Association of Washington Business – Updated Weekly

Trade war brewing: As President Donald Trump imposed far-reaching tariffs on global imports last week, Washington official and business leaders are sounding the alarm about impacts to the state’s economy.

• On Friday, China moved to impose a 34% retaliatory tariff on all U.S. goods starting April 10. The tariffs sent stock markets tumbling, one of Wall Street’s worst weeks since the start of the Covid-19 pandemic.

• Washington farmers and seafood producers are bracing for potential impacts; China is the state’s No. 4 export market for agricultural products and seafood.

Washington leaders respond: U.S. Sen. Maria Cantwell has introduced bipartisan legislation that would give Congress more authority in setting tariffs. On Friday, Washington Gov. Bob Ferguson issued a statement on the tariffs:

“Our businesses, communities, and trading partners tell me this senseless trade war is making it very challenging to hire or plan for the future,” Ferguson said. “It is making our ports and product exports less competitive around the globe. And it is damaging relationships that have been decades in the making.”

What AWB is doing: AWB is seriously concerned about the impacts of the broad tariffs on Washington’s economy and threats to businesses and jobs. We continue to monitor the situation and assess the potential impacts across industry sectors. We just published a new issue brief on the importance of trade to Washington’s economy.

Share your perspective: Take AWB’s short survey and tell us how you expect new tariffs to impact your business.

In the final weeks of Washington’s Legislative session, state lawmakers continue to debate proposals for new and higher taxes as they work to finalize the budget.

• Last Tuesday, Gov. Bob Ferguson said he would not sign the budgets passed by the House or Senate because they rely too much on steep tax increases. The governor also rejected a wealth tax, a proposal backed by Democratic leaders in both chambers.

Still up in the air: In remarks last week, Ferguson did not explicitly come out against other taxes on the table, including a JumpStart-style payroll tax on large companies, B&O tax surcharge, and eliminating the 1% cap on annual property tax increases.

“We applaud Gov. Bob Ferguson’s statements opposing the unconstitutional and unworkable wealth tax proposal,” AWB said in a joint statement with three other business groups. “Still, we remain very concerned about other major tax proposals under consideration.”

United in opposition: Also last week, AWB joined with more than 65 business leaders to sign a letter urging lawmakers to reconsider their tax and budget proposals.

“Given national economic trends, Washington state cannot sustain continued tax and spending increases and simultaneously maintain our economic resilience and competitiveness,” the letter states.

Spending problem: Even with no new tax increases, state revenues are on track to grow a healthy 10% over the next two biennia. The tax proposals under consideration would be the largest in state history. Tell your legislators to make smarter spending decision rather than raise taxes.

Online briefing: Budget and tax discussions are changing by the minute. AWB will co-host another virtual briefing for employers at 3:30 p.m. Friday to share the latest updates on budget and taxes.

By the numbers: A bill to allow striking workers to receive unemployment benefits is still alive in the Legislature — and could move any minute to the House floor for a full chamber vote. AWB has new estimates on how the bill would impact the state’s UI trust fund:

• Under Senate Bill 5041, striking workers would be eligible to collect UI benefits for up to 12 weeks. If this bill becomes law, a major strike lasting 12 weeks could reduce the UI trust fund by 25%, according to AWB estimates based on state data.

Broad impacts to employers: The administrative cost of SB 5041 would be paid for with the Employment Security Department’s Administrative account — which all Washington employers pay into.

“Under both the House and Senate budgets, this account will likely be at near zero in the next biennium. Passage of SB 5041 will add expense to that account, adding pressure to increase rates. This will cost every employer in the state,” AWB Government Affairs Director Lindsey Hueer testified Friday in the House Appropriations Committee.

Making national news: AWB was quoted in an Associated Press story about Washington and Oregon state lawmakers’ attempts to pass unemployment benefits for striking workers.

Economic driver: Washington’s short-term rentals pump about $4.7 billion into Washington’s economy and support 35,000 tourism jobs across the state, according to a new study from AWB and economic consultant Community Attributes Inc. The study also found:

• In 2024, short-term rentals (STRs) generated $300 million in state and local revenues.

• STRs translated to $521 million in visitor spending in areas such as small towns and rural communities that that would not likely have seen that business without STRs.

Why it matters: The report underscores the significant economic impact of short-term rentals as the Legislature debates a proposal to increase taxes on STRs.

“As the Legislature considers new taxes against short-term rentals, we urge them to consider the potential economic consequences of increasing the cost to travel in Washington and the billions of dollars in economic activity that could be impacted,” said Morgan Irwin, AWB’s interim vice president for government affairs.

Go deeper: Read the full study.

AWB’s Budget Smarter campaign continued last week with full-page ads in The Seattle Times and the KING 5 and KOMO News websites. The campaign features five small business owners who are urging legislators to make wiser spending decisions and not raise taxes.

“There are always things you can spend money on,” Motors & Controls Corp. CEO Kyra Castle said in a full-page newspaper ad. “That doesn’t mean you should.”

In the news: Another business owner featured in the campaign, Amelia Cook of Goodwinds Composites, shared her perspective in a media briefing hosted by AWB and other business organizations.

"I really worry about the proposed taxes in the Washington House and Senate budgets, for a small business it sometimes feels like a death by a thousand cuts," Cook said.

“We need lawmakers to be champions for the economy, not champions for the largest tax increase in state history,” added AWB President Kris Johnson, who also wrote about the campaign in his latest monthly newspaper column.

Learn more: Hear from other employers in the campaign.

