Joining AWB members for lunch in Olympia last Thursday were Gov. Chris Gregoire's budget director, Marty Brown, and her legislative director, Jim Justin.
Brown, a longtime fixture in Olympia politics, did not mince words about the gravity of the challenge before lawmakers this session. While Brown believes the next revenue forecast will likely not be significantly different, caseload numbers are likely to shuffle the internal workings of putting together the supplemental budget. (State caseload figures are due out Feb. 10; the revenue forecast follows on Feb. 16.)
"This is tough. There is not an easy path to get this stuff done," said Brown. "There's a lot of uncertainty -- not so much in Washington state but...in the world economy. And our economy is not necessarily dependent on those things, but the consumer confidence that occurs with changes in Europe, activities of Congress, really is a key to our recovery."
Businesses are not back to full speed yet, Brown said, and any economic gains made through private sector hires are being offset by cuts in state and local governments.
"I don't see a real turn around, I don't see a real quick decision-making process here," Brown said, "but I also don't think [lawmakers] are going to stay long, either."
Given the legislative landscape, Justin characterized Gregoire's final policy agenda as a "fairly aggressive, broad" list of proposals for a 60-day session, offering thumbnail sketches of the governor's priority legislationn. The package includes 17 bills, though three of the six aerospace bills, Justin noted, were passed during the December 2011 special session.
The governor's three remaining aerospace bills may not have the necessary support to advance this session. Justin admitted there was little appetite for the governor's proposal to extend B&O tax credit. Justin said Gregoire will continue to work her two remaining aerospace bills -- on workforce coordination and aerospace research at the University of Washington.
One Gregoire proposal AWB has openly supported this session is her tax simplification measure (SB 6176 and HB 2490) -- "and this is one she really, really wants -- and it's not going to be easy," Justin said. The aim of the bills is to make the state Department of Revenue the sole collector of business and occupation taxes, similar to the way sales tax is handled. The change will result in considerable savings in time, money and frustration for employers, especially small businesses. But the cities fear it will cost them money and are pushing back with a host of arguments that state officials have debunked.
"This is something you're going to see a lot more movement from her on in the coming weeks," Justin said. "We will work it aggressively and we will encourage as much help as we can from the association and individual businesses as well," he said. "We would truly appreciate your help on this one."
Other bills on government reform, marriage equality, lottery privatization and health exchange benefits legislation are also on the governor's docket, but it's her tax proposals that garnered the most attention at the luncheon. Justin said the governor will continue her push for both the half-cent increase in the state's sales tax as well as her transportation package -- which includes a $1.50/barrel tax -- for maintenance and operation of state roads and ferries, though the transpo package has "a long, long way to go."
This week, AWB is scheduled to host leaders from the House and Senate, including Sen. David Frockt, Senate Majority Assistant Floor Leader and Rep. Larry Springer, Deputy Majority Leader for Jobs and Economic Development.