Working with chambers a key to Government Affairs political success By Jan Teague, President/CEO
This week I met with Bob Green, the Executive Director for the Washington Chamber of Commerce Executives. I have had the great fortune of working with Bob for almost fifteen years now. As the years have gone by, I have seen significant change among chambers that have increased their involvement with Government Affairs programs. Bob agrees that many have developed strong relationships with the elected officials.
We talked about how the Democratic majorities tend to be less interested in business concerns and more interested in social services, increasing employee benefits, and education. While these are good areas, they are not business focused.
How do local communities get out of a recession when businesses are not doing well? Bob and I agree that this question can't easily be answered. But what we do know is that Chamber of Commerce members can talk with their legislators about new laws that will only make matters worse. That effort is a chamber strategy that helps its business communities as they struggle to survive.
I plan to do what I can to help the state's chambers with information on issues as they arise. Over the years WRA has provided information and worked in a number of cities where we were asked by the Chamber of Commerce to participate. This year, the City of Spokane is facing a local initiative that would raise the minimum wage to $10.60 per hour. We are working with the Spokane Chamber on this issue.
I think the future for an effective Government Affairs program lies in the local communities where voters are local businesses with local employees. As chambers become more and more engaged having Government Affairs programs, their success will show itself in a healthy business climate. In fact, their efforts will benefit the entire state.
I look forward to discussing new partnerships with chambers during the summer and at their annual meeting this fall. The business climate needs this discussion and those of us who represent business need to make sure we stress the importance of it.
Obama supports federal health care plan
President Obama has written a letter to key U.S. Senators in which he endorses the idea of a government-run health insurance option for individuals to purchase.
Obama's letter comes as Senator Edward Kennedy (D-Massachusetts) has introduced a health care bill that endorses a pay-or-play mandate on employers, but does not spell out how to finance the bill. Obama wrote to Kennedy and Max Baucus (D-Montana), chairman of the Senate Finance Committee.
The Retail Industry Leaders Association reported on the Obama letter this week. RILA and other business organizations oppose health care reform proposals that place overly burdensome requirements on employers and threaten to shift employees away from self-insured health plans.
In his letter, Obama said he hopes Congress can complete health care reform by October of this year.
To read RILA's health care reform preferences, click here.
Source: RILA
New seller's permits could be issued by October
The Department of Revenue may begin issuing new, free seller's permits to wholesalers who forgo paying sales taxes by October of this year.
The new permit replaces self-assigned resale certificates that wholesalers have been using. The law, passed in the 2009 Legislative session, goes into effect in January.
Rob Rice, assistant director of taxpayer services for the Department of Revenue, updated business leaders this week on the new permit system. He estimated wholesalers who resell products they purchase could begin receiving department-approved permits by October. He said other wholesalers who must apply for the permits can expect a reply to their application within 60 days, but he added the department was aiming for a 10-day response time.
The law applies to any business or contractor who obtains a tax exemption on products he or she buys for resale.
The Legislature approved the new permitting system to reduce abuses in which some certificate holders were buying items tax free that they did not re-sell, as required by law. Under the law, the final consumer of products pays the sales tax when businesses that re-sell products claim a tax exemption at the initial purchase.
Rice said his department still was determining criteria for who needs to obtain the new permits. He estimated the state would wind up issuing about 240,000 permits that must be renewed in intervals ranging from one year to four, depending upon the type of business.
For more information on how to meet the requirement, click here.
UI trust fund balance is $3.5 billion State's shared work program grows during recession
The state's unemployment insurance trust fund carried a $3.5 billion balance as of April this year.
The balance was down from a peak of $4.1 billion in November of 2008, according to an Employment Security Department report.
The latest balance means the state could pay benefits for 18 months under recession conditions. The fund's reserve adequacy is measured by calculating the number of months benefits could be paid in a recession.
The state reviews the trust fund balance on a quarterly basis in concert with state revenue reports and forecasts from the Economic and Revenue Forecast Council.
In the past year, the state's seasonally adjusted unemployment rate grew from 4.9 percent in April 2008 to 9.1 percent this past April. In March, the forecast council revised its forecast to assume higher unemployment rates than were forecast last November.
The council now projects an average state unemployment rate of 9.2 percent this year and 10 percent next year. It predicts unemployment rates will begin to fall in 2011, to 8.4 percent in the fall of 2011 and decline slowly to 6.7 percent in the fall of 2015.
In a related matter, the state's shared work program has grown as the economy has weakened. The program, created in 1983, allows employers to avoid layoffs by temporarily reducing the hours of employees and receiving partial unemployment benefits to replace a portion of the lost wages.
As of May, 2009, about 1,800 employers including 144 retailers were participating in the program. Last December, about 500 employers were participating in the program, according to an ESD report. The number of employees in the program has grown from about 16,000 in December of last year to about 38,000 in May of this year.
Source: Employment Security Department
State economist foresees slow economic recovery
The state's chief economist expects the recession to bottom out by September but unemployment rates to rise into the second quarter of next year.
