks or in CMBS.
*Reduce Potential Impediments for Commercial Loan Modifications: In order to facilitate reasonable loan modifications and debt restructuring, ICSC calls for alterations on the real estate mortgage investment conduit (REMIC) and the tax implications of the Cancellation of Debt. In the residential real estate sector, the U.S. Congress, Treasury Department and IRS already have taken significant steps to mitigate certain tax consequences limiting efforts to restructure residential mortgage loans that pose a risk of default. The commercial real estate sector needs similar guidance to ensure increased flexibility in restructuring commercial mortgage loans.
*Support Main Street Businesses: ICSC represents brick-and-mortar retailers from across the country. Congress should pass the Sales Tax Fairness and Simplification Act that would allow states to collect taxes from out-of-state sellers for remote and internet sales. This action will States and local governments to provide essential services to our communities and alleviate the need to raise additional taxes, while removing the unfair advantage that internet sellers have over brick-and-mortar retailers. As well, we believe that Congress should consider the State and Local Sales Tax Deduction Expansion Act and allow consumers to deduct their state and local sales tax receipts in addition to the state income tax from Federal tax returns. Removing the choice between deductions will likely result in immediate economic stimulus.
Source: International Council of Shopping Centers
WRA helps members resolve delinquent L&I taxes
With the current economic downturn, Labor and Industries (L&I) has reported that more companies are getting behind in paying L&I taxes.
The Washington Retail Association has been working with L&I to assist retailers in resolving outstanding accounts. The parties have been successful in resolving all affected member accounts for the third quarter of last year.
If you are unable to pay your premiums to Labor and Industries in a timely manner, please contact our office for assistance in working with L&I. We are finding because of cutbacks in various departments that new people are responsible for the premium payments and may not be confident regarding how to report and calculate premiums. WRA will be working with L&I to provide training to members to help them with online premium reporting along with assistance to employers who choose not to report online.
Tammie Hetrick, Vice President of Retail Services reported that employers are finding ways to reduce expenses. She said it's important that WRA assist members with the tools they need to keep their business running smoothly and avoid penalties and interest while meeting their L&I premium obligations.
Portland Mayor Sam Adams has scrapped the idea of attaching a tax for shoppers to use disposable paper or plastic shopping bags.
A challenge to a proposed shopping bag fee in Seattle has resulted in an August, 2009 public vote to decide the fate of the idea.
Adams said the national recession persuaded him to at least hold off on the idea.
"Now is not the time," he said. "If we can get people back to work, then maybe someday."
The Washington Retail Association opposes the proposed Seattle 20-cent tax on disposal shopping bags for several reasons. They include penalizing poor and unemployed consumers hurt by the recession and discouraging consumers from shopping in Seattle. WRA instead supports expanding recycling efforts.
Source: Associated Press
Former state Sen. Skinner dies
Former state Senator Mary Skinner, R-Yakima, has died less than a year after her final session in the Legislature. She died last week at the age of 63.
Skinner was diagnosed with colon cancer three years ago.
She was elected in 1994 to represents the 14th District and won re-election through the 2008 session. She announced plans last spring to retire from the Legislature.
Skinner's reputation was as a champion for children. She promoted legislation to double traffic fines in school zones and her work contributed to the passage of a national booster-seat law.
Source: Seattle Times
New state e-waste law saves governments money
Local governments are saving money this year because of Washington's new e-waste law.
It requires electronics manufacturers to pay the cost of recycling TVs, computers, laptops and monitors. This means the electronics industry will be paying recycling bills traditionally paid for by city or county recycling programs as well as establishing additional e-waste collections sites.
The Electronics TakeBack Coalition reports that Snohomish County, for example, which has been operating three e-waste collection stations, will save about $550,000 a year in expenses because of the new state law.
Under the new law, electronics manufacturers instead of municipalities will pay vendors to haul away and process e-waste from collection sites. Manufacturers also will reimburse counties per pound for e-waste collection costs.
The state Legislature passed Washington's law in 2006. The Washington Retail Association was instrumental in achieving passage of the law, which promises to make landfills less threatening to the environment. WRA also supported the law because it is free to consumers.
Best Buy will expand its electronics recycling program to all of its 1.006 stores nationwide beginning on February 15.
Consumers will be able to bring in two units per day, per household, for recycling. The stores will accept most consumer electronics including televisions and monitors up to 32 inches, computer CPUs and notebooks, small electronics, VCR and DVD players and phones, and accessories including keyboards, mice and remotes.
A $10 recycling fee will be charged for items with screens such as televisions, laptops and computer monitors. The consumer will instantly receive a $10 Best Buy gift card in exchange for paying the recycling fee.
Items that will not be accepted include televisions or monitor screens larger than 32 inches; console televisions; items containing Freon such as air conditioners, dehumidifiers and mini refrigerators; microwaves and appliances. The company offers an appliance haul away and pick up program.
Source: Best Buy
The Washington Retail Association, WRA, is a 501 C 6 trade association formed to advocate for Washington State’s retailers at the local, state and national level. Since 1987, the WRA has protected Washington's retailers from unreasonable taxes, fees, regulations and legislation. The efforts of the WRA benefit all Washington state retailers and help fuel statewide economic growth.
