Kris Johnson and Alisha Benson: Employers need help, not harm, from lawmakers

By Kris Johnson and Alisha Benson

For examples of pandemic-level resilience, look to the neighborhood coffee shop that switched from indoor service to curbside service. Or to the local paint store that’s delivering tester cans to front porches. Or the day care providers keeping our kids safe and their parents at work.

Small-business owners kept employees working and met customers’ needs during this difficult time, which required ingenuity, adaptability, and likely sleepless nights. These businesses’ survival is admirable, as many Spokane-area businesses have permanently closed, and many more continue to struggle.

So why are state legislators discussing adding taxes to small businesses now, when they’re fighting to simply survive? Washington’s revenue is strong and expected to keep growing, and more federal aid is on the way. Our lawmakers must act to prevent more closures and to aid our economy’s strong recovery – starting by rejecting proposals to raise taxes on businesses.

Washington is set to receive nearly $11 billion as part of the federal American Rescue Plan. And the state’s most recent economic forecast shows a hefty $5 billion in sales tax revenue over the next five years.

Yet the majority Democrats in both the House and Senate have proposed major spending increases in the next state budget, creating a new tax on capital gains and drawing down the state’s rainy day fund.

Few voters support the idea. A February poll of Washington voters conducted for Opportunity Washington found only 19% backed raising taxes now to pay for additional public services. Most voters said it’s better to reduce taxes to help businesses survive.

The state doesn’t need the money. Despite the pandemic, Washington’s economy has grown. Forecasters predicted a deficit last fall, but our tax collections have increased thanks to a remarkably stable tax system and strong sector-based performance. There’s no deficit. And revenue is expected to continue growing, even without tax hikes.

Meanwhile, many of the 332,000 jobs lost last spring, when the pandemic brought our economy to a near halt, are back.

Yet that progress has been uneven. While parts of Washington’s economy have flourished, our restaurant, hospitality, event, retail and manufacturing industries are among those suffering the most.

While a few counties saw healthy unemployment rates in December, unemployment in most corners of the state was higher. Ferry, Pacific, and Grays Harbor counties saw rates above 10%. Spokane County’s rate was 7.4%. (Washington in the Making’s “vitals” tool, at awbinstitute.org/vitals, makes it easy to compare county data.)

And many small businesses – which provide more than half of Washington jobs, according to the U.S. Small Business Administration – remain on the edge of survival. In December, most U.S. small businesses said they expected the worst was yet to come. Half said they anticipated being able to operate for a year or less before closing permanently, a U.S. Chamber of Commerce poll found.

The AWB Institute, an arm of the Association of Washington Business (AWB), recently launched “Washington in the Making,” an initiative for economic recovery for all people and all communities. Thriving small businesses are integral to our communities and to recovery. A few other ways lawmakers can help are as follows:

Create tax and fiscal policy that helps, not hurts, small businesses. Besides rejecting tax hikes, create B&O tax incentives that reduce manufacturing costs here.

Keep schools open and safe. Prioritize reopening K-12, higher-ed and job-training classrooms. Employees, working to support recovery, need to know their children are learning in safe environments.

Address the child care shortage, made worse by the pandemic. Even before the pandemic-forced closures, finding child care was difficult in Spokane County and throughout Washington. A lack of affordable child care makes it hard for employers to recruit and retain workers, and the economy suffers. Pass the Fair Start for Kids Act to boost subsidy rates and expand health care access to providers.

Invest in transportation to create jobs and infrastructure. Let’s finish the North Spokane Corridor, then tackle other regional transportation needs.

Support a strategic capital budget that puts people back to work. The capital budget includes projects such as the construction and repair of public buildings. Prioritize projects that generate jobs.

As we inch toward the pandemic’s end, surviving businesses deserve support from our Legislature – not more hurdles. Small businesses help make Spokane and all communities great.

Kris Johnson is the Association of Washington Business president, and Alisha Benson is the CEO of Greater Spokane, Inc.