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

ACTION ALERT!

Contact your legislators to defeat state tax increases

WRA members are strongly urged to contact their state legislators and ask them to defeat House Bill 2038, which would repeal several tax and investment incentives and extend other taxes scheduled to expire. The Legislature is adjourned until May 13, when a special session of up to 30 days will begin.

The sales tax exemption for non-residents, upon which some retailers depend for a significant portion of their annual sales, is among the targets of the bill sponsored by Rep. Reuven Carlyle, D-Seattle. Another part of the bill objectionable to WRA is a repeal on a sales tax exemption on bottled water.

These ideas would raise prices, threaten sales and slow the economic recovery from the most severe state economic slowdown since The Depression.

If you know your legislator, please leave a message at the Legislative hotline, 800-562-6000. Or, contact the legislature  and type in your address to learn who represents you and how to contact them by telephone or e-mail.

Thank you for your prompt attention to this matter. 

Employment trends for retail

By Jan Teague, President/CEO

The good news is retail employment statewide is now over 332,000.  Retail jobs represent 11 percent of the overall state employment of 2.9 million people. 

But why was there an almost 16 percent jump in retail jobs over one year ago?  What happened?  The market continues to have slow growth, so why the giant employment jump when the past two years added around 4,000 each year? 

The answer is that retailers are hiring more part-time workers.  I expect this trend to continue until some time after Obamacare is implemented and businesses know what their obligations will be.  I think that is what is prompting the switch to more part-time workers.   

It's also a very fluid job market for retailers with high levels of turnover.  As the job market heats up, some of these part-time workers will find something better to do.  But others who are part-time will be there to take up the slack and be glad for increased hours.  The workforce for retailers is in a state of flux and retailers are positioning themselves for that day when the economy heats up and suddenly, it's hard to find anyone to even interview.

We are not that far off from that situation in King County where the employment rate is at 4.4 percent right now.  That is considered a very low number from a retailer's perspective.  What does a low unemployment rate do?  It creates competition among employers who can't find employees.  The last time this happened, there were stories from workers who had employers coming into the store and telling the worker that if they changed jobs, they could get $1.50 or better than what they were making.  They came right into the store to find workers. 

Wage pressure becomes a new cost for retailers, particularly small retailers.  Small retailers have always complained that they are the training ground for the larger retailer. The small retailer will hire young or inexperienced workers and as soon as they are trained, the worker goes to a larger store to make more money and get benefits.  

This small retailer challenge to find workers is going to be even more difficult in the future with those larger companies offering health insurance.  Obamacare says that small businesses don't have to offer health care, but the employee does have to buy it.  Why would an employee want to work for a small business when the larger ones will pay for health care? 

Another piece to this picture is that as wages and benefits go up, so do the prices for consumers.  Businesses have only one choice and that will be to raise prices.  Keep in mind that as prices go up, so does the consumer price index.  Under our state law, this is the primary indicator used to raise the minimum wage each year.  When the base wage goes up, so do all of the other tiers of wages in a company.  It could get out of hand moving forward.

Will the legislature deal with dramatic increases in the minimum wage?  It's doubtful as long as we have the King County and urban legislators from the Puget Sound area hearing from constituents who say they can't pay for their basic costs without more money.   

The employment dynamic has changed since this recession began.  This recovery includes dramatic cost increases and a great deal of uncertainty over who is paying for health care. Retailers realize they have a huge challenge to figure out how to move forward.  It's no wonder they hired so many part-time workers this year. 

Positive revenue forecast alleviates need to alter non-resident sales tax exemption

By Mark Johnson, VP Government Affairs

Tuesday the state revenue forecast was released by the Economic and Revenue Forecast Council.  The good news is that our state is $231 million better off than expected for the quarter due largely to slightly stronger than expected housing activity. 

While this may not seem like much when compared to the overall operating budget of over $30 billion, it may be enough to close the gap between the House Democrats' budget, the Senate Majority Coalition budget and what the Governor wants to see happen.  If this is true, legislators could be voting on a final agreed upon budget plan in the very near future.  Legislators are expected back in Olympia today to resume business.

So what does this mean to retailers?  Still hanging in the balance is a proposal to change the non-resident sales tax exemption into a remittance program.  WRA has advocated strongly that the exemption remain intact.  We are concerned that changing the exemption will hurt the almost 4,000 businesses that depend in part on non-residents shopping in their stores.  Border counties and cities will be particularly hard hit. 

