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@retailassociation.org

Jim Szymanski

WRA board meets with legislative leaders

By Jan Teague, President/CEO

WRA's Board of Directors met with House and Senate leaders on Tuesday to discuss key issues still under consideration by the legislature. 

With only a few weeks left in session, discussions are tightening with a focus on the state's budget and a few bills facing a Friday committee cut-off. 

Senator Karen Fraser, Chair of the Democrat Caucus, spoke of the budget challenges noting that another $5 billion dollars had to be raised by 2018 to fund basic education.  Senator Rodney Tom, Majority Coalition Leader, told the Board that this year's budget has 72 percent of its funds going to education.  He expects next year to be very difficult with new taxes proposed as legislators try to meet the looming 2018 deadline set by the state Supreme Court to fully fund education. 

Representative Reuven Carlyle, Chair of the House Finance Committee said that for next year's budget there are three options to raise money:  property tax increases, sales tax increases, and a new tax structure.  One of his priorities is to close tax exemptions. 

Leaders all talked about the minimum wage.  Representative Larry Springer, who is the business liaison for the House Democrats, said that one of the biggest concerns is wage compression.  He also noted that it is bad public policy to have wage levels set city by city.  Representative Dan Kristiansen, House Republican Caucus Leader, said that raising the minimum wage for agriculture would have a huge impact since commodity prices are not set locally and that farmers can't raise prices to adjust for a higher minimum wage.  Kristiansen also explained more needs to be understood around the entire chain of workers who touch a product from start to finish. 

If wages go up all along that chain, prices will have to go up.  Representative Carlyle said the biggest surprise he heard was its impact on non-profits.   Senator Mark Schoesler, Senate Republican Caucus Leader, mentioned that one non-profit, the ARC of King County that cares for people with disabilities estimated that it would cost one half million dollars a year to pay for a raise in the minimum wage. Schoesler believes this issue is one of the most important issues we face this year.

Ted Sturdevant, the Governor's legislative policy director, also joined us to hear about our issues.  He offered to work with us moving forward but it was hard to get a sense of support about our concerns because the Governor has supported an increase in the minimum wage and supported eliminating the non- resident sales tax exemption that would hurt retailers in border communities. 

Sturdevant closed his time with us saying the Governor is friendly to business and hopes to demonstrate that moving forward.

We spoke with each leader about a variety of issues.

*Board Chair Lowell Gordon, who owns a small business, The Creative Office, spoke about concerns to fund tourism through HB 2229 that would charge fees on retailers.  While retailers support tourism, more work needs to be done on the funding mechanism in the bill. 

*Small Business Chair, Madelin White of Merle Norman Cosmetics spoke of the impact of raising the minimum wage and how she had to lay a person off this year because of it. 

*Mark Johnson briefed leaders on the problem with eliminating the non-resident sales tax that is in the House's version of the budget.

*Board member Mindy Baker, Walgreens, explained SB 6137, which has broad legislative and business support and would help with administration transparency for pharmacy benefit managers. 

*Greg Wood, Target, briefed leaders on HB 2353 that would prevent individuals that have received a written trespass notice from returning to our stores and HB 2552 that would require paid signature gatherers to be registered with the state. 

*Francisco Uribe, Home Depot, spoke against HB 2334 that would impact well-functioning independent contractors. 

Taxes, taxes and more taxes:

By Mark Johnson, VP Government Affairs

As the 2014 Session winds down budget discussions are in full swing.  As with most budget talks the topic of new revenue or taxes is close behind. 

Already the Governor has released his education funding tax package of about $200 million.  The Senate Democrats yesterday announced their tax package and the House Democrats rolled theirs out today. Neither the House nor Senate Republicans or the Majority Coalition Caucus is expected to propose a tax package. 

Included in all the tax packages and of great concern to retailers is the repeal of the non-resident sales tax exemption.  This exemption encourages residents of states and provinces with low or no sales tax to shop in Washington State.  The impact of this exemption is particularly felt along our border with Oregon that has no sales tax and in Seattle, King County, where Alaskans are known to shop when visiting on holiday and for business. 

