Jan Teague

President/CEO

360.943.9198, ext. 19

jteague@retailassociation.org

Mark Johnson

Vice President of Government Affairs

360.943.9198, ext. 15

mark.johnson@retailassociation.org

Tammie Hetrick

Vice President of Retail Services (RASI)

360.943.9198, ext. 13

tammie@retailassociationservices.com  

Jim Szymanski

The state's tax system can't compete

By Jan Teague, President/CEO

Today the news on the budget deficit is not as bad as everyone had feared largely because housing construction is starting to rebound.  This is good news for legislators who now have a better idea of what money they have to spend for the two-year budget. 

The question that the legislature still faces is how to balance its budget given its desire to increase education funding.  Yes, the forecast didn't increase the deficit by much, but the debate remains the same.  Where will we get more money?  Who is going to pay?  A number of existing tax preferences have been discussed but many legislators see taking away a preference as a new tax increase.  I agree.  If a business will have to pay a higher tax, it's a tax increase, plain and simple. 

It may be a surprise for you to know that Washington businesses pay over half of all taxes collected by the state.  Roughly $16.3 billion dollars or 56.8 percent of all taxes came from business in 2011.  The sales tax and B & O tax work against business growth or new business opportunities here.  We are one of the highest taxed states in the country.

One critical public policy that the legislature uses to help certain businesses compete given the level of tax burdens is to allow them to pay at a lesser rate, delay paying, or not pay at all.  These are called tax preferences or tax incentives.  Over time, the number of tax preferences has grown and now legislators are working to evaluate if these preferences still make sense.  I suspect this issue will be a part of the final negotiations in the budget. 

The Washington Research Council put out a good policy brief on tax preferences on February 4th.  It helps to clarify and remind us all why we decided to have preferences in the tax code. 

First, we are an expensive state in which to operate a business, so if you want to attract certain businesses here, you have to do something about the costs of doing business.  The state policy should be to level the playing field across states so businesses can compete.  It's particularly a problem with our unique B & O tax on gross receipts.  Because all businesses pay, there is a pyramiding effect as a product moves through the production chain.  Goods are more expensive in Washington as a result.  Why buy something here when you can go online and get it a lot cheaper and probably not even pay sales tax? 

We have some fundamental problems with our tax code and as technology continues to encourage online shopping, our disadvantages will continue to become even more apparent.

Liquor theft captures legislators' attention

By Mark Johnson, VP Government Affairs

With the privatization of liquor sales last year, theft has become an area of concern. State Representative Chris Hurst (D-Enumclaw), Chair of the Government Accountability and Oversight Committee and State Representative Cary Condotta (R-Wenatchee), Ranking Republican for the committee held a stakeholder meeting recently about this concern attended by 28 individuals. 

Groups represented included retail, restaurants, labor, the Liquor Control Board (LCB), the Department of Revenue (DOR), law enforcement, cities, and anti-drinking interests.

The purpose of the meeting was to discuss if there was a problem and if so, what could be done about it. Opinions varied widely. Some felt there was no problem; others commented that a crisis was brewing. Ways to solve the perceived problem also varied widely.

One thing that was made clear at the start was that if concerns could be addressed by better communication within existing channels, that would be preferable to running legislation that could create more issues.  It was mentioned that many stores have voluntarily instituted anti-theft practices.  It was also mentioned that when the state raised the felony theft threshold from $250 to $750, it resulted in more thefts.  

One participant mentioned that thieves know the felony limit, which can vary between jurisdictions, and they purposely stay under the limit in order to avoid serious consequences.  Funding of our legal system was mentioned.  The need for better data on the extent of the problem will be investigated by DOR and the LCB.  Labor representatives have concerns about the safety of employees and providing good, timely service to their customers.

The group agreed to meet again to share more information. Stay tuned for future reports. 

State lowers revenue forecast slightly for 2013-2015

The state's latest revenue forecast released today showed $19 million less coming in the next two years than economists expected last November.

The revenue dip was offset, however, by a projection that the state will collect $59 million more than previously expected in the current biennium that ends in June.

An improving housing market has much to do with the slightly brighter budget outlook, state economist Steve Lerch told members of the Economic Revenue Forecast Council (ERFC). The legislature will use today's report as the foundation for talks aimed at adopting a new state budget by the scheduled April 28 adjournment of the current session.