Some businesses report that almost 60 percent of their customers come from outside the state. These businesses reported sales of $431 million in 2011.  Losing those sales would undoubtedly lead to job losses and closures.  This exemption was reviewed by the independent Joint Legislative Audit and Review Committee, Tax Review Commission and found to be accomplishing its intended goal of removing a disincentive for non-residents to shop in Washington stores.

It is our hope that with the extra $231 million the legislature will drop any plans to change the important non-resident sales tax exemption, approve a budget, and go home.

State budget breakthrough predicted soon

Based on improved revenue forecasts, the Legislature's two main budget authors predicted Tuesday they would be able to reach agreement soon on a new state spending plan for the next two years. The Legislature has entered two overtime sessions this year attempting to approve a new state budget.

Tuesday's state report projects $110 million in unexpected revenue for the remainder of the current biennial budget, ending the end of this month, and $121 million in revenues beyond earlier expectations in the 2013-15 state budget cycle. State economist Steve Lerch attributed the new revenue forecasts to improved home sales and construction activity and slightly improving consumer confidence to shop for items from which the state collects taxes after sales.

To avoid a government shutdown, the Legislature must approve a new budget by the end of this month. Though they declined to predict when agreement would be reached, Rep. Ross Hunter (D-Medina) and Sen. Andy Hill (R-Redmond), the Legislature's lead budget authors, said they were confident an agreement would be reached soon for Legislature approval.

Though the increased revenue is a small portion of the state's overall $30 billion plus budget, legislators believe it will simplify the steps needed to pass a budget.

"It's a relatively small (revenue) move, but we're lucky it's up," Hunter said. He predicted the Legislature would pass a budget "relatively soon."

Because budget negotiations have been underway for weeks, Hill said the revenue forecast clarifies any doubts about the state's immediate revenue picture.

"It (revenue forecast) should break one of the final logjams" in passing a budget, Hill said.

Hunter and Hill based their optimism on this state revenue update.

Jobless rate keeps improving

The state's unemployment rate fell to 6.8 percent in May, the first time it has been under 7 percent since November of 2008, Employment Security reported today.

The department reported that retail trade companies added 300 jobs last month

Industries with the most estimated job gains in May were government, up 3,200; education and health services, up 2,500; leisure and hospitality, up 1,500; and transportation, warehousing and utilities, up 600. Among the industries losing the most jobs were manufacturing, down 600 and professional and business services, down 500.

"Washington's labor market is continuing to recover and expand at a modest rate," said Paul Turek, a labor economist for Employment Security.

So far, Washington has regained about 79 percent (162,100) of the 205,000 jobs it lost during the recession.

In May, an estimated 236,900 people (seasonally adjusted) in Washington were unemployed and looking for work. That includes 119,686 who claimed unemployment benefits last month. Click here for more detailed state jobless information.

Source: Employment Security Department

WRA commentary on Inslee's new taxes published online

WRA President/CEO Jan Teague has authored an opinion piece calling into question Gov. Jay Inslee's proposal to repeal a non-resident sales tax exemption currently offered in Washington State.

Teague wrote that a repeal is bad policy that would damage economic development and threaten retail jobs prior to the retail industry recovering from the recession. State Employment Security data show there are approximately 6,200 fewer retail jobs in the state compared with January, 2008.

In some cases, repealing the exemptions would add hundreds of dollars of cost to the price of more expensive items and discourage sales in Washington State, particularly for small Southwest Washington businesses along the border with Oregon, Teague wrote.

Visit Washington State Wire to read Jan's article. The Washington Research Council also posted Jan's article on its website. 

Teague featured in e-fairness article

WRA President/CEO Jan Teague is featured in a recent South Sound Business Examiner article reviewing the impact if Congress passes the Marketplace Fairness Act.

The act would require online retailers to collect sales taxes and end their unfair price advantage with brick-and-mortar retailers. Like many retail organizations, WRA supports the Marketplace Fairness Act.

"Consumers are price-sensitive," Teague told the newspaper. "So if they're going online only to avoid sales tax, a law like this just might change behavior."

Teague goes on to comment that the act would preserve sales in Washington State and be the most help to small businesses that suffer from shoppers who see their merchandise on display, but buy it online to save taxes.

The Senate has passed the act, and now it is before the House of Representatives for further consideration.

Visit Business Examiner (subscription required) to read the article.

It quotes several regional small businesses that would be helped by the act including Marty Pluth, CEO of Old Town Bicycle, who added that online shoppers now can save up to $300 on the cost of buying some of the high end bicycles he sells.

WRA co-sponsors free social media webinar on June 27

WRA is offering members a free webinar this summer in cooperation with the Council of State Retail Associations.