The state Department of Revenue estimates retailers will lose $45 million in sales if the exemption is repealed.  Some small businesses along the Oregon border report that up to 60 percent of their shoppers come from across the Columbia River.

It's beyond debate. Removing this exemption will cost Washington State businesses, both large and small, sales and jobs.  You can't lose $45 million in sales and not reduce your workforce.

Importantly, the Joint Legislative Audit and Review Committee studied the exemption and recommended that it was best to retain it.

Numerous businesses, chambers of commerce and trade associations have testified, written letters, sent e-mails and met with legislators asking for the exemption to remain intact.  However, year after year attempts are made to either repeal or make it a remittance program, which would have the same effect as a repeal. 

Tough budget choices have to be made to fund our state's education system.  But putting Washington workers on the unemployment rolls by eliminating this proven and effective tax exemption is shortsighted and pointing the state in the wrong direction.

Revenue seeks comments on upcoming tax advisory

The Department of Revenue is preparing an advisory addressing when awards must be included in the sales price of a purchase and when awards represent a discount excluded from the sales price.

Revenue has requested comments from retailers no later than March 7 of this year. Click here to read a draft of the advisory to form the basis of any comments. Retailers typically introduce rewards programs to promote loyalty among customers.

Revenue instructs those wishing to comment to e-mail their comments to Tim Jennrich as TimJe@dor.wa.gov.

Source: DOR

Workers' comp reform bills remain in play

By Tammie Hetrick, VP Retail Services

As the Legislature nears adjournment, WRA is keeping its eye on the progress of four bills that promise much-needed reform of the state's workers' compensation system.

*SB 5112 was scheduled for a hearing today in the House of Representatives. It would allow Retrospective Ratings groups or employers the authority to schedule agreed upon independent medical examinations or referrals to vocational services. Though it passed the Senate, it will have a tougher time getting House approval.

*Also scheduled for a House hearing today is SB 6179, which would authorize group self-insurance. It has passed the Senate, but it, too, will have a tough time winning House approval.

*SB 5127 would eliminate the age restriction on structured settlements of workers' comp claims. It has passed the Senate and WRA was awaiting word about whether the House would hold a hearing.

*SB 6522 would exempt from public disclosure information submitted to the state related to structured settlements.

This combination of bills would result in significant savings to the state and employers and provide more employees with options to settle their cases, if that were their wish.

But despite the Senate's recognition of the value of these bills, we don't anticipate the same support in the House. It just doesn't appear at this point that we're going to see much reform or chances to save more money during this session.

Adjournment nears for Legislature

Today is Day 45 of the 2014 Legislature's scheduled 60-day session set to adjourn on March 13.

In a week dominated by various state budget proposals, WRA continues to support and monitor bills of importance to retail members.

Here is a summary of other key bills still in play that WRA has been monitoring:

*HB 2155 is meant to discourage liquor thefts by teenagers. It is scheduled for a Senate hearing on Friday. WRA is neutral after working to help improve the bill's language so that patterns of theft must be documented before a store owner would face possible penalties.

*HB 2246 regards a voluntary recycling program for lights containing mercury. It has passed the House and awaits action in the Senate. Though WRA does not support the bill, the association has worked to help achieve a vendor allowance for retails who would choose to participate in the program.

*HB 2353 aims to allow retailers to seek $250 fines against nuisance visitors who have received written notices of trespassing.  The bill has passed the House and was scheduled to be heard in a Senate committee later today.

*HB 2163 would require retailers to perform age screenings for customers of cough syrups. Customers would have to be age 18 or older. The bill has passed the House and it awaiting Senate action. WRA does not support the bill because members typically already screen cough syrup customers by age to prevent teens from becoming intoxicated on the product.

Senate introduces budget; House followed today

The state Senate this week introduced a revised state budget for consideration in advance of today's release of a House version.

The Senate bill slightly boosts funding for education and would result in a balanced budget before lawmakers meet next January to adopt a two-year spending plan. This week's Senate introduction is a supplement budget to adjust in the second year of the state's two-year budget cycle.

