Small businesses continue to be ignored By Jan Teague, President/CEO
Today I gave a briefing to a new Board member and as I described the nature of the decisions being made by the Legislature, I was reminded just how easily public policy can overpower a small business. The Legislature's focus on budget cuts is only one of the issues even though it gets most of the attention in the media.
For small business, ignoring the minimum wage automatic increases, ignoring health care reforms that would help small business and passing laws that raise costs - these are all things that hurt small business.
The environmentalists want new rules on products and more money to control carbon emissions through taxing schemes.
The unions want to increase unemployed worker benefits and make it more difficult for businesses to participate in discussions about their injured workers. Of course, they also wanted more restrictions on business so that unions would be easier to form, but due to their brazen approach, the measure died midway through session.
The government agencies all want to raise their fees for various licensing programs.
Then there are other smaller special interest groups that want something. There are those who suffer from Crohn's Disease who want to come into your store carrying a note to prove their conditions and use the bathroom, putting you or a single employee at risk, or your merchandise storage area open to theft.
There are credit unions who want to put new financial liability on your store if there is a credit card theft.
And, there are legislators with unique perspectives trying to pass bills that raise money for the state. There are the big issues like the increase of sales tax or an income tax, but just as important are the specialty issues that hit one segment of retail.
There are reductions for all pharmacies in the rates they get paid to fill prescriptions for people on the state's Medicaid program. Some pharmacies have refused to fill these prescriptions, others might decide to close.
There were proposed increases on top of the Federal increases for the cost of cigarettes. According to the National Association of Convenience Stores, cigarette sales account for 34.4 percent of all in-store sales.
What we read in our local papers is another part of small business problems. Local governments are facing their own budget cuts. As they look for possible tax increases, they also are faced with shortages in local donations to food banks and other charities that offset some of government's obligations. Theft is also on the rise in our stores.
I hope that the Legislature gets out on time this week. They are supposed to end session this Sunday, April 26th. They are still haggling over the budget and still holding hearings on bills that raise money. In the past six months, their budget shortfall has gone from $5 billion to $6 billion to $9 billion dollars. What legislators hope is that it doesn't get any worse. I think that is the one thing on which we can all agree.
RILA and NRF agree to merge
Executives of the National Retail Federation (NRF) and the Retail Industry Leaders Association (RILA) announced this week that they intend to merge the organizations.
The organizations expect the move to be completed by this summer.
"A single organization creates strategic value for members by allowing the merged association to address challenges and opportunities consistently, efficiently and effectively," said Sandy Kennedy, President of RILA. "As the process moves forward, members should expect uninterrupted service."
Among the details to be worked out is a new name for the merged organization. Also pending are merger recommendations from each association's board of directors and approval from both membership bodies.
In a separate announcement, Tracy Mullin said she would be retiring as NRF President after working for the organization for more than 30 years.
RILA Chairman Robert A. Niblock, Chairman and CEO of Lowe's Companies and NRF Chairman Myron E. (Mike) Ullman, III, Chairman and CEO of J.C. Penney Company, issued a joint statement about the merger agreement. They said benefits of the move included:
*A unified and stronger retail voice on policy, communications and public affairs issues in Washington, D.C., where both organizations are located.
*Conferences open to the combined membership of the organizations.
*A single point of integration and dialogue with state retail associations and business groups in state capitals across the country.
Niblock said the recession made it an opportune time for the retail industry to speak with one voice in solving the economic challenges ahead. The weakened economy has resulted in numerous layoffs and store closures, including the elimination of some retail chains.
"The challenges and opportunties before our members are unprecedented," Niblock said. "Now is the right time to bring these associations together."
Sources: RILA and NRF
Committee approves request for sales tax hike
A House committee Tuesday narrowly approved a ballot measure that would ask voters to approve a temporary 0.3 percent state sales tax increase to restore some of the health care spending cuts the Legislature has proposed in the state budget.
HB 2377, sponsored by Rep. Eric Pettigrew (D-Seattle) would boost state sales taxes from 6.5 percent to 6.8 percent for the calendar years 2010 through 2012. If approved by the Legislature, voters would decide the issue in a November 3 tax referendum.
The matter still would require passage in floor votes before it would go on the ballot.
Business groups including the Washington Retail Association oppose raising taxes during a recession that could further depress consumer spending and threaten the livelihoods of struggling businesses.
WRA also supports cutting back on the government overspending that contributed to the $9 billion revenue shortfall the state finds itself in.
