The hopes of our state’s small-business owners for a return to normalcy with the new year were dashed by not one, but two holiday pronouncements from Gov. Jay Inslee: an extension of statewide business restrictions to Monday, and the release of his budget and legislative proposals.
Moreover, this week’s announcement of a new, incomplete and unworkable “reopening plan” again demonstrates the governor’s indifference, if not hostility, toward small businesses.
And, we now know he has no intention of finally retiring his arbitrary and pernicious proclamations that have already shuttered tens of thousands of Main Street enterprises, many permanently.
Worse yet, his 2021 legislative agenda would impose huge new costs and obligations on those small businesses able to survive the pandemic, and the governor’s resultant edicts, that have already crippled their operations – unless the state Legislature steps in to stop him.
As if existing fines of nearly $10,000 per day for a business operating beyond the governor’s comatose recovery phases weren’t severe enough, Gov. Inslee seeks to double those daily penalties on struggling small-business owners who dare contest his orders, and give them just five days to secure legal counsel and appeal.
The governor also plans to hit employers with another nearly $10,000 fine for furloughing or terminating employees who refuse to report for work alleging some safety or health concern, real or imagined.
The Department of Labor & Industries readily admits the rise in these worker complaints is entirely COVID-related.
It makes no sense to impose a costly, new, permanent fine in response to a temporary and changing problem.
In a cynical ploy to buy small-business support for his misguided and unwelcome legislative agenda, Gov. Inslee proposes to skim tens of millions of dollars of workers’ compensation taxes paid by employers to create another state “small-business assistance” grant program for future emergencies.
This one would be run by the Department of Labor & Industries – the very agency in charge of enforcing the governor’s lockdown orders.
We have already witnessed the many shortcomings of the governor’s small business grant programs during the current outbreak. They have been too little, and too late.
The dollars allocated to these programs have not only been insufficient, but the number of businesses aided is dwarfed by the number permanently closed due to the governor’s edicts.
These closures, along with the furloughs and layoffs caused by the governor’s restrictions on small businesses, are driving a jaw-dropping, multiyear unemployment tax hike on Main Street firms still fighting to survive.
We’ve seen estimates that employers with few or no layoffs prior to the pandemic who were paying about $44 dollars per employee for unemployment insurance are likely to see that tax rate jump to nearly $230 per employee, if they had no layoffs. Those firms forced to furlough or terminate workers due to the pandemic could see their unemployment taxes skyrocket to more than $1,000 per employee.
So, a business with 10 employees that was paying about $440 for unemployment insurance last year, could be hit with a bill for more than $10,000 this year – and increasing for at least the next three years.
Rather than bolster the state’s hemorrhaging Unemployment Trust Fund as businesses have been asking him to do since early summer, the governor’s answer appears to be little more than stretching out the increases over a longer period and bridging the gap with federal loans.
Slightly easing the pain by extending it longer might be better than nothing, which has been the governor’s approach thus far. Yet we question the likelihood for success given the abysmal pattern of ineptitude and misinformation repeatedly displayed by the Employment Security Department and its commissioner throughout this pandemic.
All of the above leaves aside Gov. Inslee’s proposals to increase fuel and energy costs, as well as health insurance premiums.
Patrick Connor is Washington state director for the National Federation of Independent Business.
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