Association of Washington Business – Updated Weekly

In the final two weeks of the 2025 legislative session, lawmakers continue to debate a flurry of tax and budget proposals — with much remaining in flux. As negotiations continue, AWB is urging legislators to make wiser spending decisions through our Budget Smarter campaign.

• In an op-ed in the Bellingham Herald, Amelia Cook, owner of Mount Vernon manufacturer Goodwinds Composites, warns that “tax proposals under consideration in Olympia will put our very existence at risk,” noting that even tax increases targeting large employers will impact smaller businesses in an interconnected economy.

• The Wall Street Journal Editorial Board took notice of the state’s tax debate, writing that billions in proposed taxes would compound the damage from sweeping new tariffs.

Major bills still in play: AWB continues to engage on consequential bills that are still alive in the Legislature, including:

• UI for striking workers: The state House voted 52-43 Saturday to extend unemployment insurance benefits to striking workers. The bill was amended to impose a four-week limit on receiving benefits, down from the 12-week limit passed by the Senate. The legislation will head back to the Senate for concurrence. AWB continues to oppose UI for striking workers in any form.

• Rent control: After contentious floor debate Thursday, the Senate passed a bill to limit annual rent increases to 10% plus inflation — up from the 7% cap approved by the House last month. The Senate will send the amended bill back to the House to concur on the changes. AWB opposes any bill with a rent cap.

• Cutting hospital funding: A concerning bill that would limit the reimbursements that the state’s public employee insurance plans pay to hospitals for services is still alive. Hospitals warn the bill would deal them a financial hit, especially as they face reductions federal funding reductions, resulting in less money available for patient care.

• Increasing property taxes: A House proposal to raise the annual cap on property tax increases from 1% to 3% is scheduled for executive session Friday. AWB opposes this bill along with a slew of other proposed tax increases.

Next major deadline: Wednesday is the deadline to pass most bills from opposite house chambers, except measures relating to the budget. Lawmakers are scheduled to adjourn the 2025 legislative session on April 27.

📣 Take action: Email your legislators and urge them to make smarter spending decisions.

Stormy outlook: U.S. economic growth is slowing, with tariffs and federal policy changes further clouding the picture, experts say in the latest edition of AWB’s Washington Business Outlook.

• Consumer confidence has dropped, signaling a possible recession ahead.

• GDP growth slowed in the last quarter of 2024, with expectations for even slower growth in Q1 of 2025.

Tariffs and trade: New tariffs — which are taxes paid by both importers and exporters — could have ripple effects across Washington’s economy.

• Tariffs on Canadian energy imports — especially natural gas — will increase energy costs for Washington businesses and consumers and weaken regional economic growth.

• Washington’s agricultural sector could be once again caught up in a global trade war, with crops including apples and sweet cherries the likely target of retaliatory tariffs.

Economist’s view: Tariffs are usually a negotiating tactic to achieve non-economic goals, writes former Washington state chief economist Arun Raha.

“What is not immediately clear, however, is whether the costs imposed by the short term rise in uncertainty and the longer term loss of credibility that it creates, is indeed the optimal strategy to achieve those goals,” Raha said.

As sweeping new tariffs threaten to upend global trade, Washington employers are bracing for the impacts. AWB News shared the story of Access Laser, an Everett manufacturer anticipating both higher material costs and reduced international sales due to the tariffs.

“Because so much of our orders are international, we are expecting the retaliatory tariffs to have a chilling effect on our business, especially China,” Access Laser CEO Gordon Bluechel said.

AWB has heard from many other employers facing impacts. Take AWB’s 2025 tariffs survey to add your perspective.

Other stories: Yakima Valley fruit growers worry how the tariffs may affect their bottom line, while the tabletop gaming industry is bracing for higher costs and border-town businesses are seeing a drop in Canadian visitors.

Trade in Washington: AWB’s issue brief details the role of trade in Washington’s economy and risks of broad tariffs on the economy.

Reinforcing Washington-Canada links: Last week, the Washington State Legislature passed a resolution reaffirming the critical economic ties between Washington and Canada, as sweeping tariffs threaten to disrupt this key economic partnership.

• The $25-billion-a-year trade relationship between Canada and Washington supports jobs and innovation in sectors such as agriculture, energy, manufacturing, technology and more.

Reception: Following the adoption of the resolution, Washington legislators and business leaders were joined by Canadian diplomats Friday at a reception at the state Capitol.

"The passing of this resolution is a significant demonstration of friendship between Washington and Canada," said Nathalie Beaudoin, consul for foreign policy and diplomacy at the Consulate General of Canada in Seattle.

Learn more: AWB led a trade mission to Canada last summer to strengthen cross-border trade and cooperation in other areas.

