This week, the Senate focused
on advancing a pro-jobs, pro-growth and pro-workers agenda to help improve
Washington’s business climate and put Washingtonians back to work again.
On Wednesday, several of my
colleagues from the Senate Majority Coalition Caucus and House Republican
Caucus joined together to announce our “Jobs Now!” plan.
The announcement came shortly
after the Senate passage of SB 5127, also known as the Worker Recovery
Act (WRA). This measure is aimed at making it easier for Washington employers
to create and maintain jobs, while significantly improving the state-run
industrial-insurance program for injured workers.
The WRA would increase the
choices available to injured workers by expanding eligibility for
structured-settlement agreements to all workers, regardless of age. This
common-sense settlement option is currently available to injured workers –
without age restrictions – in 44 other states.
The other key bill in our
jobs agenda is my permitting bill. Senate Bill 6045, if passed, would promote economic
development by enhancing the transparency and predictability of state agency
permitting and review processes. The bill reflects the state auditor’s
recommendations, published in December, on improving the timeliness and
predictability of state-agency permitting. Its goal is to provide improved
customer service and predictability for Washington job creators. Providing businesses with better information
early in the permitting process and improving overall timelines means cost
savings for both the state agencies and the businesses they serve.
 
Washington is one of approximately ten
states that charge a gross receipts tax on employers and one of only three
states with a broad Business and Occupation (B&O) tax.
Washington businesses are
taxed on their gross income – meaning they pay taxes even if they make no
profit or even lose money. This is a major burden for our employers, which
makes it difficult for the state to attract new businesses and for current
businesses to stay afloat.
The answer to this is often
to carve out exemptions to the B&O tax – industry by industry, employer by
employer. While well-meaning, I find many of these attempts to provide B&O
relief disturbing. In the spirit of full disclosure, I have introduced or voted
for many of these exemptions myself, but I am always left wondering if there is
a better way.
The purpose of the tax system
is to raise needed revenue for core functions of government, not to manipulate
the free market. Legislators should not use the tax system to pick winners and
losers through a series of exemptions, or to unfairly shift the tax burden from
one industry to another.
Real economic development
comes from creating an atmosphere for all businesses to compete and removing
some of the regulatory burdens that kill job creation.
I’ve been working for the past
several months with a number of mayors and economic development professionals
on a new approach that improves on the traditional B&O tax-relief model.
This exciting new economic development plan is based on an idea from Kennewick
Mayor Steve Young. It would take government out of the business of picking
winners and losers, and direct B&O tax relief toward employers willing to
invest back into their local business operations and the community.
Senate Bill 6515, which I introduced this week, would
require the Department of Revenue, with the assistance of the Department of Commerce,
to create a pilot program that provides an incentive for businesses to create
eligible new jobs and invest capital in this state. It would give businesses
the flexibility to invest some of their B&O taxes back into their company.
That accomplishes two
objectives. First, it gives them “skin in the game” so that they are
reinvesting in Washington – in their business infrastructure, tightening their
bond with the communities where they are located. And second, through that
reinvestment they’re creating jobs – which, of course, is what we really want.
This bill has been scheduled for a public
hearing in the Senate Trade & Economic Development Committee at 8 a.m.
on Thursday.
The Senate Energy,
Environment & Telecommunications Committee this week held a public hearing
on my Telecommunications Jobs Act – Senate Bill 6322.
This bill is about jobs,
jobs, jobs! SB 6322 will help to create and retain jobs in the
telecommunications industry. Tax incentives similar to this one are already helping
to preserve and create new jobs. An Association of Washington Business report
showed that manufacturing and equipment incentives created 58,000 new jobs
between 1995 and 1999 and added $27.5 billion to our state's economy.
According to a Department of
Revenue report, in 2009 the high-tech sector reported 114,000 jobs tied to the
R&D sales tax/deferral incentive. This bill offers a similar sales tax
exemption on the purchase of telecommunications machinery and equipment, and
any tangible personal property that becomes an ingredient or component of such
equipment.
These incentives make a
difference, and we should continue to look for ways to make Washington
attractive to new telecommunication employers. Washington has the third-highest
sales tax rate on telecommunication investments in the U.S. The current tax
policy discriminates against telecommunication investments in our state. By leveling
the tax playing field for telecommunication companies that choose to locate in
Washington, nearly 9,000 jobs will be created, $1.7 billion in new investments
will be made, and more than 100,000 new broadband connections will be added.
This bill also provides
safeguards for taxpayers and makes sure that we get the type of job creation
intended. The bill requires the Joint Legislative Audit and Review Committee
(JLARC) to review the exemption based on annual reports filed by taxpayers
using the exemption. Under the measure, the Legislature will only extend the
expiration date of the tax preference if JLARC determines the number of jobs in
the telecommunications industry in Washington has increased by 10 percent
compared to the number of those jobs at the time of enactment.
 There's one issue in Olympia that unites us all: Our love and support for our Seahawks!
On Friday afternoon, we showed that support on the floor by passing Senate Resolution 8676, which changed the name of Mt. Rainier to "Mt. Seattle Seahawks."
But we didn't stop there. We also voted to rename Mt. Rainier
National Park "12th Man National Park," and gave Sunday, Feb. 2 the
official title of "Seahawks Sunday." The name changes are only in effect until Monday afternoon, after the Seahawks win the Super Bowl.
While I reflect your passion for the Seahawks, it is also my job to be your voice in Olympia on a number of issues.
As always, it is an honor to represent you in the State Senate. Your participation in state government helps me do my job better, and I appreciate and look forward to your thoughts, questions and concerns.
Enjoy the game and GO HAWKS!
Sincerely,
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