washington business
It should ’ ve been easy . A year earlier , lawmakers came to agreement on a plan to reduce the B & O tax burden for manufacturers by 40 percent . They included that B & O tax relief as part of the final budget agreement , and it passed with a strong bipartisan majority of both the House and Senate .
Unfortunately , Gov . Jay Inslee vetoed the B & O part of the budget a week later , saying it did not go through the proper process . Although lawmakers approved the reduction as part of the budget agreement , it did not receive a separate hearing before a legislative committee , he said .
This year , lawmakers addressed that issue by introducing B & O tax relief bills during the session and holding hearings on the proposed legislation .
But this time , it ran into a new roadblock : Washington ’ s growing urban-rural economic divide .
Tax relief for manufacturers and the state ’ s urban-rural economic divide are two of the most important issues currently facing Washington employers and policymakers . Unfortunately , they became intertwined in a way that ’ s not helpful to either issue .
House Bill 2947 , co-sponsored by Reps . Mike Chapman , D-Port Angeles , and Jacquelin Maycumber , R-Republic , ended up being drafted to provide help for manufacturers only in parts of the state , while excluding manufacturers in other parts .
Proponents of the limited relief said they wanted to assist manufacturers in rural areas , and they credited AWB ’ s Rural Jobs Summit , held last October , as the impetus .
But the bill would ’ ve lowered the B & O rate for manufacturers in 30 of Washington ’ s 39 counties , leaving out not only urban areas , but also many counties that consist largely of rural areas , such as Kitsap and Benton . This year ’ s proposal would have helped an estimated 3,500 manufacturers , whereas the plan approved last year — but later vetoed — would have applied to approximately 12,500 manufacturers .
Rep . Jacquelin Maycumber , R-Republic , and Rep . Mike Chapman , D-Port Angeles , testify on their business and occupation manufacturing tax relief bill during a hearing of the House Finance Committee on Feb . 16 .
“ It ’ s time to let all manufacturers win .”
— AWB President Kris Johnson
And , as AWB and others pointed out , manufacturers are struggling statewide , including in urban areas . Yes , rural Washington needs more jobs . But manufacturing employment is down 14.2 percent in Washington since 2000 , with higher job loss coming in urban areas .
“ If you ’ re looking at this strategically for manufacturing , you need to do the entire sector ,” Dave Gering , executive director of the Manufacturing Industrial Council , told lawmakers .
Washington ’ s manufacturing sector is worth supporting . It provides great-paying jobs that build strong communities .
Already , some sectors are paying a reduced B & O tax rate . As it is , just 40 percent of B & O tax revenue from manufacturers comes from employers that are taxed at the full rate . It only makes sense to extend the same opportunity to all manufacturers , in all sectors and all parts of the state .
AWB will bring that message to lawmakers once again in 2019 . Here ’ s hoping the third time ’ s the charm . special edition 2018 9