WRA's 2011 Legislative Priorities
There are two important pressure points in the 2011 session that drive a number of WRA priorities:
1. The Need to Balance a $4-6 billion budget deficit: — Although the risk of major tax increases is diminished because of the reinstatement of the two-thirds majority requirement, there are risks and opportunities that will likely emerge during the session. These include:
- Alcohol pricing – in 2009, the Legislature used funds from the liquor revolving account to fund general state government. To restore those funds, the Liquor Control Board temporarily raised the price of spirits to all customers, including licensees, for the current biennium. The WRA expects pressure to maintain the price level to fund state and local government programs. The governor’s proposed budget calls for extending the price hike for the next two years.
- Licensing fees – The WRA expects to be defending against proposals to increase many, if not all, licensing fees, fees for local health departments, or other non-tax charges on hospitality businesses to fund state and local government activities.
- Gaming – The shortfall in state revenue may create the opportunity for debate on if, and how, modifying current gaming restrictions could assist state and local governments, and businesses.
2. Increases in Workers Compensation and Unemployment Insurance Taxes
- Unemployment Insurance (UI)– Although the UI Trust fund remains healthy, the ongoing level of benefit payments from the fund has triggered a statutorily mandated increase in UI taxes. This increase, in what is commonly referred to as the “social tax”, has a much greater impact on businesses with little, or no, history of layoffs than on businesses with a history of large numbers of layoffs. The WRA is working to identify options for averting a tax increase in 2011. To do so, legislation must pass in the first month of the session. The WRA expects pressure from labor to increase benefits for unemployed workers, which could negate the benefit of a tax change. Additionally, in order to become eligible for $98 million of federal funds, the governor is proposing to increase training benefits from the UI trust fund.
- Workers Compensation/ Retrospective Rating Programs:
- Workers Compensation – The Department of Labor and Industries announced an average 12% increase in workers compensation premiums for 2011. For restaurants, the average increase is expected to hover around 6%. WRA, and the business community, will again be offering ideas for reforming the workers compensation system to lower overall costs and improve claims management.
- Retrospective rating programs – In 2009, the Legislature debated reforms of retrospective rating programs that would have adversely impacted the WRA’s ability to offer a competitive program for our members. Due to a number of administrative changes to the program enacted over the last year, the pressure for legislative action appears to have diminished. Nonetheless, the WRA will remain vigilant.
Additional Defensive Priorities:
- The WRA will continue to defend against increases in taxes or fees in the following areas:
- Pop syrup or other taxes on food, beverages and ingredients
- Street utility taxes
- Extension of the sales tax on purchases in restaurants in King County, except under conditions acceptable to WRA members
- Local options taxes, such as a proposal from the counties to authorize them to collect a B&O tax
- The WRA will work with the general business community to protect WRA members from increased costs for implementing the federal health care mandates.
WRA Pro-Active Priorities:
The WRA will be advocating favorable outcomes on the following:
- Taxes on employee meals – sales and B&O taxes are being levied on the value of meals that employers are providing employees free of charge. The WRA intends to propose legislation to exempt meals provided free of charge from sales and B&O tax.
- Authorizing on-line food safety training – currently food safety training and the issuance of food worker cards is totally under control of individual counties. With current revenue challenges facing many counties, the ability of the counties to meet the task of providing training, testing and certificating every food worker in their respective county has been diminished. The WRA is working with the state Department of Health on a proposal to authorize non-county entities to provide food worker card training, testing and certification as long as that program is certified (possibly by the state Board of Health).
- Allowing spirits, beer and wine restaurant licensees the ability to sell “growlers” for off-premise consumption.
- Privatizing the sale and distribution of liquor – The WRA will work with interested stakeholders to develop a proposals to add competition in the sale and distribution of spirits in Washington state.
- The WRA will continue to be a constructive participant in packaging, energy and other sustainability issues impacting the hospitality sector
Minimum Wage and Tip Credit – Economic challenges facing WRA members continue to be exacerbated by the current policies guiding the growth in the minimum wage and the lack of tip credit in Washington state. Additionally, the lack of a workable teen wage/entry level program in the state disadvantages both entry level workers and businesses that could benefit from both.
In October, the Department of Labor and Industries announced a 12-cent increase in the minimum wage for 2011.
While it is doubtful that the Legislature or governor would take favorable action on reforms to the minimum wage or teen wage, the WRA lobby team’s objectives for 2011 include:
- Continue educating lawmakers and others on the adverse impacts of current minimum wage policies
- Pursue options for tip credit and teen wage with the Department of Labor and Industries
Please Help Us Help You
Your GAC will be meeting weekly during the session. Please join the calls and help us insure that WRA is taking the right approach to issues as they arise during the session. Contact Government Affairs Manager Julia Clark, firstname.lastname@example.org.