Lerch and legislators said they considered the latest revenue adjustments to be insignificant given the projection for a $32.5 billion general fund for the next two-year budget cycle.

"The net impact is a forecast that has changed relatively little," Lerch said.

Regardless, the legislature faces a revenue shortfall of about $1.3 billion, not counting as yet undetermined additional expenses to increase education spending as a result of a state Supreme Court decision, Lerch said. Legislators who attended today's ERFC meeting sidestepped reporters' questions about how much the shortfall would grow given the Supreme Court education decision.

Rep. Ross Hunter, (D-Medina), chair of the House Appropriations Committee, said the legislature's task remains challenging to adopt a new budget despite today's forecast for flat revenues. In recent years, as the recession worsened since 2007, legislators became used to steadily worsening economic forecast news.

"We (still) have a hard problem to resolve," Hunter said. "This (the forecast) doesn't make it worse."

To read the entire report, click here.

Sen. Andy Hill, (R-Redmond) said he expected the Senate to introduce a budget proposal within 10 days. The House is expected to follow by introducing its version of a budget proposal within a week after the Senate's proposal.

In summary, Lerch said he remains worried about the effect of federal budget cuts and payroll tax increases on the state economy. However, despite what he called "fragile" consumer confidence, Lerch said consumers have paid down personal debts and are shopping more for cars and houses because interest rates remain low.

Non-budget bills still in focus

Today the Legislature will complete Day 66 of its scheduled 105-day session.

A state revenue projection highlights today's news, but WRA continues tracking progress on scores of non-budget related bills still alive that could affect retailers. It is possible that legislators could give some bills new life by deeming them necessary to adopt a new state budget. Budget adoption will likely be the legislature's last action before adjournment.

Here's a summary of outcomes or expectations of a few of the main bills WRA is tracking until adjournment:

HB 1891 - WRA is asking the Senate to stop this bill that would make repeated safety violations felonies. It threatens excessive penalties for problems that can be corrected without harsh punishment.

HB 1719 - WRA is working to kill this bill that would reclassify independent truck drivers as store employees, making them easier to unionize and added to overhead expenses.

HB 1313 - A bill to expand Seattle's expensive mandatory sick and safe leave law statewide has bogged down with legislators unwilling to expand it beyond Seattle. This was WRA's goal.

SB 5275 - A bill that would have allowed a reduced minimum wage for new hires has lost steam and will delay further action until next session. WRA had hoped for final action this session.

SB 5178 - The bill to curb "flash mob" robberies won unanimous approval in the Senate. WRA continues to promote it in the House.

WRA co-sponsors three free webinars this year

WRA is offering members three free webinars this year in cooperation with the Council of State Retail Associations.

To register ahead of time, click on the following links:

*Intro to Social and Mobile Media Marketing, on April 24 - 6:30 a.m. MT / 5:30 a.m. PT (Webinar 1) or 9:30 a.m. MT / 8:30 a.m. PT (Webinar 2)

*How small retailers can recognize and prevent shoplifting, on May 21 - 6:30 a.m. MT / 5:30 a.m. PT (Webinar 1) or 9:30 a.m. MT / 8:30 a.m. PT (Webinar 2)

*Intermediate Mobile and Social Media Marketing, on June 27 -  6:30 a.m. MT / 5:30 a.m. PT (Webinar 1) or  9:30 a.m. MT / 8:30 a.m. PT (Webinar 2).

Please contact Jan Teague, WRA's President/CEO, if you have questions at 360-943-9198, Ext. 19 or a jteague@retailassociation.org.

Service upcoming for former Gov. Gardner

Former two-term Governor Booth Gardner died late last week from complications of Parkinson's disease. He was 76.

A public memorial services will be held at the University of Puget Sound at 11 a.m. on Saturday, March 30.

For more on Gardner, visit The New York Times obituary. The site includes a place to sign a guestbook.

Commercial energy reports due in Seattle on April 1

Owners and managers of commercial and multi-family buildings larger than 50,000 square feet in Seattle are required to make annual energy useage reports to the city.

This year's reports are due on April 1.

Click here to learn what to do to comply with the law. The city is conducting three free workshops to help owners and managers comply with the law.

To learn how to benchmark and comply before the spring rush, register for a workshop:

• March 28th, noon to 2 p.m. (update & tune-up)

Source: City of Seattle

NRF website sorts through health care reform requirements

A National Retail Federation website is a good resource for companies large and small working to plan and comply with expected national health care reforms.

