Lawmakers Show Little Valentine's Day Love for Private Sector Job Creators

A quick roundup of weekend legislative activity shows few candy hearts (taxable or not) from lawmakers on this Valentine's Day holiday. Although most of the attention focused on House committee activity to suspend the I-960 supermajority requirement and to move forward with a package of tax hikes, employers express deep concern with union-backed bills to boost unemployment insurance costs. With the UI trust fund already being drained rapidly, these bills presage another increase in UI taxes on struggling firms.

As Brad Shannon writes (and I paraphrase), having passed the half-way mark on a short legislative session, lawmakers will now move quickly to make it easier to raise taxes, raise them, and adopt a budget. Here's what Shannon says:

Lawmakers need to get moving, because they have only 25 days left in their session to close a $2.8 billion budget gap with new taxes, spending cuts, federal aid and shifting other state revenues.

“I think it will be sooner rather than later. We don’t want it to be hanging around,” House Majority Leader Lynn Kessler, D-Hoquiam, said about a coming vote on suspending I-960. The House is in a hurry to get a bill back to the Senate for approval, so Gov. Chris Gregoire can sign it and the Senate can roll out its budget plan, including tax increases, as soon as Wednesday.

So far, we don't know what that final tax plan will look like. The House Finance committee considered HB 3176 on Saturday without bringing it to a final vote. Here's a Washington Research Council analysis of the bill.  

Legislators have also proposed doubling the estate tax, increasing the state sales tax by 15.4 percent, and tripling the tax on hazardous substances. 

I'm sure we're not done, but the menu is already getting crowded and caloric.

Meanwhile, the state seems destined to fall short in its effort to capture Race to the Top Dollars for the public schools, a point well made by Washington Roundtable president Steve Mullin in this edition of Up Front on KING 5. The News Tribune editorial board writes succinctly today:

We now know the Legislature plan’s for competing for Race to the Top education dollars: Too little, too late.

So we miss out on federal funds designed to spur innovation and student achievement, while lawmakers pave the way for tax increases, many (if not all) of which will dampen private sector investment and hiring, costing more workers their jobs. Inexplicably, this is when some legislators think employers should be burdened with yet another large payroll tax hike. It's not as if they haven't already been hammered this year, as AWB president Don Brunell writes here. 

Growing momentum behind the labor-backed legislation prompted Steve Mullin to send this letter to the governor and legislature. Read the letter for specific positions, but this excerpt frames the employer community's position:

The Roundttable understands that the legislature is considering a number of proposals that add permanent new costs to the unemployment insurance system – increasing the eligibiity for persons who voluntarily quit their jobs, raising the multiplier  for determining benefits to four percent, and extending benefits to people seeking part-time work. These measures will increase employer rates, which will further hinder job creation.

Employment growth, private sector employment growth, is the key to economic recovery. And, as the Olympian reports, the state's top forecaster, Arun Raha, sees a long slog ahead.

[Raha] also says job growth is under way in Washington, but that it will be two more years before the state has the same level of employment it had in early 2008, when the recession began here.

Possibly, but if legislators follow their present course, the rebound will likely take much longer.