Five steps the Legislature should take to support business in Washington

The Washington State Legislature will begin its 60-day session on January 8. The main focus of this year’s legislative session will be developing and approving updates to the three state budgets – the operating, transportation, and capital – for the 2023–2025 biennium. The Legislature will likely make adjustments to various laws, including in energy, natural resources, healthcare, education, and other areas. The legislative session will be very fast-paced.

Decisions the Legislature makes are very important to our state and its efforts to promote a supportive business climate. Most of the revenue that funds state operations is generated from sales taxes and business taxes. For the state to maximize its revenues, our business sector needs to thrive. While there are many steps lawmakers should take to better support Washington businesses, here are five ideas:

1.              Business and Occupation Tax Reforms

Washington State implements a Business and Occupation (B&O) tax, which is applied to the gross receipts of all products and services. The rate depends on the type of business, such as manufacturing, wholesaling, or retailing. The tax applies to “gross” rather than “net” income of businesses, meaning that businesses are taxed even if they don’t earn a profit. This tax structure is especially burdensome for high-volume, low-margin businesses. Reforms to the B&O tax would impact revenues in the short term, but would help businesses be successful over the long term. This would keep more people employed and generate additional economic opportunities.

2.              Climate Commitment Act Changes

The state’s Climate Commitment Act was approved by the Legislature in 2021 and began in 2023. It is a comprehensive program aimed at reducing greenhouse gas emissions by requiring the purchase of allowances in a cap-and-trade program. Many of us who voted against it expressed concerns about the program’s likely impact on gas prices, which analysts now estimate is nearly 50 cents extra per gallon. I support the environment and I am a clean energy advocate, but high gas prices can have devastating impacts on senior citizens, working families, and businesses. High gas prices affect us all with increased travel, grocery, and supply chain costs. I don’t expect the program to go away, but adjustments should be made to lessen its economic impact.

3.              Refocus Education on Academics and Job Skills

With over 1 million students in the state public school system, K-12 education is critical to workforce development. Washington businesses rely on students being college or career-ready. Per student expenditures have grown to over $17,000 per year with funds supporting pre-kindergarten programs, multiple meal services, childcare offerings, social supports, healthcare in schools, and other functions. There is no doubt that students have many needs, which our schools can help facilitate, but with only 50% of students meeting English standards and only 40% meeting Math standards, we must return academics and job skills back to top priorities. Our school system must work for all students, so they are prepared to succeed and contribute to our global economy.

4.              Preserve and Improve our Transportation System

Washington businesses depend on a high-functioning transportation system. This is key to getting crops to market, creating efficiencies in the supply chain, and improving commutes for employees. The Legislature has increased funding for the preservation and maintenance of our roads and bridges, but the funding has unfortunately not kept pace with inflation, nor with the additions to the transportation system over time. The preservation of our existing system is more important than new projects, but new projects are also needed to keep up with our growing population and to keep traffic moving. The state approved a new 16-year, $16.9 billion package in 2022 for statewide transportation investments. We need to ensure that these projects get completed as scheduled so that Washington businesses can benefit from a reliable statewide transportation system.

5.              Continue Efforts on Housing Solutions

Affordable housing continues to be a struggle in nearly every community, although what is characterized as “affordable” varies from place to place and is the source of substantial debate at the State Capitol. The Legislature has made record investments recently through its capital budget to fund housing opportunities in Washington state, but more work remains to be done. Various regulatory and land use reforms could be made to slow down the rapidly escalating costs associated with homebuilding. Many new laws and housing programs have recently been implemented, which may take some time to produce results. While these new policies get implemented, we should be mindful of other opportunities because we should all recognize that stable housing is fundamental to nearly every aspect of life. For businesses, having access to a reliable, local workforce is vital.

Thank you for the opportunity to serve

While many state policy areas interest me, supporting the creation of jobs will always be a priority. Many of you may not realize but my father Buell Hawkins was a partner with Valley Tractor & Equipment for several decades. I spent many afternoons playing on tractors at his Chelan and Wenatchee stores. Having been raised as the son of a small business owner, I have a deep appreciation for our business community. To our local businesses, I am proud to support you in the Washington State Legislature. Thank you for the opportunity to serve as your State Senator.

Brad Hawkins is a Washington State Senator for the 12^th Legislative District. He was awarded the 2022 Guardian of Small Business Award by the National Federation of Independent Business and has been recognized by the Association of Washington Business for his voting record in support of our business community.