The site explains possible penalties, definitions of employee categories and current concerns in the business community. Visit the site at www.retailmeansjobs.com/healthcare.

Oregon promotes no sales taxes in commercial, video

Legislators who will vote on WRA-backed bills this session to waive or contain sales taxes should watch a commercial that has been airing in Washington by Travel Portland.

The 15-second commercial that recently has been on major Washington tv stations encourages visitors to shop in Oregon because it doesn't have a sales tax. Tourism promoters in Oregon know the same reality as WRA: lack of a sales tax is an incentive to stretch budgets and to shop.

WRA supports HB 1329 and SB 5529 that would allow a sales tax holiday weekend starting this year for back-to-school items. A study shows it would raise government revenues by encouraging shoppers to buy other items on which there is a sales tax.

WRA opposes HB 1273, which would repeal the sales tax exemption for out-of-state residents. This tax break has proven to be an effective incentive for Oregon residents to shop across the Columbia River if they work in Vancouver, and similarly for Spokane retailers.

Sources: You Tube, Washington Legislature

WRA shipping service redesigns, improves websites

Our national partner, PartnerShip, unveiled a new company website and an improved, separate shipping website.

The new company website includes new content, live chat, an employee directory and the ability to buy discounted shipping supplies. The new shipping site has streamlined the enrollment process.

As a WRA member, you could begin saving up to 27 percent on select FedEx shipping services by joining a new shipping service free of charge.

And considering new annual shipping rate increases from major carriers, it's a good time to check out WRA's agreement with PartnerShip, a national freight management company committed to reducing shipping costs particularly for small businesses.

Savings from the new shipping program can, of course, help you to offset the cost of your WRA membership dues.

The program is available to all WRA members with no minimum shipping requirements or obligations. Enrolled customers can save up to 27 percent on select FedEx services and at least 70 percent on less-than-truckload freight shipments arranged through PartnerShip.

"The new WRA Shipping Program makes a great addition to our menu of services designed to save our members money," said WRA President/CEO Jan Teague. "This program is clearly advantageous to all WRA members."

Easter shopping flat this year, study finds

Consumer shopping related to Easter will be flat this year compared to last, a new National Retail Federation survey has found.

A poll of 5,050 consumers found a personal plan to spend $145.13 this year on candy, décor, apparel and food related to Easter, compared to $145.28 last year.

Many consumers are coping with tight budgets but plan to take advantage of specials designed to spur sales, said Pam Goodfellow, the BIGinsight Consumer Insights Director who oversaw the poll.

The highest percentage of those surveyed planned to buy candy and food (90.5 percent and 86.9 percent respectively), while 48.4 percent planned to buy apparel. Visit NRF for more details about the poll results.

Source: NRF 

Several sales and use taxes increase on April 1

Revenue has announced increases in sales and use tax rates, effective April 1, in several communities around the state.

The sales and use tax rate within all of Cowlitz County will increase 0.1 percent for chemical dependency or mental health treatment services. New overall state and local rates will range from 7.7 percent in unincorporated portions of the county to 8 percent in the cities of Kelso and Longview.

A 0.2 percent increase for transportation services will go into effect in the Cities of Castle Rock and Lynden, increasing the overall state and local rates to 7.9 percent and 8.7 percent, respectively.

Increases in sales and use taxes or 0.1 percent also will go into effect in the following places: La Conner (new rate, 8.3 percent); Okanogan (to 7.8 percent); Sedro Woolley (to 8.3 percent); Mill Creek (to 9.6 percent) and Olympia, to 8.8 percent.

Click online to read about the history of tax rate changes elsewhere in the state.

Source: Department of Revenue

Temporary health exchange website launched

The Washington Health Benefit Exchange this week launched a website to begin answering questions about how health care reform will work in the state. The new site will evolve into the online portal where customers will be able to compare policies available to them.

Washington is one of a dozen states that elected to establish its own health care exchange accessible through the website, www.wahbexchange.org. The site will begin enrolling customers on Oct. 1 for health insurance policies that will take effect on January 1, 2014.

The new temporary site will "re-launch" in the same location later this year.

Any questions or comments about the site or the enrollment process can be directed to info@wahbexchange.org or by calling 360-407-4100.

WRA urges retailers to reject court settlement on swipe fees

WRA President/CEO Jan Teague is asking members to reject a proposed court settlement with Visa and MasterCard regarding fees they charge retailers who do business with those creditors.

