Inside Washington Retail : Latest News
IN THIS ISSUE
- Inslee confident of pandemic recovery
- How would you like to pay an additional 9% on your retirement?
- WR expresses concern with unemployment insurance benefit bill
- Olympia’s Drees perseveres after more than 90 years
- WR weighs in on bag ban delay
- A focus on training can reap rewards
- State relies heavily on businesses for revenue
- Another pandemic effect shows up on your bathroom scale
- Safety tip: have a business recovery plan
Inslee confident of pandemic recovery
With strong Democrat support, Republicans want a partnership in the recovery plan
Renée Sunde, President & CEO
In his third inaugural address on Wednesday, Governor Jay Inslee said he is confident that Washingtonians will remain resilient enough to overcome the COVID-19 pandemic.
In a brief address, Inslee said he was committed to focusing on racial injustice, returning people to work as soon as possible and advancing his climate change initiatives through the 2021 remote session of the state Legislature.
“We will go forward because we are resilient,” Inslee said. “We should embrace what we’ve learned together (from the pandemic).”
The Democrat Inslee begins his third term in office with a Democrat majority in the state Senate and House of Representatives.
In a response from minority Republicans, Representative Drew Stokesbary said working families cannot afford the cost of proposed taxes that Inslee favors and maintained that Inslee has left legislators out of his pandemic recovery plan.
Proposals such as a capital gains tax and environmental regulations would increase the prices of gasoline and home heating fuels and slow the state’s economic recovery while driving jobs out of the state, Stokesbary said.
He also said bills to curb the Governor’s emergency powers during the pandemic are needed because Inslee has chosen not to include enough legislators in his recovery strategy.
“We elect a citizen Legislature, not a king,” Stokesbary said. He added that the Governor’s pandemic recovery plan to date is insufficient.
Increasing state revenues make tax increases unnecessary while the Legislature should expand grants to struggling businesses, approve a tax rebate for families and significantly speed the administration of coronavirus vaccines to reopen more businesses faster and speed the return of workers to their jobs and students to the classroom, Stokesbary said.
How would you like to pay an additional 9% on your retirement?
Mark Johnson, Senior VP of Policy & Government Affairs
Senate Bill 5096 seeks to adopt a 9% capital gains tax in Washington State. The bill is scheduled for a hearing at 4 p.m. today in the Senate Ways and Means Committee. I am planning to participate to express our opposition to the legislation.
Why would WR oppose a bill for the state to collect a 9% tax on a citizen’s capital gains?
Because in many cases, those who would be taxed are small business owners who worked for years to survive in hopes of selling the business to pay for their retirement. We think it’s wrong for the state to tax someone’s retirement plan.
For years, a small business would have paid a Business and Occupation tax, property tax, payroll tax, unemployment insurance tax, Workers’ Compensation tax and in many cases collected and submitted sales taxes to the state.
On top of proposing a capital gains tax, our state already collects an Estate Tax. If the Governor and Legislature want to get after the wealthy in our state, a capital gains tax is not the way to do it. This bill will only hurt our small business owners who might have spent years serving our communities in hopes of one day enjoying a well-deserved retirement by selling their business.
SB 5096 is the wrong direction to go. We ask legislators to vote “no” on this legislation.
WR expresses concern with unemployment insurance benefit bill
Washington Retail has testified with concerns on the unemployment insurance benefit bill, SB 5061, that holds average premiums at 2020 levels for one year but raises the average of monthly premiums by 116% over four years.
The means to provide benefits to unemployed workers are far too burdensome on employers, WR believes. The association is instead proposing alternative ways to ease the burden on employers while still allowing benefits to flow to needy workers.
The current state unemployment fund has a $1.8 billion balance from which to pay benefits after record levels of claims that resulted from the coronavirus pandemic in 2020.
The bill relies on the state taking a two-year federal loan of approximately $418 million. Unfortunately, if it is passed:
- Employers would remain responsible for COVID-related benefit costs forced by mandated closures of businesses during the pandemic.
- Employers would remain responsible for replenishing funds lost to organized theft from the UI trust fund .
- Employers would be responsible for repaying the proposed federal loan, possibly including interest charges.
- Employers would have to pay any proposed benefit increases this year.
The UI system is working well and performing admirably despite the crisis created by COVID related unemployment. What is needed is a short term, perhaps one-year, fix:
- Allow funds to be transferred into the UI Trust Fund from state reserves if the fund reaches certain trigger points.
