washington business
washington is the eighth-most regulated state in the nation. the impacts are significant, as a new awb-commissioned report details.
When leaders at Heritage Distilling looked for ways to keep their Washington tasting rooms viable, one of the most basic business strategies— raising prices— wasn’ t available. A state regulation caps how much revenue a distillery tasting room can earn from on-site drink sales. Raising prices might have helped the bottom line, but it also would have pushed the company out of compliance.
In the end, Heritage made the difficult decision to close their tasting rooms, exit Washington and shift the business to Kentucky. The decision was driven by many factors including rising state taxes and market demographics, but the tasting room regulation was cited as one of the reasons.
The story should serve as a wake-up call for lawmakers to reexamine how Washington’ s regulatory structure affects the businesses it’ s meant to support.
A certain amount of regulation is essential to protect the health and safety of workers, communities, customers and the environment. But Washington employers have struggled for years under the weight of a regulatory burden that seems out of scale with the rest of the country. Just how many regulations do we have— and how many should we have?
To get a better sense of the true number of regulations on the books in Washington— and the economic consequences associated with them— AWB commissioned a team from the firm StratACUMEN
Heritage Distilling founder and CEO Justin Steifel was in expansion mode when he gave the 2021 Manufacturing Week bus tour a look at his new operation in Tumwater. Now, due in part to Washington’ s heavy regulatory environment, he is shutting down most operations in the state.
to examine the state’ s regulatory environment, compare it to other states, and offer recommendations for improving it.
Their report, which was finalized and released earlier this year, found that Washington is the eighth-most regulated state in the country with more than 200,000 total regulations on the books. Labor and workforce regulations accounted for nearly a quarter of the total at more than 45,000— far exceeding the national average of approximately 7,000.
No matter what you make, grow or sell, you can bet there’ s a long list of regulations governing what you can and cannot do, how you must do it and who needs to know about it.
At A Glance
Washington is the eighth-most regulated state in America, with more than 200,000 regulations on the books.
Almost a quarter of them are labor and workforce regulations. With more than 45,000, Washington far exceeds the national average of about 7,000.
Half of Washington’ s regulations are duplicative or redundant, according to the study. Up to 70 % of them qualify as red tape. unintended consequences
There isn’ t a regulation that exists that didn’ t sound like a good idea to the people responsible for putting it on the books. Regulations not only keep workers and consumers safe, but they also ensure fair competition among businesses, safeguard the environment and guard against corruption. Poorly regulated states and nations risk crises, fraud and instability.
But the StratACUMEN study shows that too many regulations— and regulations that haven’ t been well thought out— can carry unintended consequences that disproportionately fall on small businesses and low-income individuals. They include:
• Slower innovation and economic growth: Regulations create a high barrier for new businesses and can discourage innovation as companies become focused on compliance rather than research and development. This can ultimately stifle competition, leading to higher prices and reduced consumer choice.
38 association of washington business