washington business
Consider the potential list of expenses:
Education funding could cost $1.5 billion just to keep up
with the requirements of the McCleary decision. Attempting
to satisfy the requirements from Initiative 1351, the voterapproved class-size measure, would add billions more. And
that doesn’t include the cost of building all the new schools
that would be needed to accommodate new teachers.
And then there is the cost of the various climate-related
policies Gov. Jay Inslee is weighing. They include everything
from a cap-and-trade system, a carbon tax and coal by wire,
to carbon limits, clean energy regulations and new energy
efficiency requirements.
Transportation spending is sorely needed, along with
accompanying reforms to the state Department of Transportation. The state ranks 36th in the nation for road
conditions, 38th for statewide commute times and 41st for
bridge conditions.
But repairing Washington’s crumbling highways and
neglected bridges will be expensive;
finishing some of the major unfinished
projects such as Highway 167 in Pierce
County, Highway 509 in Seattle and the
north-south corridor in Spokane will
only increase the bill.
Add to the mix the potential for
costly new water quality regulations,
possible cost-of-living raises for state
employees, a likely renewal of the ongoing debate about
eliminating tax incentives, and a raft of human resourcesrelated costs that are likely to be debated — a minimum wage
hike, mandatory sick leave, mandatory vacation, mandatory
401(k) — and the total price tag for everything that could
emerge from this year’s session is staggering.
David Schumacher, director of the state Office of
Financial Management, told AWB’s Government Affairs
Council in November that the budget gap entering the
2015 session could be as high as $2.5 billion — even with an
estimated $2.8 billion increase in revenue over the previous
two-year budget.
Weigh this against the list of policies that lawmakers are
likely to consider to help employers and encourage economic
growth and the contrast is stark indeed. One of the few
possibilities is reinstating the tax incentive for research and
development that expired at the end of 2014.
The budget gap entering the
2015 session could be
as high as $2.5 billion—
even with an estimated
$2.8 billion increase in revenue
over the previous two-year budget.
what employers are paying
at a glance
Washington’s economy is recovering from the recession, but the
budget challenges facing the Legislature remain intense.
In addition to satisfying the demands of the McCleary ruling,
lawmakers and Gov. Jay Inslee are expected to debate expensive
climate policy initiatives, water quality rules, transportation funding
and a multitude of human resources-related proposals, everything
from raising the minimum wage and requiring paid sick leave to
mandatory paid vacation and 401(k) retirement plan.
By comparison, the list of measures aimed at improving the
economy and helping Washington employers compete nationally
and globally is not expected to be long.
www.OpportunityWA.org
28 association of washington business
As lawmakers debate how to balance the budget and
how best to protect the environment, it’s important to
remember that employers are already doing plenty to
help in both regards.
For example, employers already pay nearly 54
percent of all state and local taxes, ranking Washington
ninth highest in the country.
That’s one of the reasons why Rep. Reuven Carlyle,
D -Seattle, said he spent time between legislative
sessions exploring the idea of a capital gains tax aimed
at high-income individuals.
“If you accept that the core tax structure has a
negative impact on business — which I do — where do
you go?” Carlyle told AWB members in November.
Wo r ke r s ’ c o m p e n s a t i o n a n d u n e m p l o y m e n t
insurance also cost more in Washington than in most
states, and the statewide minimum wage has been the
highest in the country for years — well before the
current minimum wage debate began adding to the
state’s overall business costs.