Exports, credit, taxes among initiatives to boost businesses

Washington Gov. Chris Gregoire Tuesday ordered state agencies to develop programs and institute reforms that will boost small businesses faltering in the economic slowdown.

The initiatives range from help with exports, to improving access to credit, to alleviating the burdens imposed by the state’s complex tax structure and regulatory requirements.

The economy is changing, businesses are leaner, and government must adapt, too, she said.

“Small business represents the backbone of the economy in our state,” said Gregoire, noting that 95 percent of Washington businesses have fewer than 50 employees.

Gregoire said she has been meeting with small-business representatives for several months. In May, she brought U.S. Treasury Secretary Tim Geithner to Washington to meet with exporters and community bankers.

Heidi Hughes, Gregoire’s executive economic policy adviser, said Washington will receive two pots of federal money to increase small business access to credit; $20 million to be administered by the state, $600 million to be made available to community banks.

Gregoire said the state has provided some relief from the business and occupation tax to small businesses, especially those in rural areas. But business owners want a simple way to deal with the variation in sales tax rates across the state, and relief from the penalties they face if they fall behind, or violate regulations, she said.

“Come talk to us,” she said. “We don’t want to assess a penalty.”

Gregoire, who has already launched an export initiative, said she wants 30 percent of state businesses, and 80 percent of those in agriculture, to be exporters by 2030.

Hughes said the state is helping jet boat builders in the Lewiston-Clarkston area find new markets in Germany.

Despite claims it will hurt small business, Gregoire said she will vote for a proposed state income tax. The estimated $2 billion in new revenues will restore funding for education and health services that have been her priorities, she said.

“I’m dismantling everything I believe in,” Gregoire said.

Patrick Connor, state director for the National Federation of Independent Business, said the governor’s proposals could be helpful, if the state follows through. Otherwise, he said, the order will be nothing more than “warmed-over promises.”

The governor announced in August her administration would look at moderating penalties, and suppressing an “underground economy” that puts legitimate businesses at a disadvantage, he said.