Independent Business Association

 WEEKLY LEGISLATIVE REPORT

4/30/09

 

Contents (Click on a subject below to view it)

 

HUGE UNEMPLOYMENT ISSUE FOR SMALL BUSINESSES – CALL THE GOVERNOR TODAY!

Call Governor Gregoire TODAY or as soon as possible, and ask her to “sign SB 5963 – the unemployment conformity legislation – as it passed the Legislature.”  The Governor must soon make a decision whether to sign SB 5963 as it passed the 2009 Legislature, or veto the “voluntary quits” section of SB 5963.  Your calls are critical to convincing the Governor to sign SB 5963 as it passed the 2009 Legislature and NOT veto the “voluntary quit” section.  This is important to controlling our state’s future unemployment insurance costs.  See below for more details.

 

How to Contact The Governor:

·         Her phone number is:  360-902-4111

·         First, be polite!  Being demanding or nasty will backfire on all of us.

·         Clearly identify this issue – “SB 5963 – the unemployment conformity legislation”

·         Next, clearly state your position:  “Please sign SB 5963 as it passed the Legislature with no vetoes”

·          Finally, provide one or two concise reasons to support your position.  For example, “SB 5963, as it passed the Legislature, is the other half of an understanding reached earlier with the Legislature to both increase benefits, and fix Washington’s unemployment law and bring it into conformity with federal unemployment law.  The benefit increase was passed and is already law.  SB 5963 is the other half of that understanding.  The voluntary quit provision is consistent with other states and reinstates what the 2008 Legislature previously passed and that Governor Gregoire signed into law in 2008.    

·         Finally, follow-up with a short note to the Governor saying the same thing to get the most from your efforts.  Her mailing address is:

The Honorable Christine Gregoire

Governor

PO Box 40002

Legislative Building

Olympia, WA  98504-0002

 

Dear Governor Gregoire

 

Background

SB 5963 was one of the BIGGEST legislative battles of the 2009 Legislative Session and directly affects EVERY Washington business that has employees.  SB 5963 does 4 very important things:

1.         Brings Washington State into conformity with federal unemployment laws – required by federal law – to avoid Washington employers having to pay 5.4% higher federal unemployment taxes – or up to $378 per employee per year

2.         It reduces some state unemployment tax rates.  For the past several years, Washington employers have been overpaying into the state’s unemployment insurance trust fund that has resulted in excessive amounts in that trust fund.  Excessive unemployment taxes hurt Washington businesses and must be corrected.

3.         After a HUGE battle with the labor unions, SB 5963 does NOT increase unemployment benefits.  The Washington State Labor Council did everything they could to increase state unemployment benefits and we, the business community did everything we could to stop these benefit increases as they would simply mean higher employer-paid unemployment taxes.  The good news is, the business community, in the closing hours of the 2009 regular legislative session was able to stop the increased unemployment benefits that had previously been approved by the House of Representatives.

4.         STOPS the expansion of unemployment eligibility for workers who voluntarily quit.  In 2003, the Legislature passed a law allowing some workers who voluntarily quit their jobs to be eligible to collect unemployment benefits.  The 2003 law listed 11 specific reasons why someone who voluntarily quit their job could collect unemployment benefits.  The Legislature re-passed that 2003 law again in 2008.  Later in 2008, the Washington State Supreme Court ruled that the law passed by the 2003 Legislature and the 2008 Legislature actually allowed other reasons for people who voluntarily quit to collect unemployment benefits if they quit their job for “good cause” and then allowed the Employment Security Department to determine what “good cause” is.  That 2008 Washington State Supreme Court decision will allow many people who voluntarily quit to get unemployment benefits when they shouldn’t.

 

You will SAVE on your state unemployment taxes if the Governor signs SB 5963 as it passed the Legislature!

 

The Governor needs to hear from YOU NOW!   The labor unions around Washington State are slamming the Governor with phone calls to veto SB 5963, or at least veto the “voluntary quits” section of SB 5963.  YOU, your family members, and as many other small business folks you can contact, need to call Governor Gregoire’s office and ask her to:  Please sign SB 5963 – the unemployment conformity legislation – as it passed the Legislature (more details above).   Without phone calls from YOU, the Governor will feel you don’t care what she does and you will not enjoy the savings from SB 5963 as it passed the Legislature.

 

Feel free to forward this information to every small business owner you know and ask them to IMMEDIALELY call the Governor’s office and ask her to:  Please sign SB 5963 – the unemployment conformity legislation – as it passed the Legislature   She will be making her decision in the next few days.

