State needs to protect businesses
February 1, 2010 · 3:48 PM
By Rep. Dan Roach
More than 320,000 people in Washington are out of work, the highest unemployment in our state in more than two decades. In November, nearly 6,500 people filed for unemployment benefits within the 31st Legislative District. To put that in perspective, that’s far more people unemployed in the district than live in the entire city of Buckley.
Yet, even as families struggle in this fragile economy, the governor is moving forward this legislative session with an agenda that includes tax and fee increases to cover a $2.6 billion state budget shortfall.
“We must have a responsible, balanced approach of painful cuts and new revenue,” the governor said Jan. 12 during her state-of-the-state address.
I believe tax increases would be the wrong approach. How can we ask people to pay more taxes when they have lost their jobs and many are barely able to pay their bills and put food on the table? We can’t dig our way out of a budget deficit by pushing our state deeper into a recession through tax increases. As Winston Churchill noted, “For a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”
Instead of increasing taxes, we need to use this 60-day legislative session to approve policies and incentives that protect existing jobs and create new ones in the private sector. Putting people back to work will not only help families, but it is the responsible way for the Legislature to respond to our current budget challenges. A strong economy makes people less reliant on government services and at the same time generates the revenue that helps us carry out the core functions of government.
Several of my legislative colleagues and I have crafted a jobs agenda we call the “Made in Washington Plan.” We believe when government reduces the cost of doing business in our state, it frees up resources for employers to expand and create private-sector jobs. Our proposal includes: reforming the state’s costly and complex workers’ compensation system, reducing the costs of unemployment insurance, streamlining the permitting process for quicker decisions, and requiring new state agency rules be reviewed by the Legislature before being adopted.
In addition, I’ve introduced legislation that would help to give newly-created small businesses a head start. House Bill 2458 would exempt new, small, start-up businesses from paying business and occupation taxes during their first year of operation.
The toughest period of time for a new small business to succeed is during its first years of operation. That’s because it takes capital to open and keep businesses operating before they ever make a profit. B&O taxes are determined on the gross receipts of a business, which means those taxes must be paid to the state first, even if the business has not turned a profit.
For some new, small businesses, that heavy hit of the B&O tax is just too much to overcome. The hopes and dreams of those entrepreneurs are dashed even before they could gain a foothold in an already difficult economy.
After the first year, the bill would slowly ramp up the B&O tax for those businesses with 25 or fewer employees. This would give small businesses time to become financially stable and allow them to grow. When businesses grow, they hire new employees, helping to kick-start our state’s economic recovery.
It’s my hope that this legislation could eventually be extended to provide tax relief for other employers, thus helping to further stimulate Washington’s economy.
Lawmakers are scheduled to be in session in Olympia until March 11. This year, we have an important choice to make. We can either raise taxes and drive more employers and jobs out of the state through higher government-imposed costs; or we can resist tax increases and seek fundamental government reforms that would reduce costs and provide for a better business climate that could allow employers to grow and create new jobs. Let’s make the right choices and get Washington working again.
Dan Roach is a five-term member of the state House of Representatives. He represents the 31st Legislative District, which takes in Enumclaw, Buckley, Bonney Lake and Sumner.