As the Legislature enters its special session, the Everett Area Chamber of Commerce and businesses in the community are distressed about precedents being set in Olympia.
Voter approved initiatives have been scrapped and social services and education budgets continue to be threatened. Grappling with the means to close the state budget deficit, the Legislature has proposed several ideas, including additional consumer and business taxes. These measures are troubling because they would raise the cost of living and doing business in our state, thwarting efforts to give Washingtonians what they need most — job creation and preservation, and a break from the burden of increased taxes.
Of particular concern are proposals to increase B&O and sales taxes. Higher taxes for individuals and businesses will stifle our state’s economic recovery and run counter to the job creation bills the Legislature touted earlier this session. While proposals to increase the B&O tax exemption threshold to $56,000 of gross receipts may help some of our micro-enterprises stay afloat, it will do nothing for the backbone of our economy, small business. Extending the B&O tax exemption to net receipts would go much further to help our struggling small businesses.
While some businesses will be able to weather the proposed B&O and sales tax increases, some will not. Others will choose to leave the state. Continued tax increases will stifle employers’ opportunities to grow their business, and even worse, others may have to lay off employees to keep their doors open.
We understand the enormity of the budget crisis and the difficult decisions legislators have faced the past two sessions. All of us have had to make tough decisions, too — in our households, our businesses and our community organizations. There is no doubt the programs and services legislators are hoping to “buy back” with their revenue proposals are essential to the preservation of our social safety net and the well-being of communities throughout our state. No one in good conscience can argue against the need to continue to educate our children and ensure everyone in our community has access to affordable health-care options.
These are challenging times for us all — legislators, business people and citizens of our state. We have the utmost respect for those who choose to serve in Olympia — more often than not, it is a thankless job. Meanwhile, business owners are concerned about the welfare of our employees and families. Many have endured pay cuts and layoffs and decreased benefits, while companies struggle to survive and stay in business. As our legislators grapple with the state budget, we ask them to consider the impacts of proposed tax increases on the long-term future of our businesses and our efforts to preserve and create jobs in our state.
In addition to concerns about possible tax increases this year, another storm looms on the horizon. Clouds are swirling with talks of another $3 billion deficit next year. Businesses are already fearfully anticipating another round of unemployment insurance and workers’ compensation increases next year and citizens will not be able to afford another sales tax increase. Essential services have already been cut to the bone and another federal bailout is in question. This begs the question: How will we fill the budget gap next year?
After the budget and revenue packages are passed this year and the special session ends, we hope that efforts will be focused on finding long-term solutions to fix this crisis once and for all so that we are not facing the same issue next year. The business community stands ready to participate in this discussion about meaningful reform.
Cathy Reines is president/CEO of First Heritage Bank and chairs the Everett Area Chamber of Commerce Board of Directors.
Andrew Ballard is president of Marketing Solutions, Inc. and a member of the Everett Area Chamber of Commerce Board of Directors.
Mark Lewinski is partner &president/CEO of Kirtley-Cole Associates and member of the Everett Area Chamber of Commerce Board of Directors.
Louise Stanton-Masten is president/CEO of the Everett Area Chamber of Commerce.
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