Depending on how you measure success, the recently concluded Washington legislative session was either really great, not as terrible as normal or a frustrating combination of progress and setbacks for the employer community.
Let’s start with the positive: Lawmakers took meaningful steps to address the state’s affordable housing crisis. They passed nine bills to increase housing supply, including legislation to speed up permitting of new development, condominium reform to encourage construction of condos and townhomes, and legislation to increase “missing middle” housing such as duplexes, triplexes, fourplexes, townhomes and cottage housing.
None of these measures will solve our state’s housing problems, but it’s by far the most action lawmakers have taken on the issue in recent memory and these bills, combined with the record $1 billion allocated for new housing investments, will make a positive difference.
Lawmakers also passed legislation to enable professionals with licenses from other states to work in Washington, a long-needed move that will help address our workforce shortage. And they overwhelmingly approved a bill that will boost production of sustainable aviation fuel. These low-carbon fuels are critical for the aviation sector to cut emissions, and this legislation will help Washington attract new business investment to the state.
Staying positive, employers were relieved to see lawmakers pass a new two-year state budget without raising general taxes. This doesn’t mean legislators didn’t think about it. They spent more time than they should have talking about proposals to raise the real estate excise tax and to lift the voter-approved cap on property tax increases. In the end, those ideas were not approved, but we should expect them to return next year.
And after years of astonishing growth in the state budget, lawmakers slowed the growth in state spending to a still healthy 9%. This might not seem like a great accomplishment, but compared with the 24% growth we’ve seen recently, it’s a move in the right direction.
On a less-than-positive note, lawmakers failed to pass any kind of broad-based tax relief. This was disappointing, but not surprising. If they had really wanted to give taxpayers relief, they would have done it the previous year when they had an unprecedented $15 billion budget surplus.
They also drew down the state’s reserves to a level that might not be sufficient if the state enters a recession. Given the uncertainty in the economy and the potential for a recession sometime in the next year, they would have been wise to put aside more money for a rainy day.
Failure to address any of the unresolved issues with the state’s long-term care program will go down as an important missed opportunity. In February, a coalition of more than 200 Washington employers sent a letter to the governor and lawmakers urging them to either fix the outstanding issues with the program, or once again push pause. They did neither, so expect this issue to receive more attention this summer when employees begin to see a new payroll tax withheld from their checks.
One of the most challenging issue areas for employers was employment law, which saw passage of several new hurdles. They include ergonomics legislation that reversed a citizen’s initiative, rules that allow the state to set staffing quotas for warehouses, and an expansion of the list of circumstances where an employee can voluntarily leave work and be eligible for unemployment insurance benefits.
Every legislative session is a mix of good and disappointing outcomes, and this one is no exception. Let’s hope the progress on long-standing issues like housing, workforce and taxes ends up overshadowing the multiple missed opportunities lawmakers had to act as champions for the economy.
Kris Johnson is president of the Association of Washington Business, the state’s chamber of commerce and manufacturers association.
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