Every city may get a tax break used by Arlington, Marysville

It’s helped bring businesses to the two cities, so lawmakers want to make it available statewide.

OLYMPIA — Cities across Washington could soon offer a property tax break which has brought new businesses to the Cascade Industrial Center in Snohomish County.

A 2015 state law allowed only Arlington, Marysville and Lake Stevens to use the incentive to attract new manufacturers with good-paying jobs to their communities.

Last week, the state House unanimously approved House Bill 1386 to extend the law, which had been set to expire next year, and to no longer limit use of the incentive to those three cities. The bill passed 97-0 and awaits consideration in the Senate. The 2021 session runs through April 25.

“I’m happy to have this apply statewide. Many communities are going to need tools like this to be able to build their recovery, and the new language helps ensure this opportunity is uniform throughout the state,” said Rep. Emily Wicks, D-Everett, the bill’s prime sponsor. Her district includes Everett, Marysville and the Tulalip reservation.

Those changes won’t impede efforts of Arlington and Marysville to draw businesses to the industrial center, which spans roughly 4,000 acres overlapping the two cities’ borders in and around Arlington Municipal Airport. Except for the airport, the majority of the center is owned by private landowners.

“We’re ahead of the game and I’m looking forward to what this legislation will do to increase jobs and opportunities in my hometown and throughout our county,” Wicks said.

Under current law, those three cities can provide property owners an exemption on the city and county portion of property taxes due on the value of improvements, such as construction of new buildings and manufacturing facilities. Exemptions could last 10 years and are available only to qualified businesses settling in targeted areas, such as the industrial park.

It required companies to create at least 25 jobs paying an average wage of $18 an hour. Firms had until Dec. 31, 2022, to apply.

House Bill 1386 would extend the availability of the tax break through Dec. 30, 2030, and would erase restrictions on where it can be used. Under the legislation, eligible firms would need to create at least 25 jobs with an average wage of $23 per hour, plus health care benefits.

To be eligible, an industrial or manufacturing facility must be at least 10,000 square feet with an improvement value of at least $800,000.

This bill expands the categories of manufacturing and transportation businesses eligible for an exemption. And it directs cities to give priority to applicants that pay workers at prevailing wage; contract with women-, minority- and veteran-owned businesses; use state-registered apprenticeship programs; and hire locally.

And it makes clear a tax break can be canceled if a company fails to maintain 25 family-wage jobs.

When the House Finance Committee considered the bill, Rep. Drew Stokesbary, R-Auburn, tried unsuccessfully to amend it to be available statewide. He succeeded when it came to the floor March 2.

“I think it is model tax policy,” he said during the House debate. “It incentivizes good behavior. It incentivizes higher paying jobs. It is optional. And it doesn’t cost the state money.”

Rep. Ed Orcutt, R-Kalama, said this will give city leaders another tool to help revitalize the private sector of their communities.

“Having a policy like this in place for when the economy starts to improve … is going to be so important,” he said.

Jerry Cornfield: jcornfield@heraldnet.com | @dospueblos

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