Editorial: Tax cut for employers could spur reinvesting

If Washington state legislators are going to grant Gov. Chris Gregoire’s appeal for a one-year cut in unemployment taxes, they have less than a month to do it.

As she reminded them in Tuesday’s State of the State address, the changes have to be done by Feb. 8 or the Department of Employment Security won’t have enough time to reconfigure its computers and get accurate tax-rate notices distributed for the first quarter of the year.

It shouldn’t be a hard call.

At more than $2 billion, the state’s Unemployment Trust Fund is sound and even robust at present, especially when compared with most other states, many of whose funds are insolvent. But many businesses are struggling and many former employees are out of work.

As of November, Washington’s fund was healthy enough to sustain more than 14 months of benefits, about twice what the Employment Security director says would be sufficient to avoid jeopardizing it.

With such a comfortable cushion, you’d think much of that money could be put to more productive use by returning it to the economy where so much need exists. And you’d be right.

Under the governor’s plan, the tax rate would be trimmed by $300 million for 2011, providing a tax reduction for 90 percent of the state’s employers, who could use it for badly needed reinvestment. That could preserve jobs in an economy burdened by stubbornly high unemployment.

The last thing that’s needed, however, is a 36 percent hike in the unemployment tax, which is what’s in store if lawmakers don’t step in.

As various state business leaders have observed, Gregoire’s idea is positive even if it is only part of what’s needed to truly revive Washington’s economic pulse. Still, it’s a promising and reasonable step, and legislators should not squander this chance to take it.

The proposal also includes a package of corrections in the training benefits that assist displaced workers who need new occupational skills if they’re going to fit into a workplace where some careers are simply disappearing. To qualify for some $98 million in federal incentive funding, the state needs to make its training benefits program more flexible and accessible.

In a 105-day legislative session that must focus on a more challenging biennial budget than usual, passing substantive legislation in the first four weeks is no simple task. Unlike too many Washingtonians, state lawmakers have a job. They should do it promptly.