WRA Board meets House & Senate Leadership By Jan Teague, President/CEO
Your Board of Directors met with the four leaders in the House and Senate yesterday highlighting a number of bills of concern. Board Chair Robin Pavlish emphasized WRA's concern that no new taxes be imposed on the consumer or the businesses. Sales tax increases, for instance, change how much shopping people will do. HB 1387 removes the sales tax exemption when Oregon residents shop in Vancouver. While the bill sponsor is hoping for a small net gain in sales tax, many retailers will lose revenue in the process. But as we understand it, jobs will be lost and local property taxes will be lost as some retail businesses can no longer compete with Oregon retailers. Pavlish went on to describe the seriousness of the retail business climate and as the day unfolded with the leadership, I think the entire Board realized that every issue we brought up translated into jobs. As each policy was described, clearly more job losses would be the outcome. In just one major general merchandise store for instance, 30 people were hired for Christmas rather than the normal 130.
We also met with Governor Gregoire's Legislative Director, Marty Brown. He seemed to understand the grave situation that we were describing and said that unfortunately as the economy sours and state budgets shrink from the loss of retail sales, costs for government services go up. One Board member said the best answer was to help create jobs across all of the industries.
Senator Lisa Brown (D) and Representative Lynn Kessler (D) both described the hope that the money coming from the Federal government would help the state with some of its budget problems. There is a proposal to cut reimbursements for Medicaid prescriptions. If the cost of the drug is greater than the reimbursement, pharmacies may decide not to fill the prescription. Or worse, if they sell to primarily Medicaid patients, they may have to close their businesses.
Unions remain a strong influence on a bill that businesses call the "gag rule" and unions call "worker choice". This will make it easier to organize unions and restrict businesses from talking to their workers for just about any reason. Even though there will definitely be a lawsuit that will cost the state money to defend, over 40 House legislators have signed on to the bill. They don't think it's right for businesses to talk to their workers. This week an Attorney General's opinion was released that is not favorable to the bill. Hopefully those who signed on will decide it makes no sense to pass a law that won't stand up in a legal battle.
Representative Lynn Kessler told a story of being forced to sit through a United Way fundraiser when she was younger. This caused her a great deal of embarrassment because she could not afford to donate. It reminded me of the time I was sent home for wearing a pants suit and came back in a mini length dress that my supervisor told me looked great on me. Times do change and so do social norms. But they are not necessarily legislated changes.
Representative Richard DeBolt (R) and Senator Mike Hewitt (R) both described the need to have businesses call or write about what they are experiencing. They noted that there are a lot of bills that increase business costs or add new regulations. More emphasis should be given on finding ways to support business, but that does not seem to be the general tone of the Legislature.
State Auditor Brian Sonntag was our luncheon speaker. He told the Board he wasn't a fan of the process called "priorities of government" because it wasn't really an open process that involved the citizens. He said that he is about to start a significant review of all state agencies looking at how efficient they are. He plans to make it an open process and to involve the citizens. The review will look for duplication of efforts among departments and results of work to see if anything is getting done.
Federal law pre-empts state union organizing bill, AG says
The National Labor Relations Act preempts provisions in SB 5446, which would liberalize union organizing in the state, a state Attorney General's opinion this week has concluded.
Mike Hewitt (R-Walla Walla), the Senate Republican leader, sought the opinion that was rendered by Jeffrey T. Even, the deputy solicitor general.
In his opinion, Even noted that SB 5446 would prohibit employers from communicating with employees about labor matters.
"The proposed bill would, if enacted, thus address subject matter pre-empted by federal law," Even wrote. "Even when that speech is not coercive in nature, the NLRB pre-empts state regulation because this is an area that Congress intended to leave unregulated and controlled by the free play of market forces."
The Attorney General's decision bolsters the Washington Retail Association's opposition to the bill. The U.S. Supreme Court already had ruled last summer that a California law similar in content to the Washington bill was illegal.
WRA and other business organization oppose the bills on several fronts. They would take away the rights of employers to communicate with employees and drive up labor costs during the current recession, leading to layoffs, associations have pointed out. The bills also likely could generate lengthy, expensive and unnecessary legal challenges following the Supreme Court ruling in California.
Despite the California ruling, SB 5446 and the companion House bill 1528 have strong support in the Legislature. The House bill lists 47 sponsors while the Senate bill lists 21 sponsors. It would take 49 votes to pass the House bill and 25 votes for the Senate bill to be passed. Democrats outnumber Republicans in both state houses; 62 to 36 in the House, and 31 to 18 in the Senate.