 

 

THE REGULAR LEGISALTIVE SESSION ENDED APRIL 26th – MORE TO COME SOON?

Yes, the 2009 regular session of the Legislature did end at midnight on April 26th as required by the state’s Constitution.  A great deal happed that affects your small business during the 2009 Legislative Session and we will be providing you more information in the upcoming May 2009 IBA Small Business Report.

 

But, the Legislature is VERY LIKELY to return in a few short weeks to finish up on some unfinished items.  The hope is, they will return for just a day or two, do what the must do and again end this Special Legislative Session.  That is the hope of almost everyone – except those who what something more.  Once the Legislature starts a Special Legislative Session, the state’s constitution gives them up to 30 days to stay in session.  You must know that there are many interest groups doing everything they can now to get Legislators to do more than the few “clean-up” unfinished items they need to do.

 

The unfinished items are a few pieces of legislation necessary to implement the 2009-2011 state budget.  As you will see in the next item, the 2009 Legislature passed a no new taxes state budget for 2009-2011 after weeks of trying to find a tax increase that they could convince voters to approve.   When it because apparent in the closing days of the 2009 Legislature that the public would not support ANY tax increase, the Legislature was forced to pass a no-new-taxes budget.  There are many funds shifts and other technical bills to make that possible and to get the most from every available dollar available.  Time ran out as the clock reached mid-night on Sunday, April 26th.  The Washington State Supreme Court has previously ruled that the state’s constitution does not allow any legislation enacted after mid-night of the last day of any legislative session to become law.  The clock ran out before the Legislature could get these few remaining pieces of legislation necessary to implement the budget passed.  Those issues are:

·         SB 6183 immigrant offenders (provides for deportation) – reduces state costs for prisons and corrections

·         SB 6160 sentencing (creates broader ranges, more discretion for judges) – reduces state costs for prisons and corrections

·         HB 1776 school levies (lets school boards raise more money from levies) – allows voters to approve higher local school levies to replace cuts in school funding by the Legislature

·         Suspending the Initiative 732 pay increases for teachers as previously approved by the voters

 

LEGISLATURE APPROVES NO-NEW-TAXES BUDGET

Yes, the 2009 Legislature has approved a no new taxes budget after doing a great deal of testing and polling to see if voters were willing to approve tax increases.  With polling showing only about 40% of voters willing to vote for any tax increase, and the requirement that voters or 2/3s of the Legislature (not the votes in the Legislature for this) to approve a tax increase, Legislators decided to pass a no-new-taxes budget on the last day of their constitutionally limited 105 regular legislative session.

 

This new budget is built on using federal stimulus money, using one-time-funds previously targeted for public construction projects, and some other very interesting assumptions to balance this 2009-2011 state budget.

 

Total General Fund budget for 2009-2011:  $31.962 billion  (for comparison purposes, the state’s 2007-2009 General Fund budget was:  $33.145 billion)   As you can see, the new budget is about $1.2 billion less than the previous 2 year budget.  Very interesting given all the talk about a $9 billion revenue shortfall for this new budget.

 

BIG CHANGE COMING FOR RESALE CERTIFICATES

Part of the last minute budget rush was to find likely new sources of revenues.  At one point, SB 6173 proposed to:

·         Require all construction contractors to pay sales taxes on all of their materials when they bought them and to get credit for the sales taxes they paid from the sales taxes they collected from their customers, and

·         Eliminate the current state Resale Certificate and replace it with a Resale Permit.

 

IBA because very vocal about the requirement that contractors have to pay sales tax up-front on their materials.  Within hours, IBA was leading negotiations for the business community on SB 6173.  We were told we had 2 hours to come up with a solution that worked.  IBA and others in the business community agreed to:

·         NOT requiring contactors to pay sales taxes on their materials up-front, and

·         Replacing the current Resale Certificate with a Resale Permit due to the high level of abuse of resale certificates.

 

SB 6173 passed as IBA and others in the business community had negotiated and the current Resale Certificates will no longer be accepted beginning on 1/1/2010, but with be replaced with a Resale Permit that will only be issued to businesses that clearly justify the need for such a Resale Permit.  These new Resale Permits will no longer use the C 6xx number but will have a special new number.

 

IBA is already very heavily involved in the development and implementation of this new Resale Permit system to make the transition as smooth as possible.

 

IBA will be keeping you informed.

 

LOTS MORE – SEE IBA’s SMALL BUSINESS REPORT

There is a lot more to report on the recently concluded 2009 legislative session as well as other issues affecting small businesses.  We will share all of this with you in your IBA small Business Report that will be sent to you on May 15, 2009.