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

*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.

Policy Center announces June 27 business, health care conference

The Washington Policy Center will host its 11th health care conference and biennial small business conference on June 27 at the SeaTac Hilton hotel.

Speakers will address the state of health care reform and the state's small business climate at the policy center's first-ever dual conference event. The keynote lunchtime address will be by MSNBC and Fox News analyst Avik Roy, who will address free-market solutions to the health care crisis. Roy also writes about health care for Forbes magazine.

WRA is a co-presenter of the event. To register, click here. For more information, contact Stephanie True at 206-937-9691 or strue@washingtonpolicy.org.

WRA urges approval of worker comp reform bill

As the Legislature nears possible adjournment after nearly six months of meeting, WRA continues to urge the House of Representatives to first approve the workers' comp reform bill, SB 5127.

Last week, the Senate passed the bill that would save employers an estimate one billion dollars on insurance costs in the next decade by lowering the eligibility age to settle open claims from 55 to 40.

Significant workers' comp insurance rate hikes are likely to address an estimated $1.8 billion shortfall in the state's reserve fund for claims. Approving SB 5127 would improve chances for voluntarily settling more claims and reducing the need to put financial pressure on companies by further increasing workers' comp insurance rates.

Sen. Janea Holmquist-Newbry reports those rates have increased 70 percent in the past decade and threaten to remain a mounting financial burden, especially for smaller businesses struggling to survive or recover from the recession.

This is National Small Business Week

This is the week the U.S. Small Business Administration celebrates Small Business Week.

On Monday, Redmond's Microsoft campus was the first of five national sites this week for panel discussions on sharing resources on how to start and grow a small business.

The contributions of small businesses to the U.S. economy are understood nationally, in Washington State and here at WRA.

Consider some important small business facts:

*More than half of Americans either own or work for small business and create about two of every three new jobs in the U.S. every year.

*Eighty-eight percent of all U.S. firms employ less than 20 people, according to the U.S. Census Bureau.

*Federal Reserve Chairman Ben Bernanke credits small businesses with being the engines of economic recovery.

U.S. Presidents dating back to 1963 have issued proclamations saluting small businesses every year.

The National Retail Federation has joined the celebration this year with video tributes and web reports highlighting the significance of small businesses to the nation's economy.

Click here to watch video reports from various small business owners around the country. Visit NRF's Big Blog to read more about small business recognition and visit SBA's Small Business Week website to watch a message from President Obama and more about the week of recognition.

Finally, visit the Seattle Chamber's website to review information on three upcoming small business social events.

Taxable wage base rises in the state

Washington's average annual wage grew by 3.4 percent in 2012, to $51,595, surpassing $50,000 for the first time, according to the state Employment Security Department.

The state uses the data to revise minimum and maximum unemployment benefits, to calculate workers' compensation benefits and to determine the taxable wage for unemployment taxes.

Beginning in 2014, employers will pay unemployment taxes on the first $41,300 paid to each employee, up from $39,800 in 2013.  Next year's minimum weekly unemployment benefit will rise $5 to $148 while the maximum payment will rise $20 to $624.

Click here for more information.

Source: Employment Security

RILA releases video supporting e-fairness legislation

The Retail Industry Leaders Association has released a video outlining the reasons for supporting Congressional approval of the Main Street Fairness Act.

The bill, awaiting action in the House, would require online retailers to charge sales taxes just a brick-and-mortar retailers do. Such a change would level the competitive playing field within the industry and make for fairer competition. The Senate has approved the bill.

The short video comes courtesy of RILA's coalition of small business owners, the Alliance for Main Street Fairness. WRA supports the bill to protect small businesses threatened by the unfair price advantage many online retailers maintain by refusing the collect sales taxes.

Watch video overview of WRA's discount shipping partner

WRA's third-party shipping provider, PartnerShip, has released a short video overview of the discount services it offers customers.

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

Four other possible advantages of joining PartnerShip include:

*Routing management. Based on an analysis of shipments, PartnerShip will recommend the best shippers for particular routes. The recommendation is based on a carrier's cost effectiveness and customer service.

*Bill auditing. Vendors such as PartnerShip say they often find invoices with rate errors of up to 10 percent in favor of the freight carrier. Corrections are made before the third-party vendor sends the bill to the customer.

*Improved inbound shipping. By relying on vendors to control your inbound shipping, it can be difficult to learn how and when your orders will be shipped and delivered. You can gain that knowledge by arranging shipping through a third party partner such as PartnerShip.

