If you want
to get this
newsletter
via email...

Washington State Labor Council, AFL-CIO
a weekly report on the 2003 session

Previous editions

Also see Feb. 19 posting: Ergonomics repeal, hearing loss bills pass State Senate

FRIDAY, FEBRUARY 14
MORE business tax breaks?!

As a painful budget debate looms, legislators should remember syndicated columnist Molly Ivins’ First Rule of Holes: when you're in one, you should stop digging.

In a front-page article Thursday, the Seattle Post-Intelligencer pointed out that despite a $2.4 billion budget hole they have yet to tackle, legislators in both parties keep digging with legislation granting new special-interest business tax breaks.

Some dismiss such efforts as political; legislators trying to demonstrate advocacy for industries in their districts but knowing their bills have little chance of passage. But as the P-I points out, some of these business tax breaks have momentum and are not simply sponsorship fodder to pad political resumes. That appears especially true of sales tax breaks and credits for business research and development set to expire next year.

Certain legislators argue that anyone who refuses to extend these tax breaks is guilty of raising taxes. One wonders whether they think a lawmaker who stands idly by allowing the expiration of a temporary tax increase, such as one to pay for a stadium, would deserve credit for cutting taxes.

The corporate talking points mimicked by so many legislators this year include the ubiquitous “the answer to our budget problem is to grow the economy.”  The problem is that their prescription for growth is more special-interest business tax cuts that grow our budget deficit (and identify through omission which industries are doing fine and require no special favors!)  Don’t worry, they say, the tax breaks will create jobs that grow our economy. But the only guarantee we are offered for this trickle-down promise is their word.

For more than a decade, the Washington State Labor Council has sought legislation that says when businesses seek public assistance with promises to create or maintain good jobs, they should be held accountable for their promises.  Yet self-proclaimed “fiscally conservative” legislators have defeated those corporate disclosure efforts time and again, even as they continue to give away hundreds of millions of dollars in business tax breaks.

The WSLC again supports this concept in the form of HB 1869, sponsored by Rep. Jim McIntire (D-Seattle), which would require periodic performance audits of all tax breaks and credits “to determine if their continued existence will serve the public interest.”  That bill will be heard next Friday at 1:30 p.m. in House Finance Committee.

It’s going to take some fancy spinning for the right-wing legislators who routinely seek similar audits of government agencies to argue the promises of special corporate interests don’t deserve similar scrutiny.

To those anti-government ideologues who continue to ignore the national economic evidence and insist our state spent its way into our budget problem, we say “you’re absolutely right.”  During the economic boom of the mid-1990s, when a spending cap created massive budget surpluses, legislators approved more than 100 new business tax breaks.  Now there are more than 400 on the books, costing the state billions of dollars a year.

The WSLC is not arguing that all of these tax breaks are bad.  There are some we have supported to rescue ailing industries and protect good family-wage jobs. 

But given a budget debate that Governor Locke has kicked off on the sorry note of wage freezes and benefits cuts for state employees (a new “tax” targeting certain citizens if ever there was one) and other onerous cuts in services, the WSLC supports answering the question posed by Senate Minority Leader Lisa Brown (D-Spokane): “Are all 400 tax loopholes more important than the Basic Health Plan?”

Ironically, the advocates of these tax breaks also argue government should be run more like a business.  No business owner on this planet would invest precious revenue without measuring the return on the investment.  If CEOs were to engage in such blind investment and concealment, they would face shareholder lawsuits, federal prosecution or worse—an appointment to President Bush’s cabinet.

Governor addresses employers' ergo concerns

As we reported earlier this week, the ergonomics repeal bill (SB 5161) was removed from the Senate Republicans "Getting Washington Working Again" package of regulatory reform bills passed Tuesday.  Passing the Senate were SB 5255 limiting agency rule-making authority without legislative approval, SB 5256 insisting on cost-benefit analyses for rules and SB 5257 requiring gubernatorial approval of rules.

As of this writing, SB 5161 has yet to reappear.

Today's development is that Gov. Gary Locke, who last year granted employers a two-year delay in ergonomics rule enforcement, has directed the Department of Labor and Industries to further intensify its educational efforts and to establish new mechanisms to ensure fair enforcement.

"It is clear there is still considerable concern within the business community about the possible impact of the rule," Locke wrote in a letter to new L&I Director Paul Trause. So the governor has ordered the creation an Employer Resource Center and a new Ergonomics Assistance Awards program, the appointment of an ergonomics ombudsman, and the formation of an independent Ergonomics Enforcement Review Board to ensure fair and consistent treatment.