The Senate bill would increase state spending by $95.7 million but not include funding for teacher cost-of-living raises. 

The Washington Research Council has produced a detailed policy analysis of the Senate spending plan. Click here to review it.

Contrary to the Senate, Gov. Inslee has urged the House to include teacher raises and to repeal tax incentives to raise funds.

A House budget proposal released earlier today calls for $100 million in new spending, including the repeal of tax incentives including the out-of-state sales tax exemption supported by WRA and crucial to the livelihoods of businesses along the state border with Oregon. See The Olympian for an early report on the House budget version.

WRA is working to preserve the out-of-state sales tax incentive through which retailers along the Oregon border derive as much as 60 percent of their business. Repealing the incentive would result in layoffs and business closures, WRA has warned .

The Senate is expected to take a floor vote on its state spending bill this week.

The Legislature is working toward a scheduled March 13 adjournment.

Sources: TVW, The Olympian

Letter writer outlines the costly ripples of raising the minimum wage

A former small business owner summed up in three paragraphs the burdens of steadily rising minimum wages in Washington State.

In a letter last week to the Seattle Times, the former fast food restaurant owner told of the unintended consequences that added burdens to the operation of his stores.

Author Jim Robinson told of having to raise his prices, which depressed sales and succumbing to the need to raise the salaries of his higher-paid workers or risk losing them to other employers.

"In fact," Robinson wrote, "every year that there was an increase in the minimum wage, I did have to cut the hours of my staff."

Meanwhile, Gov. Inslee announced last week during a trip to Washington, D.C. that he was considering an executive order to raise the minimum wage for state workers. Though he didn't mention a size for an increase or how to pay for it, Inslee in the past has suggested an hourly increase of up to $2.50. The state minimum wage this year, the nation's highest, is $9.32.

WRA opposes raising the minimum wage because it forces companies to reduce services and to lay off employees while raising pressures to raise prices. A higher minimum wage also is toughest on young, inexperienced people seeking their first jobs. As these forces combine, they hurt the overall economy, WRA believes.

Click here to read the reasons why a Seattle small business owner thinks the city's proposal for a $15 an hour minimum wage is  a bad idea.

Source: Seattle Times

Report endorses WRA-backed teen wage bills

A new Washington Policy Center analysis has endorsed two Senate bills backed by WRA that could alleviate the state's teen unemployment problem.

SB 6495 and SB 6471 are aimed at encouraging employers to hire teens.

The state's 29.5 percent teen unemployment rate is the nation's 6^th highest, the report notes. The rate does not include 16 to 19-year olds who have quit looking for work, it continues.

The most recent recession cannot be blamed for the high teen jobless rate, the report noted. Since 2002, well before the recession, in all but one year, the state ranked among the nation's top 10 in high teen unemployment rates, it reported.

6495 would extend to 16-19 year olds the current law that allows businesses to pay 14-15 year old workers 85 percent of the state $9.32 minimum wage. 6471 would allow employers to pay the federal minimum wage to workers 14-19 from June 1 to August 31.

Click here to read the Policy Center's memo to the Legislature about these bills.

Source: Washington Policy Center

Retailers seek health care relief in upcoming House vote

Retailers who have been seeking relief from national health care reform are looking forward to a possible vote in the U.S. House of Representatives in the next few weeks.

The House is expected to vote soon on H.R. 2575, the Save American Workers Act, that would change the Affordable Care Act's definition of a covered, full-time employee from 30 hours of work per week to 40.

Changing to the traditional full-time definition would allow employers to add more hours to part-time employees.

The National Retail Federation and the Retail Industry Leaders Association have been working to build support for the bill. 

Increased education spending has not improved performance, graduation rates, new analysis shows

As the 2014 Legislature is preoccupied with working to meet a Supreme Court mandate to boost education spending, a new analysis shows that past spending increases have not resulted in better scholastic outcomes.