*Consolidated invoices. For frequent shippers, this can mean paying only one bill weekly or monthly as opposed to paying for each shipment.

Click here to watch the video overview of the company and obtain contact information. Also, visit PartnerShip's website and its improved, separate shipping website.

NRF releases 9^th retail crime survey

Tacoma crime conference set for October

The National Retail Federation's 9^th organized retail crime survey is available for review.

The report compiles feedback from 77 retail loss prevention executives surveyed in May.

Some of the findings:

*Nearly two in five apprehensions lead to some level of violence.

*ORC incidents increasingly are linked to other crimes including the sale of drugs and illegal weapons and money laundering.

*An estimated 11 percent of caught shoplifters carried foil-lined bags to defeat electronic article surveillance tags.

*The most popular items to steal include energy drinks and liquor from grocery stores; pain relievers and allergy medicine from pharmacies; razors, teeth whitening strips and pregnancy tests from health and beauty departments; and laptops/tablets and cellular phones from electronics departments.

Visit NRF's blog that includes a graphic summarizing some of the survey's findings. Also visit survey to read more and obtain the report.

The Washington State Organized Retail Crime Alliance (WSORCA), of which WRA is a member, is planning another ORC training conference set for Oct. 3 at the Convention Center in downtown Tacoma. The day's agenda is now being organized and a registration link will soon be posted on the WSORCA website for registration purposes.

Look to this newsletter for follow up information about the conference as details develop.

Seattle grants deadline extension for energy compliance

Due to a software upgrade by the EPA, Seattle has granted commercial property owners a three-month extension for reporting energy usage.

Fines for missing data that normally would have been assessed starting in July now will start in October, the city reported. The EPA's software upgrade will necessitate shutting down its online reporting network on June 25 for two weeks to move data to the upgraded system. The upgraded energy reporting website is scheduled for launch on July 10.

See Portfolio Manager for more information about this upgrade and transition.

Source: City of Seattle

Tacoma chamber needs feedback on business threat

A grassroots organizing effort has been identified that is trying to pass a Tacoma law that would require businesses to offer paid sick and safe leave time to employees.

A similar law in Seattle, the only one of its kind in the state, has proven to be an expensive record keeping nightmare.

WRA's Tacoma members are urged to contact Tom Pierson, President & CEO of the Tacoma-Pierce County Chamber of Commerce for more information, at 253-627-2175. Also, visit the chamber's website established to solicit testimony opposing the idea.

Tacoma city council members have been receiving many calls of concern from the Tacoma business community and have publicly expressed concern about the idea.

WRA opposed the Seattle law on several fronts. It is expensive to administer and leaves room for abuse that can be damaging to businesses that need to remain adequately staffed to serve customers.

Look for updates on this issue in future WRA newsletters.

Breakfast for Heroes set for June 27

A military Breakfast for Heroes has been scheduled on June 27 at the Hilton Bellevue Hotel, 300 112th Avenue S.E.

The event is sponsored by Heartbeat, an organization that provides therapeutic services, emergency assistance and morale building programs for active and discharged service men and women in Washington State.

Featured speaker for the 7:30 a.m. will be Katherine Theresa Platoni, an Army Reserve clinical psychologist with experience teaching patients methods of reducing suffering from chronic pain and terminal illnesses. Col. Platoni's assignments have included four wartime deployments.

To register, click here . 

Safety tip: (one in a series)

Annual earthquake drill set in October

It might be a bit early to set your calendars, but the state Emergency Management Division has announced that this year's Great Washington ShakeOut earthquake drill will be held the morning of October 17.

Considering disaster-related facts, you can't plan early enough for some of the disasters that Washington State businesses can face.

A few compelling facts posted online by EMD:

*Ninety-one percent of Americans live in places threatened by moderate to high risk of earthquakes, volcanoes, tornadoes, wildfires, hurricanes, flooding, high-wind damage or terrorism.

*An estimated 40 percent of small businesses forced to close due to some disaster never re-open.

The earthquake drill is designed to heighten earthquake awareness, but more importantly, to encourage businesses to make plans to avoid injuries or death and recover after an earthquake. Along those lines, the state has made useful computer links available that organize how to plan for and recover from an earthquake.

Click here for more information on the Shake Out drill and to register as a participating company. EMD's Business Portal offers several useful links to help small business organize thoughts and considerations to better prepare for disasters.

WRA employs Maria Justin as safety advisor to assist members with organizing safety plans and to suggest safety meeting topics. Contact her at 360-943-9198, Ext. 21 or maria@retailassociationservices.com.