We applaud the governor for his commitment to keeping this critical workplace safety rule intact as he goes to extraordinary lengths to address employer concerns.  We hope state legislators acknowledge this unprecedented effort by ending the legislative assault on the rule.

Minimum wage "tip credit" hearing Thursday

Next Thursday, Feb. 20 at 8 a.m., the Senate Commerce and Trade (but not Labor) Committee will hear SB 5768, creating an adjusted minimum wage for workers who earn tips. You get one guess which way they want to adjust it.

Sponsored by Sen. Jim Honeyford (R-Sunnyside), this bill would deny future wage increases to tipped workers by freezing their wages at $7.01 an hour until our minimum wage rises all the way to $14.02.  The tipped workers affected would be those whose average tips reported to the IRS equal the minimum wage.  That means if they average $7.01 an hour in tips, they would get the lower sub-minimum wage.

The Washington Restaurant Association and its legislative advocates are pushing this bill because they think these workers are overpaid at $14.02 an hour. Speaking on behalf of restaurant owners, they say this tip credit will enable owners to hire more people, give more hours to existing workers and give raises to the kitchen staff who don’t earn tips. In other words, more hollow trickle-down promises to “grow our economy” after granting special business exemptions.

Even at $14 an hour (including tips), these workers are struggling to meet their most basic needs. They average only 28 to 30 hours a week and are far more likely than the rest of us to have few or no benefits, like health care and pensions.

Why would legislators who campaign they'll “fight for working families” (which just about all of them do now) even consider reaching into these workers’ pockets, taking away some of their wages, and handing it to their employer?

A stealth attack on wage-and-hour laws

Heard this week were SB 5462 and HB 1690, which purport to seek conformance between Washington state and federal wage-and-hour laws. What sounds like an innocuous effort at rule clarification would actually invite courts to reinterpret a century worth of our state's wage-and-hour laws. These bills will create new confusion and encourage litigation as employers struggle to reapply federal definitions and rules to state laws.

If these bills' sponsors have issues with some aspect of our state's wage-and-hour laws, they should address them specifically. These bills are unnecessary and unwise.

Business gambles, but injured workers lose

The business lobby's full-court press to cut injured worker benefits continues in hearings next week.

For those of you who haven't been following this issue, here's a brief history: Businesses sought and got $400 million in premium rebates in the past few years as stock market earnings rolled into a relatively healthy workers' compensation fund. That gamble backfired when the market went south and now there's not enough money to pay projected benefit costs. When the state proposed premium increases to restore the fund's health, the business community went ballistic and suddenly the problem was that benefits were too high. (In truth, they have always thought injured workers get too much compensation, and always will.) So now there are a number of proposed bills dramatically cutting benefits to ease the pain of business' self-inflicted premium increases.

The WSLC will continue to remind legislators that injured workers didn't cause this problem, and they shouldn't be forced to pay for it.

Some of the hearings scheduled next week

MONDAY—House Commerce & Labor at 1:30 p.m. hears several workers' compensation bills (see above); Senate Ways and Means at 3:30 p.m. hears SB 5012 on charter schools.

TUESDAY—House Criminal Justice at 10 a.m. hears bills dealing with prison labor; House Commerce & Labor at 6 p.m. hears more workers' comp bills.

WEDNESDAY—Senate Judiciary at 8 a.m. hears SB 5728 the worker blacklisting bill wrapped in a "tort reform" package; Senate Health Care at 1:30 p.m. hears SB 5704 requiring employers to share costs with employees for the Basic Health Plan.

THURSDAY—Senate Commerce & Trade at 8 a.m. hears SB 5768, the tip credit bill (see above).

FRIDAY—House Finance at 1:30 p.m. hears HB 1869, the tax-break performance audit bill (see above).

---

PREVIOUS EDITIONS of the WSLC Legislative Update:

Jan. 10 -- A Question of Priorities  (re: Explosion of corporate influence on government)
Jan. 17 -- It's the Economy, Stupid!  (re: "Competagogues" and Washington's business environment)
Jan. 24 -- Drug bill off to a strong start; competagogues go after ergo again
Feb. 3 -- Now is the time... to pay less? (re: workers' comp and minimum wage)
Feb. 7 -- Commerce and ANTI-Labor? (re: workers' comp, minimum wage and transportation)

Copyright © 2003  Washington State Labor Council, AFL-CIO