A report by the Washington Policy Center to the Legislature found:

*Public school graduation rates remained flat even as school spending between 1990 and 2013 increased 28 percent, adjusted for inflation.

*The public school graduation rate in 1990 was 76 percent, and 77 percent in 2013.

*Trend data on academic outcomes for public school students statewide have remained largely unchanged for years.

The report concludes:  "Using state data, our research found there is no apparent correlation between sending more public money to school districts and higher graduation rates or improved academic scores for students. In fact, state figures show that while lawmakers have increased public spending on schools sharply in recent decades, graduation rates and academic learning for students have remained flat."

Click here to read the entire report to the Legislature.

Source: Washington Policy Center

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. This is even more important in the New Year because the major national shippers have just increased rates. Click here to obtain a rate analysis matching your needs.

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.

UI insurance no longer mandatory for corporate officers

Under a new state law, corporations no longer pay unemployment taxes on corporate officers unless the corporation requests coverage for all of its officers.

Such a request must be approved by the state Employment Security Department. The new law applies only to corporations.

Click here to see answers to several questions about the new law. Corporations must apply by March 1 to continue uninterrupted coverage for all of this year.

Corporations that don't pay state unemployment taxes still must pay the full amount of federal unemployment taxes to the IRS.

Source: Employment Security        

March outreach program helps Thurston retailers prepare for plastic bag ban

Thurston County Solid Waste has updated its website to help businesses prepare for a ban on plastic shopping bags that takes effect on July 1, 2014.

Unincorporated Thurston County has joined Olympia, Lacey and Tumwater in voting to ban plastic shopping bags. The "Resources for Retailers" page on the website, http://www.co.thurston.wa.us/solidwaste/bags/bags-retailers.html, includes answers to common questions and downloadable signs to display in stores.

Other outreach steps include:

*Billing inserts in March/April trash bills

*A letter and FAQ sheet that will be mailed to affected businesses in March.

*Chambers of commerce and business associations are relaying updates via e-mail supplied by Thurston County Solid Waste.

Besides banning plastic, stores also must charge 5 cents for paper carryout bags to encourage customers to bring reusable bags to shop.

Revenue offers free March 12 business tax webinar

The state Department of Revenue will conduct its first ever online business outreach webinar at 10 a.m. on March 12.

The free webinar is scheduled for one hour. The department plans other free webinars over the course of the year.

"We've offered in-person workshops for a number of years, and offering online webinars will make it easier for small businesses to fit a workshop into their busy schedules," Revenue Director Carol K. Nelson said.

To register, visit www.dor.wa.gov/webinar. A registration deadline of Feb. 28 has been established.

Participants will learn about Washington excise taxes, reporting classifications, deductions, sales tax collection and record-keeping requirements. The webinar facilitator will answer specific questions at the end of the webinar.

Source: Revenue

Safety tip: (one in a series)

Talk about accidents that almost happen

Bob was in a hurry to get a product out of the stock room.  He needed a ladder but couldn't position it properly because another object was in his way. Regardless, he leaned the ladder incorrectly and climbed up to retrieve an item.

As Bob was coming down, he felt the ladder sliding to the right. He was able to correct his balance and made it down to the ground safely.

This incident is what many call a "close one." Often, workers keep it to themselves and brush it off without a word.

Remaining silent is a missed opportunity.  What was close to becoming an accident needs to be addressed and discussed so that employees can agree on how to avoid a potential injury down the line.

Employers should encourage workers to report close ones so that improvements can be made, including sharpening up employee safety habits.

Scenarios like the slipping ladder happen in different ways and in different types of workplace and often involve dangerous power equipment. Too often, employees chalk it up to luck and keep it to themselves.

It's better to share the experience and use it as a discussion point to amplify the importance of companies and employees committing to safety.

Bob's experience also would be an opportunity to add proper use of ladders as a topic for your next safety meeting.

WRA employs Rick Means as Safety and Claims Coordinator. Rick is available to members to help draw up safety plans and suggest topics for safety meetings. Contact him at 360-943-9198, Ext. 18 or rick.means@retailassociationservices.com.