Feb. 2, 2009

Our small businesses are the key to our state’s economic success
Rep. Barbara Bailey

The words “bailout,” “stimulus package” and “job loss” were not a big part of our vernacular this time last year. While some saw clouds forming, few were able to forecast the economic storm we are in today.

As families and employers weather this storm, our state has a unique opportunity to provide real relief to small businesses and commit to a prioritized state government. I have some ideas on how to reach these goals.

State lawmakers must be mindful of how their actions affect our small businesses and utilize finite state resources in ways that bolster the economy. The decisions made this legislative session will impact our state economy and budget for years to come.

Our governor unveiled her “Washington Jobs Now” plan to jump start our state’s economy. The plan essentially accelerates a segment of what we already planned to do with our capital budget – including construction and transportation projects. While I support essential infrastructure, I fear the approach is short sighted. As a former lead Republican on the House Community, Economic Development and Trade Committee, I can tell you that short-term fixes can have long-term consequences.

I’m more concerned about small businesses, like those in La Conner, struggling to keep their doors open. We must change our business environment – so employers can stay open now and have certainty for the future.

Let’s look at some of the challenges facing our small businesses – and what can be done about them. First, our state is the only one in the nation that taxes gross receipts of employers – the business and occupation (B&O) tax. This type of tax disproportionally harms small businesses. Our state should look at lowering taxes, make the B&O tax system easier for employers to navigate and find new incentives for employers.

Second, our state has one of the higher minimum wage rates in the nation. This is good for people who have these jobs. However, it is difficult for those who lost their jobs because employers had to reduce their workforces as a result of the new rate that began January 1, 2009. Our state should look at providing flexibility to its minimum wage rate when state unemployment numbers reach certain benchmarks. This could make the difference in some small businesses retaining, or hiring, employees in tough economic times – or not.

Third, state lawmakers must not let any existing tax incentives expire or be terminated. Many of these tax incentives are vital parts of business plans and helped pave the way for job creation and business growth.

Fourth, we must reform our unemployment insurance and workers’ compensation systems. Without getting into arcane details, our employers still face too many costs and regulatory burdens with these systems.

Last, and perhaps most importantly, state lawmakers must control state spending. If we cannot control state spending, we cannot control taxes on families and employers.

I support a no-new-taxes budget. Taxpayers and businesses did not get the state into its $6 billion budget shortfall, nor should they be expected to bail it out. Now is the time to commit to a more prioritized, efficient state government. While reductions will be hard to make, our state must separate wants from needs and live within it means.

I’ve always been an optimist and, in my time as state representative, I’ve seen the great people of this state rise up to meet challenges. The work and times ahead won’t be easy, but I firmly believe our state’s economy and budget will emerge stronger from them in the future.

State Rep. Barbara Bailey, R-Oak Harbor, represents to the 10th Legislative District and is assistant ranking Republican on the House Ways and Means Committee. She can be contacted at (360) 786-7914 or bailey.barbara@leg.wa.gov. The 2009 legislative session began Jan. 12, and is scheduled to run 105 days.

For more information, contact: John Handy, Assistant Director: (360) 786-5758