"The worst of the 'Great Recession' is behind us," wrote forecaster Arun Raha. "We are seeing the first tentative signs that the trough of the recession is near."
Credit lending is beginning to loosen and homes sales have recently shown a modest uptick, Raha observed in the latest Economic and Revenue Forecast Council report. But he cautioned recovery may not be rapid.
Raha said the state's unemployment rate, though unchanged in April at 9.1 percent, was the highest level since 1984.
"We expect that the state's unemployment rate will continue to rise, even after the recovery is underway, and to peak at 10.6 percent in the first half of 2010," Raha said. "The recovery is likely to be gradual, or U-shaped, rather than V-shaped."
Drags on the economy include stubbornly weak consumer confidence and the inability of banks to clear bad loans. The global recession also especially hurts Washington, the nation's most trade-dependent state, Raha said.
Consumers will play an important role in the pace of recovery, he said.
"Our baseline expects a gradual return of confidence at the same pace as the economy," Raha said. "If confidence returns quicker, the recovery will come quicker."
Western Washington pending home sales jumped nearly 18 percent in May compared to the same month last year, the Northwest Multiple Listing Service reports.
The sales uptick was the rallying point for real estate agents looking for recovery in the struggling real estate market. Its health is related to retail sales because home buyers typically make retail purchases to decorate or equip their new homes.
Though encouraged by May sales, agents stopped short of declaring a real estate recovery. Median sales prices are down 10 percent compared to a year ago and foreclosures continue to be a drag on the market, agents said.
Regardless, one agent said sales are the best they've been in the past two years.
"In many neighborhoods where just a few years ago broad affordability had all but vanished, lower prices, flexible terms and very low interest rates are pushing inventory absorption for single-family homes to levels not seen since 2007," said Ron Sparks, Managing Vice President for Coldwell Banker Bain.
The broker-owned Northwest Multiple Listing Service serves 19 western and central Washington counties. For the full statistical report comparing May sales with prior real estate activity, click here.
Source: Northwest Multiple Listing Service
Retail sales decline in May
Retail sales fell farther than expected in May, according to a report from the International Council of Shopping Centers.
ICSC reported sales fell 4.6 percent last month compared to the 2 percent decline the organization expected. Nearly two-thirds of retailers surveyed by Thomson Reuters missed their May sales expectations.
Similarly, retailers in Washington State paid 7.7 percent less in excise taxes to the state in April, compared to the same month a year ago. The biggest percentage declines were among auto dealers, down 20 percent, and furniture stores, down 19 percent, the Department of Revenue reported.
Retail categories recording excise tax payment gains to the state included food and beverage stores, up 8.3 percent, and drug stores, up almost 4 percent in April compared to the same month a year ago.
Sources: Los Angeles Times, Department of Revenue
Manufacturers pay back e-waste loan
Electronics manufacturers have repaid the state a $500,000 grant to cover start up costs for the E-Cycle Washington recycling program.
Since starting last January, the program has grown to 245 statewide collection sites for free recycling of TVs, computers, monitors and laptops.
The Department of Ecology reports that consumers have deposited 15 million pounds of electronic equipment so far. The program protects the environment from the heavy metals and chemicals designed into electronics.
"Televisions have been the largest proportion of our recyclables," said John Friedrick, executive director of the Washington Materials Management & Financing Authority, which is run by manufacturers. "With the national switch from analog to digital TV signals delayed until June 12, we may see another jump in folks trading up to new sets."
The 13th Washington Small Business Fair is scheduled on September 12 at Renton Technical College.
The free event aims to assist new and existing small businesses to grow and survive the recession.
The fair requires no pre-registration. Speakers will be unpaid and no private vendors or selling will be allowed during the event.
Seminars range from understanding taxes to business planning and from marketing to starting a Website. A list of exhibitors is expected to be posted at the fair's Website, www.bizfair.org, early in July. You can also visit the site for directions to the college and updates about the fair.
The Washington Retail Association participates on a planning committee and will exhibit at the fair. There is no single fair sponsor but organizations such as the Internal Revenue Service, Small Business Administration and various state government departments participate in the planning.
About 50 exhibitors participate annually at the fair, attended by up to 1,000 visitors. Business networking is encouraged during the event.
State Revenue Director to head national tax group
Department of Revenue Director Cindi Holmstrom has been elected President of the Federation of Tax Administrators.
The FTA, based in Washington, D.C., is a nonprofit association of taxation and revenue departments from across the nation. For the next year, Holmstrom will lead the work of an 18-member board of trustees. The FTA's mission is to improve the standards and methods of tax administration.
Washington has been focusing on efficiencies, cost savings and effective tax payment compliance techniques prior to Holmstrom's selection to oversee the national organization. She expects to complete the bulk of her new duties by teleconferencing from Olympia.
"I'm honored by this opportunity to work with other states to improve the fairness and efficacy of tax administration," Holmstrom said. "Washington has benefited immensely by its association with the FTA, and I expect that to continue into the future."
Source: Department of Revenue
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.