Your perspective matters: AWB’s latest quarterly employer survey is now open. The wide-ranging survey gauges employers’ views on the health of economy and what they see in the months ahead.

New questions on tariffs: The survey asks a slate of questions on trade policy — how recently implemented tariffs are impacting businesses and the steps they are taking to mitigate impacts.

Useful data: The quarterly polling of employers provides important data on employers’ top challenges and priorities. View the winter 2025 data.

HOUSING

Morgan Irwin, AWB’s lead on land use and housing, continues to engage on this important housing bill:

• Rent control: The Washington State Senate voted 29-20 Thursday to approve a 10% cap on annual rent increases, with one Democrat joining Republicans in opposition. Legislators amended the bill to limit rent increases to 10% annually plus inflation, up from a 7% cap approved by the House last month. AWB is relieved to see lawmakers take a more cautious approach to this policy, which would discourage creation of new housing during a severe housing shortage. However, we will continue to remained opposed to a rent cap in any form. The Senate will now send the amended bill back to the House to concur on the changes.

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WORKFORCE

Emily Wittman, AWB’s lead on workforce and education, is tracking this bill and others:

• Career opportunities for students: Students engaged in career and technical education programs face barriers to employment due to their age. Last week, the Legislature passed House Bills 1722 and 1414 with broad bipartisan support, making it easier for students to earn their credentials and begin their careers before their 18th birthday.

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HEALTH CARE

Emily Wittman, AWB’s lead on health care policy, is engaging on this bill and others:

• Cutting hospital funding: Senate Bill 5083, which would cap the reimbursements that the state’s public employee insurance plans pay to hospitals for services, is still alive. AWB remains opposed to this measure, with hospitals warning the bill would deal them a financial hit, especially as they face reductions in federal funding. Hospitals serving high numbers of PEBB/SEBB patients will be the most vulnerable, but these cuts will affect everyone in the community. “There’s going to be less money for patient care,” said Chelene Whiteaker, senior vice president of government affairs at the Washington State Hospital Association.

• Health carrier surpluses: Senate Bill 5808 was just introduced last week. The bill subjects local not-for-profit health carriers based in Washington state to a 3% tax on reserves over 600% of Risk Based Capital, on top of taxes already paid to the state. The policy offers yet another unreliable revenue stream on which to base long-term budget commitments.

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EMPLOYMENT LAW

Lindsey Hueer, AWB’s lead on employment law issues, is tracking this bill and others:

• UI for striking workers: Senate Bill 5041, which would allow striking workers to collect unemployment insurance benefits, was approved 52-43 in the House Saturday, with seven Democrats joining Republicans in opposition. The bill was amended to impose a four-week limit on receiving benefits, down from the 12-week limit passed by the Senate last month. As the bill heads back to the Senate for concurrence, AWB will continue to speak out against the legislation. Earlier this month, AWB testified about the bill’s potential fiscal impacts and potential to increase costs for employers.

• Paid family leave expansion: House Bill 1213 could move to the Senate for a vote any minute. The bill would require all businesses, regardless of size, to provide job protection to employees who take Paid Family and Medical Leave, among other changes. AWB believes the bill would create a hardship on small employers and is an inappropriate of expansion of a program adopted as a compromise in 2017.

• Pay transparency updates: Senate Bill 5408 — which allows employers to correct job postings relating to salary disclosure requirements before they are sued — is moving closer to the finish line. AWB is pleased to see this bill move forward; it will curtail frivolous lawsuits against employers while preserving the intent of Washington’s pay transparency law. Learn more.

• Self-insured employers/workers’ comp: Senate Bill 5463 was passed 64-32 in the House on Friday. The bill requires employers with self-insured workers’ compensation programs to adhere to the good faith and fair dealing standard. State law already functionally requires them to do that with Department of Labor and Industries' broad existing oversight. AWB opposes this bill.

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TAX & FISCAL POLICY

Max Martin, AWB’s tax and fiscal policy director, continues to engage on many tax proposals, including:

• Increasing property taxes: House Bill 2049, which would raise the annual cap on property tax increases from 1% to 3%, is still alive. AWB continues to speak out against this bill, which would increase property tax bills for Washington residents and businesses and make housing more expensive. The bill is up for executive session at 8 a.m. Friday in the House Finance Committee, which may take a vote to move it forward.

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ENVIRONMENT

Peter Godlewski, AWB government affairs director for energy and the environment, is watching bills that include:

• Utility tax to pay for culverts: Senate Bill 5804 would divert the Public Utility Tax to create a fund to help pay for culvert replacements required by a lawsuit won by the tribes against the state.  The state is required to replace all culverts that block fish migration. The state has struggled to find a funding source to pay for this that doesn't impact other areas of the transportation budget. (For background, the Public Utility Tax is a cost added on public service businesses, including businesses that engage in transportation, communications, and the supply of energy, natural gas, and water.) AWB opposes SB 5084, as there is no nexus or connection between the costs that customers pay for their utility bills and work on culverts.