Business opposition remains strong to cap and trade Committee approves House bill
Business opposition remained strong this week regarding bills aimed at reducing greenhouse gas emissions in Washington State.
The Washington Retail Association has joined several business associations in opposition to House bill 1819 and Senate bill 5735 regarding greenhouse gas emissions. The House Ecology and Park Committee passed the House version on Tuesday.
The expense of meeting the bill requirements would lead to layoffs in the current recession and increase the cost of fuels, further damaging an already fragile state economy, business groups say.
Further complicating matters is a pending federal bill that could render any state bill moot, opponents of the state bills say.
Under the bills, Washington would join other western states and Canadian provinces in a regional system to reduce greenhouse gas emissions below 2005 levels by 2020. The idea would require major industrial users and larger retailers to reduce carbon dioxide releases or be allowed to trade for rights through an auction system for rights to emit the gases.
Business groups oppose the auction idea and would rather wait for Congress to approve a national program than for regions to adopt a varying patchwork of different emissions requirements.
Amendments in the past week have failed to win business support. Businesses continue to ask for a greater voice in the discussions, more economic analysis of the impact of the bills and for the Legislature, not the Department of Ecology, to have final authority on taking steps to reduce greenhouse gas emissions in the state.
In general, businesses say the bill is short on details about how the auction system would work and what it would cost them to obtain allowances to emit greenhouse gases.
A late version of the bills says the Department of Ecology would convene a work group to flesh out more details of how an emissions reduction program would work by the end of next year. The group's recommendations would be shared with the Legislature, according to a version of the bills.
WRA monitors bills as filing deadline approaches
Thursday marks the 39th day of this year's 105-day Legislative session.
There are several deadlines before which bills can be considered, starting with next week Wednesday. That is the last day to read in committee reports in the house of origin except for House fiscal committees and Senate Ways & Means and Transportation committees.
The Washington Retail Association has been tracking numerous bills this session of importance to members. 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.
Here is a summary of bills and issues so far:
*The latest state revenue shortfall report has grown to $8.3 billion, which is a quarter of the state budget. A revenue forecast update is due out this week. The mid-March estimate will be the one the Legislature uses to pass the budget.
*About 2,100 bills had been introduced as of late last week.
*Teague testified at a Feb. 10 committee hearing in favor of an unemployment insurance reform agreement, SB 5963, which could lower rates for WRA members and bring Washington back into compliance with federal regulations determining the basis for making payments.
*SB 5564, data breach. Companion bill, HB 1149 An amendment is being prepared to exempt retailers from assuming costs of reissuing cards after a breach if a vendor is responsible for the error. WRA opposes the concept of the bill and has testified against it. Despite opposition from banks and restaurants, the bills are expected to move out of committees.
*HB 1609, paid family leave A hearing was canceled on a bill to add a payroll tax to pay for family leave. Legislators appear unwilling to reschedule. This bill may die in this session.
*HB 1189, shopping bags, proposed striking amendment The bill outlawing disposable bags may be amended to propose a statewide recycling program. The bill also would prohibit individual cities or counties from imposing their own fees or bans, similar to the Seattle 20-cent per disposable bag fee upon which residents will vote this fall. Depending upon which bags qualified for recycling, the bill could impose new costs on retailers. WRA will work with stakeholders and promote recycling as opposed to fees or bag bans.
*HB 1554, stop work orders A bill that would allow Labor and Industries to stop work if a member's subcontractor was negligent in paying insurance premiums has been amended to only apply to vendors unregistered with the state. WRA members are registered as required by the state.
*HB 2176, "Brinks Fix" for use of company car WRA supported at a hearing the bill that would exempt employers from paying employees mileage for driving to and from home in a company vehicle.
*HB 1531, locksmith, installer background checks WRA signed in opposition at a Feb. 13 hearing to the bill because it would harm some members. WRA also believes the bill could have a negative impact on do-it-yourself customers.
*Johnson testified at a Port of Seattle hearing in opposition to the idea of a container tax or other fees as part of the Clean Truck Initiative. Port commissioners fear such a fee would cause their business to drop and WRA and its Government Affairs Committee agree it would be a barrier to competitiveness. Commissioners appear to be leaning against instituting the tax.
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 chair, 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.
Health care reform bills introduced in Senate
Two health care reform bills were heard in the Senate Health & Long Term Care committee last week, but no further action has been taken to date.