HOUSING

Morgan Irwin, AWB’s lead on land use and housing, is engaging with the following bills:

• Transit-oriented development: On Friday, AWB testified in opposition to House Bill 1491 in a hearing in the Senate Ways & Means Committee. AWB supports building denser housing near mass transit, but has concerns about the way this bill would be implemented. The current bill still includes affordability requirements that would discourage and likely hamper new housing construction. AWB also fought for a multifamily tax exemption to be included; unfortunately, the language adopted lacks clarity.

• Short-term rental tax: Senate Bill 5576 would allow cities and counties to impose a 4% short-term rental tax to fund affordable housing. AWB opposes this bill because it could potentially impact billions of dollars in economic activity. The bill was scheduled for a vote in the House Appropriations Committee this afternoon.

• Rent control: AWB also testified on Friday against House Bill 1217, which would impose a 7% annual cap on rent increases, among other requirements. We remain opposed to any bill that includes a rent cap. Learn more.

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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: AWB testified on Friday against Senate Bill 5041, which would allow striking workers to collect unemployment insurance benefits. AWB testified about the bill’s potential fiscal impacts and increased costs for employers. The bill was up for a vote this afternoon in the House Appropriations Committee; it is expected to move to the House floor for a full chamber vote.

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ENVIRONMENT

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

• Environmental crimes: AWB remains concerned that Senate Bill 5360 creates an uncertain legal environment for workers who might be held liable for environmental violations. As written, a worker could face a felony charge under SB 5360. AWB has reviewed the most recent version of the bill; while there have been a few minor changes, they are nowhere near enough to address our core concerns. AWB remains opposed to SB 5360.

Microsoft celebrates 50 years

From Albuquerque to Redmond, from BASIC and Windows to quantum computing and AI, it’s been a whirlwind half-century for the company that brought the personal computer into every home.

Microsoft celebrated its golden anniversary on Friday by continuing to look at inventing the future — it held a live webinar with the latest on its AI-powered personal assistant, Copilot.

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Comment on proposed changes to water quality permit fees

The state Department of Ecology is seeking feedback on proposed changes to water quality permit fees. The proposed changes include new options for smaller operations in some fee categories, so they can pay a fee that is better aligned with the cost to administer their permit.

The agency is accepting public comments on the proposed fee updates through May 20.

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Webinar on Tuesday: Practical Advice Regarding Tariffs

Experts from the law firm of Barnes & Thornburg will offer a timely, no-cost webinar at 7 a.m. Pacific time Tuesday to share what manufacturers can and should be doing now to help navigate tariffs.

The legal experts at Barnes & Thornburg’s international trade group will discuss the current state of tariffs, along with supply chain mapping and care, risk assessment, import compliance, tariff mitigation strategies, tariff-saving possibilities, contract review updates and more.

Learn more and register here.

Navigating uncertain times: AWB’s Spring Meeting will feature a thoughtful discussion on how federal policy changes — including tariffs — are impacting Washington businesses in sectors from manufacturing to agriculture.

In the Federal Issues’ Impacts panel, hear from two former members of Congress and Washington business owners, including:

• Former U.S. Rep. Rodney Davis, R-Illinois, now the head of government affairs for the U.S. Chamber of Commerce,

• Former U.S. Rep. Jaime Herrera Beutler, principal, Columbia Strategies,

• Amelia Cook, owner, Goodwinds Composites, a Mount Vernon manufacturer of carbon fiber rods/tubes and other composites,

• Nathaniel Dick, vice president, TigerStop LLC, a Vancouver manufacturer of automated saws and positioning equipment,

• Alex McGregor, chairman, The McGregor Company, a Colfax-based agronomic retailer, serving farmers in the Pacific Northwest, and

• Steve Bunin (moderator), former ESPN news anchor and owner of Executive Communications.

There’s more: The Spring Meeting on May 14 will also featuring engaging sessions on the economy, Columbia River I-5 bridge and tolling, and the 2025 legislative session. See the full agenda.

Networking time: Connect with fellow attendees at the evening reception at the Hotel Indigo on the downtown Vancouver waterfront. Enjoy a special wine tasting experience from Barnard Griffin and enter to win a raffle for airline tickets.

Stay close: There’s limited space available in AWB’s room blocks at the Hilton and Hotel Indigo. Book now before room blocks close April 13.

Time to shine: Help AWB recognize the top businesses in Washington — including yours! Nominate now for AWB’s annual slate of 11 awards, presented at our gala Evening of Excellence this 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.

🏆 Awards spotlight: The Leading Environmental Practices Award recognizes a Washington state business that has put a priority on environmental improvement, education or outreach to their business sector and/or community.

• Last year’s winner, Ash Grove Cement of Seattle, developed a comprehensive energy management program to improve energy efficiency, invested in new equipment to reduce emissions and water use, while supporting local nonprofits.

Get featured on the bus tour: If you’d like AWB to visit your business on the next Manufacturing Week bus tour, the best way to be considered is to submit a nomination for one of our Manufacturing Excellence Awards.

📣Webinar coming soon: Join the AWB Institute and State Board for Community and Technical Colleges on April 16 to explore ways to connect students with work-based learning while building your future workforce.

Details: The one-hour webinar, called Connecting Students to Careers, will be held via Zoom at 11 a.m. on Wednesday, April 16. (Zoom link will be provided after registration.) It 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.

“We need to avoid overcommitting on new investments. Given our budget realities, this is not the time for major investments in any program, no matter how worthwhile.” ~ Gov. Bob Ferguson in a press conference last Monday. Employers in AWB’s Budget Smarter campaign are are also calling for fiscal restraint, like Motors & Controls CEO Kyra Castle, who said, “There are always things you can spend money on. That doesn’t mean you should.”

Nominations are open for AWB's 2025 slate of awards, including the Washington Veterans and Families Award. Learn more and nominate here.