Inflation slows in March, as prices cool before tariffs

Consumer prices rose 2.4% in March from a year earlier, marking the lowest inflation figures since September. Core prices — which exclude volatile food and energy prices — showed the smallest increase in nearly four years.

However, economists warn that the data from March doesn’t factor in new tariffs, including 145% duties on imports from China.

PNNL Director Dr. Steven Ashby stepping aside

Dr. Steven Ashby, who has led the Pacific Northwest National Laboratory for a decade, is stepping aside, PNNL announced today. Ashby oversees PNNL’s $1.6 billion research budget and 6,400 employees of Battelle, which manages PNNL for the U.S. Department of Energy.

Once a successor is named, Ashby will take on a new role at Battelle as senior vice president of strategic partnerships to help manage its portfolio of eight Battelle-affiliated laboratories.

“As Battelle’s longest-tenured laboratory director, Steve has built a remarkable legacy of scientific discovery that has contributed to the advancement of our nation’s health, safety and prosperity,” Battelle President and CEO Lou Von Thaer said.

Room block discount closing soon: We’re just a month away from AWB’s 2025 Spring Meeting. Register now and book your room at Hotel Indigo before the discount room block closes April 22. The Hilton hotel is sold out, so don’t delay.

Timely and relevant: The event on May 14 in Vancouver will feature important policy discussions impacting Washington employers and valuable networking time.

• Get key national and state economic insights from Hamza Abdelrahman, senior economic analyst at the San Francisco Federal Reserve Bank, and Grant Forysth, chief economist, Avista Corp.

• Gain insight and clarity on federal issues’ impacts, in an afternoon session with two former members of Congress and a variety of innovative Washington business owners.

• Unlock productivity with Microsoft Copilot, in a morning demo with Vidhu Shekhar and Jack Elmore of Microsoft. The pre-event session will provide an overview of Copilot’s capabilities and benefits, data privacy and security, and practical applications.

• Enjoy an evening networking reception at Hotel Indigo to connect with fellow attendees, enjoy a special wine tasting experience with Barnard Griffin, and enter a raffle to win airline tickets

• And more. Click for the full agenda.

Highlighting manufacturing: AWB recognizes top manufacturers in many ways. One of the biggest is our annual Manufacturing Week bus tour, which will be crossing the state in October for the ninth year in a row. Tell us about your company to be considered as a stop on the 2025 tour — or nominate your company for a manufacturing award to also be considered as a stop on the tour (and be in the mix for one of AWB’s Manufacturing Excellence Awards).

• The Manufacturing Week bus will visit manufacturing shop floors and educational facilities in western Washington Oct. 1-3, and will visit the robust manufacturing ecosystem in eastern Washington Oct. 6-8.

Video rewind: Take a look back at the Manufacturing Week in this hot 2024 sizzle reel.

Apply for awards: Nominate now for AWB’s full slate of awards, presented at our gala Evening of Excellence in November in Seattle. There is no cost to nominate or receive an award. Watch our quick “learn how to apply” video and make your nominations by May 31.

• Check out the entire list of AWB’s award categories and nominate today!

📣Don’t miss out: Join the AWB Institute and State Board for Community and Technical Colleges at 11 a.m. Wednesday for an informative webinar on the Washington Workforce Portal. The one-hour webinar will include:

• A live demo of the Washington Workforce Portal and its features

• Success stories from Tacoma Community College, Greater Vancouver Chamber, and Thurston County Chamber

• Employer insights on expanding relationships with education partners

• Q&A session to explore collaboration opportunities

New primary care clinics: As an AWB HealthChoice member, you and your employees now have access to Kinwell clinics, which are delivering a new standard for primary care in Washington.

The Kinwell clinic experience includes:

• Timelier appointment availability

• Longer appointment times to establish a better one-to-one patient-provider relationship

• A whole-person approach to patient care, integrating primary care and behavioral health

• Health coaching for established patients at no additional cost

• Convenient access to in person and virtual care exclusively for Premera Blue Cross members

Find a clinic near you: See the list of 16 clinic locations across Washington. You and your employees can now schedule an in-person or virtual appointment today at www.kinwellhealth.com.

Please contact Helen Siggins with ProPoint for more information.

“Washington legislators must consider the ripple effects of their decisions. Raising taxes may seem like a quick way to increase revenue, but it risks undermining the very engine of economic growth — small businesses. We are the ones innovating, hiring, and reinvesting in our communities. We need support, not additional hurdles.” ~ Amelia Cook, owner of Goodwinds Composites in Mount Vernon, in an op-ed in the Bellingham Herald.