Republicans and anti tax advocates immediately criticized the 8 to 7 vote by the House Health and Human Services Appropriations Committee. The committee vote followed by less than a week an anti-tax demonstration by 5,000 people on the steps of The Capitol and at other locations around the state and nation. Anti-tax legislators have argued that increased costs during a recession will be an unfair burden on businesses and consumers alike.
"We ask every citizen in our state to live within their means....but we don't require that for government?" said Rep. Gary Alexander, R-Olympia. "Government can and should live within its means."
Legislators are trying to make up for an estimated $9 billion revenue shortfall in the 2009-2011 budget period. They have been under pressure to avoid burdening businesses and households with higher expenses in the midst of rising unemployment, mortgage foreclosures and low consumer demand.
Though the tax increase would be temporary, increased government spending tends to be permanent, said Rep. Joe Schmick, R-Colfax.
"These taxes are scheduled to go away in a few years but the spending never does," he said.
Anti tax activist Tim Eyman predicted that voters would defeat the tax to punish government for refusing to live within its means and accused legislators of using "blackmail" to get a tax increase.
A sales tax increase would hit poorer consumers hardest. Pettigrew's bill includes a tax credit for low-income families as a way of offsetting the regressive effect of sales taxes on the poor.
The Legislature is working to approve a budget and adjourn on schedule by this Sunday.
Sources included The Capitol Record blog and KIRO - TV
Alderwood, Westlake not part of bankruptcy filing
Last week's debt reorganization filing in federal court by mall owner General Growth Properties does not include Alderwood Mall, Westlake Center or Spokane Valley Mall & Plaza.
The three Washington State properties are owned by subsidiaries in which General Growth has an interest. However, the Washington State malls were not listed among the properties that are part of the bankruptcy court proceedings.
Westlake managers received a memo last week separating the Washington State properties from General Growth's efforts to reorganize debts. The financial crunch has come about because General Growth accepted excessive debt just before the recession occurred and credit lending tightened.
"Our restructuring efforts will be invisible to the tens of thousands of customers who visit our properties every day," the memo reads. "They will see no change in the services and amenities we provide.''
General Growth owns or manages more than 200 regional malls in 44 states.
Sources include Seattle Times, General Growth Properties
Legislature enters final week
This is the scheduled final week for the Washington Legislature to meet this year.
In the final days of the 105-day session, both Houses remain at work on reconciling a state budget they can pass.
Meanwhile, the Washington Retail Association has been keeping track on scores of bills of interest to retailers. Following below is a status report on bills and issues of the highest interest:
*A temporary 0.3 percent state sales tax increase meant to recoup some health care spending cuts passed out of a House committee this week and was headed to a possible floor vote. There will be a final update next week on the outcome of the idea and whether the item makes it to a November ballot.
*Pharmacy reimbursement cuts The cuts remain in budget proposals. WRA is fighting to keep them as small as possible.
*Employer gag bill There has been no news of movement on this since the Governor and House/Senate leadership declared their lack of interest weeks ago in holding a vote.
*SB 5963 Unemployment conformity It has passed the House and would increase premiums for WRA members as opposed to the original Senate bill that would have reduced rates. WRA is lobbying for the Legislature to approve the Senate version without House amendments.
*SB 5735, HB 2010: Climate change and cap and trade EPA has announced a major policy shift that declares greenhouse gas emissions as dangerous to human health and urges Congress to pass legislation to curb it. There are two bills alive in Washington State that call for studies over the next two years on economic impacts, ways to reduce miles traveled and specific ways to impose CO2 emissions caps. This is a weakened bill from the hard and immediate emissions cap Gov. Gregoire originally hoped to impose as soon as possible.
*SB 6035 Retro The Retro proposal has been attached to the Senate budget proposal, which means action could come on Retro up until adjournment. Moderate Democrats were not interested in being lobbied to support the bill last week, even walking out of a meeting, which could be an encouraging sign there is not enough support to pass it in the House. It barely passed the Senate and would reduce and delay premium refunds after creating a bureaucratic system to track how refundable money is spent.
*HB 1402 Ex parte communications - workers' comp This bill has passed the Senate and is moving forward. It would restrict WRA's contact with doctors in cases under appeal and slow claims processing. WRA is lobbying House members not to concur with the Senate and plans to send a letter to the Governor asking for a veto if the Legislature sends it ahead for signature.