Retailers should have received a 27-page notice from Visa and MasterCard regarding a lower court decision on transaction fees. The National Retail Federation, Retail Industry Leaders Association and WRA consider it a bad settlement and are urging retailers to reject the terms before a May 28, 2013 court deadline for objecting to the deal.

In exchange for minor financial relief for fees paid, retailers would waive all rights to further litigation against Visa and MasterCard.

The settlement notice includes a form Teague urged members to fill out stating that they object to the settlement. By opting out the settlement, retailers lend weight to attempts to negotiate terms more favorable to retailers.

To opt out of the proposal, retailers must submit an attached letter to the settlement administrator by May 28. The attachment includes both a letter to object to the settlement and another one-page form to opt out of receiving any payment.

At a minimum, WRA is asking that retailers submit a letter of objection that will help when the appeal is heard on the terms of the settlement this fall. The letter of objection can be submitted and will not change a retailer's settlement payment should a retailer want to settle now.

It must be mailed to Payment Card Interchange Fee Settlement, P.O. Box 2350, Portland, Oregon 92708-2350 and postmarked by May 28. Retailers are urged to keep a copy of the opt out letter for their records.

April 4 webinar scheduled regarding health care law

WRA members are encouraged to register for an upcoming free webinar that will offer an overview of requirements related to national health care reform, the Affordable Care Act that takes effect next year.

Neil Trautwein, a national expert in health care reform for the National Retail Association, will moderate the discussion.

Regulations related to the act are being made public rapidly and with little advance warning. It's important for retailers to understand their obligations under this law to avoid possible penalties.

Click here to register for the webinar, to be held from 10 a.m. to 11:30 a.m. (West Coast time) on Thursday, April 4. The presentation is free to all NRF members and members of WRA. 

Homeland Security issues new I-9 hiring form

By May 7 of this year, employers must shift to using the U.S.Citizenship and Immigration Service's new employment eligibility verification form.

The new, longer form is available now for employers who want to get used to the new forms earlier than the deadline for switching over to the new format.

The new form is two pages instead of one and includes additional data fields, including an employee's foreign passport information (if applicable) and telephone and e-mail addresses. The immigration service also believes the instructions are clearer for employers and applicants to understand.

Visit form to print a copy of it. Visit notice to review the Federal Register announcement about the new form. 

Free disaster survival seminar in Bremerton, April 11

Kitsap County businesses are invited to a free disaster survival seminar on April 11 at the Kitsap Conference Center at Bremerton Harborside.

The seminar aims to help businesses prepare for and respond to disasters ranging from floods to earthquakes. It is presented under the auspices of the Kitsap County Department of Emergency Management. Hours are from 9 a.m. to 3 p.m.

Many unprepared businesses don't survive disasters or they lose market share if they recover. The seminar will outline steps to maintain continuity through an interruption in service.

Pre registration is requested. To register and learn more, click on survive. 

Safety tip: (one in a series)

Tips for retail safety meeting topics

Though it may seem that most retail jobs are relatively safe, there are several topics to consider and discuss when conducting a monthly safety meeting.

One of California's largest providers of workers' compensation insurance, the State Compensation Insurance Fund, includes several talking points for retail safety meetings on its website, www.statefundca.com.

Slips, trips and falls are some of the most common causes of injuries in typical retail settings. The state fund recommends that retail employees wear shoes with non-slip soles to reduce the odds of injury.

In addition:

*Report spills, uneven flooring or piled up debris immediately for repair and clean up.

*Store items so that they are easy to reach to avoid injuries caused by reaching or bending.

*Take 30-second periodic work breaks to avoid repetitive strain injuries.

*When working alone at night, properly secure exits and never leave the store alone to empty trash. It could be an invitation to an armed robbery.

*Know how to operate security equipment such as alarms, cameras and time-lock safes.

*Know emergency evacuation procedures and practice them as new employees join the payroll.

*Wear protective equipment when appropriate to avoid injuries from exposure to the skin or eyes.

*Interact with solo customers and ask if you can help. Ignoring dishonest customers can be an invitation to a theft.

Visit retail worker safety for more on these topics.

WRA employs Maria Justin as a safety advisor to members. She is available for workplace safety visits, to help draw up a safety plan or to suggest meeting topics. Contact her at 360-943-9198, Ext. 21 or at maria@retailassociationservices.com.