Senate bill 5945, introduced by Sen. Karen Keiser, (D-Des Moines) as the lead sponsor, would collect employee and employer assessments to pay for universal health care for all state residents by 2011.
Senate bill 5947, introduced by Sen. Cheryl Pflug, (R-Issaquah), would enroll customers in a variety of private health care plans through a central clearinghouse, commonly referred to as an "insurance exchange" or connector. The deadline of this bill is the same as SB 5945, to provide access to plans by 2011.
During the hearing, Pflug estimated that her plan could provide health care coverage to two thirds of the state's currently uninsured.
The Washington Retail Association maintains that a state-run health care system would eliminate private competition and likely lead to increased costs requiring new and higher taxes on individuals and businesses. Hawaii dropped its universal health program after seven months due to runaway costs and Massachusetts has experienced dramatic health care cost increases after its adoption of a state-run program.
The Washington Retail Association joined the Association of Washington Business in signing against the bills during the hearing.
Several member of the Healthy Washington Coalition testified in favor of Sen. Keiser's bill, and urged the Legislature to act on it. But Robby Stern, chair of the coalition, acknowledged the Legislature may be hard pressed to focus on the bills as it faces a growing revenue shortfall, last estimated at $8.3 billion, in the coming bi-ennial budget period.
Stern speculated that overwhelming state budget problems could derail health care reform during this session of the Legislature.
Legislators review Oregon mileage tax pilot program
House Transportation committee members heard details last week about an Oregon pilot project to replace that state's gasoline tax with a user tax based on the number of miles a person drives.
The committee members heard a report from an Oregon Department of Transportation official, but took no further action on behalf of Washington State.
The Oregon program used a satellite tracking device installed in vehicles that measures miles driven. The device then sent a signal to gasoline pumps at two Portland filling stations that were part of the pilot program. The pumps deducted the state's existing gasoline tax and added the mileage tax of 1.2 cents per mile to the customer's bill.
To date, Oregon has spent 6 years and $2.9 million studying the mileage tax, but is not close to implementing it, said James Whitty, head of Oregon' Office of Innovative Partnerships and Alternative Funding.
Whitty offered the committee no projection of how much the system could raise in state revenues. In answer to committee members, Whitty said such technology could be considered both to raise revenues and reduce traffic.
Whitty listed several details that must be worked out before Oregon becomes serious about implementing such a system. There is no technology to monitor electric cars and Oregon has not agreed on a mileage rate, Whitty said. Further, he said some residents considered the tracking device an uncomfortable invasion of privacy.
He also estimated it would cost $32 million to outfit all Oregon fuel pumps to interact with the tracking device to calculate fuel bills. In the current recession, Whitty said Oregon lawmakers may be unwilling to consider the expense of setting up the system.
There also were some technical glitches in getting the system to work properly in older cars. Whitty therefore said it is more likely such as system, if Oregon ever did implement it, would be phased in gradually and be installed only in new cars.
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.
Some workers receiving unemployment benefits are scheduled to begin receiving applications in the mail for extensions of up to 13 weeks of more benefits.
The extended benefits would be paid only after eligible workers have used up emergency unemployment compensation benefits, said Karen Lee, Employment Security Commissioner.
The U.S. Department of Labor has notified Employment Security that Washington qualifies for extended benefits as a result of the state's rising unemployment rate. The seasonally adjusted jobless rate in December was 7.1 percent statewide, up from 6.4 percent in November.
Extended benefits became available this week. Employment Security is asking those eligible to wait until they receive applications in the mail rather than calling the department, which is operating at capacity due to a high claims load, Lee said. Her department is identifying which workers are eligible for a benefits extension before mailing them an application, she said.
To hear an audio version of Lee's announcement, click here.
Source: Employment Security Department
Newhouse named state Ag director
Rep. Dan Newhouse (R-Sunnyside) is scheduled today to begin his new job as director of the state Department of Agriculture.
His appointment by two-term Democrat Governor Christine Gregoire, her first Republican appointee, was announced last week.
Newhouse succeeds Valoria Loveland, who retired last May.
Newhouse operates a farm where he grows hops, tree fruit, grapes and alfalfa. His father, Irv, served 34 years in the House and Senate before retiring in 1998. The younger Newhouse was first elected to the Legislature in 2002.
A replacement for Newhouse's seat will be appointed before a special November election can be held.
Sources: Seattle Post Intelligencer, Associated Press
Correction
An item last week reporting the death of former Rep. Mary Skinner, R-Yakima incorrectly reported that she had served in the state Senate. We regret the error.
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.