*SB 5282 BPA ban in bottles and cups It is on the Senate calendar for a vote. It would remove bisphenol A from containers used by children ages 3 and younger and exclude adult sports bottles in the regulation. If approved, it would take effect July 1, 2010.
*SB 5225 Felony threshold The new bill, SB 6167, has been introduced. It would increase the threshold from $250 to $750, which supporters believe would reduce incarcerations and save the state $4 million a year to house inmates. It does include WRA-backed language about creating an Organized Retail Theft task force and would allow retailers to collect higher fines from thieves.
*SB 5433 Local option utility tax This bill to allow local governments to charge up to 6 percent for utility taxes is not moving and probably will not be approved. This is good news as it helps to contain rising costs to retailers struggling to survive the recession.
*HB 1138 Customer use of employee only restrooms Amendments have worsened the bill and allow any customer to walk unaccompanied behind a sales counter to use an employee restroom. WRA's hope is that the House will not concur and send it back to the Senate.
*Port of Seattle clean truck program Mark testified in favor against several environmentalists and got a 5 to 0 vote by the port commission against imposing container fees. Instead, the ports of Tacoma and Seattle will use financial incentives to encourage shippers to use cleaner-burning trucks.
*HB 2358 This late proposal would increase beer and wine sales license fees and raise about $2 million a year for the state. WRA joined restaurants and microbrewers in opposing this new cost. A House committee reportedly is not eager to move the idea forward, but it represents what could be a tip of the iceberg of last-minute fee increase proposals to restore deep spending cuts in the budget proposals of the Governor, House and Senate.
*SB 6158 Mandatory paid family leave A striker amendment would authorize the Governor to launch this program as soon as funds become available. There was no money for it before the recession and budget crunch hit, but supporters now hope federal economic stimulus funds might be tapped to get it started.
Retro program urges on-the-job training
The Washington Retail Association's Retrospective Rating program is encouraging employers to provide on-the-job training to injured workers.
Several potential benefits are available to employers who offer on the job training:
*Labor & Industries may offer training fees to compensate employers for the time they invest in training. This is true if L&I has approved the training as part of a worker's training plan.
*Training allows employers to evaluate a worker prior to making a decision about making a permanent hire. A recent vocational survey has shown that employers tend to retain employees as permanent after they offer them training.
*If employers hire trained workers who are granted Preferred Worker status by L&I, the employer is exempt from paying workers' compensation insurance premiums for three years. Also, the employer is protected from insurance risk for three years if the worker re-aggravates an injury or experiences a new work-related injury or illness.
On-the-job training offers employers a chance to increase the skills of their workers while offering the employer financial benefits.
If you are interested in learning more about the benefits of on-the-job training, contact Nancy Barnes at nancy@retailassociationservices.com or contact Nancy at 360-943-9198, Extension 17.
Task force prepares for outreach effort on identity theft
Attorney General Rob McKenna's task force on identity theft met this week to review legislation from this session and to prepare for further public education efforts on this growing crime.
The group reviewed three bills related to efforts to combat identity theft:
*HB 1127, which would limit credit and debit card numbers on printed receipts to only part of the full card number. It has passed both Houses and has gone on to Gov. Gregoire for signature.
*SB 5262, which would allow law enforcement authorities to look at photos kept by the Department of Licensing to establish identification. It has passed both Houses and is ready to be sent to Gregoire for signature.
*HB 1382, which would have allowed law enforcement authorities to obtain DNA samples from suspects accused of committing criminals acts. The bill failed to emerge from committee this session.
McKenna created Washington's Law Enforcement Group Against Identity Theft (LEGIT) in 2006 to raise public awareness and to encourage prosecution of the crime.
The panel is preparing a public education effort later this year in schools, senior centers and among retailers to review legal requirements and obligations regarding identity theft.
Mother's Day spending could be down, survey says
Merchants can expect almost an 11 percent drop in average spending this year for Mother's Day gifts, a new National Retail Federation survey reports.
A poll of 8,667 consumers found Americans will spend an average $123.89 per person on Mother's Day this year, down nearly 11 percent from $138.63 last year.
The recession is forcing more consumers to budget. NRF President and CEO Tracy Mullin predicted budget-friendly ideas - discounted digital cameras, books and apparel - would be popular gifts.
Flowers and dinners also are popular ideas, the survey found.
Source: National Retail Federation
More retailers offer deals to make sales
Hyundai's offer to make car payments for customers who lose their jobs has encouraged other retailers to ease the nerves of consumers during the recession.
Read more about this retail trend by clicking here.
Source: New York Times
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.