- Further reopening businesses to allow more people to return to work. Over time the state can re-pay the state’s trust fund while avoiding penalties or costs associated with a federal loan.
- Extend the time to replenish the trust fund by holding employers who were mandated to close harmless from COVID-related benefits.
- Adjusting the social tax rate by eliminating COVID-related costs.
The weekly performance of the UI Trust Fund clearly shows that the number one priority is to get people working again. The fund might need a very short-term bridge to accommodate needed relief from COVID expenses, but it will replenish itself as people quit taking benefits and return to work.
Olympia’s Drees perseveres after more than 90 years
For owner Ruthann Goularte, owner of downtown Olympia’s Drees store, the Christmas holiday was “a very sweet season both psychologically and financially.”
Earlier in the year, coronavirus pandemic protocols had closed the quality home décor and accessories store that is one of the oldest independent retailers operating in the nation. The store has been downtown since 1929.
Goularte, the store’s third owner with her husband David, weathered the first half of the year with trepidation because of a mandated closure meant to curb the spread of the COVID-19 virus. But as retailers gradually were allowed to reopen, her generations of loyal customers did not forget Drees.
Customers came streaming back and helped Goularte realize a much-needed robust gain in fourth-quarter sales.
Goularte and her staff insist on creating positive customer experiences. Over the years, Goularte’s commitment to customer service has helped Drees earn a regional appeal as well as within the Olympia area.
“We do take care of people, we love what we do,” she said. “We strive to create a very positive experience.”
Goularte was recently elected as a member of the Washington Retail Board of Directors. “I’m a newbie,” she quipped.
But at the store, customers remembered and rewarded Goularte’s 45 years of ownership and commitment to quality merchandise and customer service in perhaps her toughest year in business. It was a heartfelt sign of her customers’ appreciation and loyalty as they helped Goularte save a very challenging year for business.
“People were so appreciative of the fact we were here for Christmas with our Holiday décor and spirit,” she said. “And we were equally appreciative of their support.”
WR weighs in on bag ban delay
In a recent Yakima Herald-Republic story, Senior VP of Policy & Government Affairs Mark Johnson explained WR’s support of HB 1053 to delay a proposed ban on plastic shopping bags.
Members of the House Committee on Environment & Energy discussed the bill earlier this week.
So far, Governor Inslee has delayed the start of the ban from January 1 to January 31. The bill sponsored by Rep. Strom Peterson (D-Edmonds) delays the ban until July 1, 2021 and would allow Inslee to request an extension through January 1, 2022 with at least 45 days' notice.
Retailers challenged by the COVID-19 pandemic for numerous unrelated reasons were encountering delays in securing replacement bags as required by the proposed ban.
“To delay it until July 1, we think that is a much more doable goal,” Johnson told the newspaper. “We’re fully in support of the bill, and we’re hoping the Legislature will pick it up, run with it very early and approve it quickly.”
Johnson also noted that the bill would provide a consistent standard for bag use across the state by replacing a patchwork of 39 differing bans approved in various local jurisdictions. Stores have a full year to clear their inventories of purchased plastic bags as long as they’re not under a local plastic bag ban.
A focus on training can reap rewards
Retail consultant Bob Phibbs’ latest blog suggests that effective employee training can help retailers enjoy a better financial 2021 than the results of struggling through the 2020 pandemic.
Phlbbs writes that consulting advice on sales techniques found on the internet is far from the best way to learn how to work in a retail store.
Instead, Phibbs stresses roleplaying with management and employees. This allows employees to recreate sales experiences with different types of imaginary customers to learn how to achieve engagement and increase sales.
He further cites research findings:
- Companies that invest in the experience of their employees are four times more profitable than those that don’t.
- Companies that are remarkable at customer experiences have 1.5 times more engaged employees.
State relies heavily on businesses for revenue
Washington State ranks at or above the average of other states in business taxes, according to a new Washington Research Council policy brief.
In fiscal year 2019, businesses paid almost half of all state and local taxes, the brief reports. In that year, Washington ranked at or above other states in taxes per employee in annual business tax revenue growth, taxes per employee, business taxes as a share of economic activity and the share of total state and local revenue paid by business.
The report is timely because the Legislature is considering several tax proposals in the 2021 session. Washington Retail is urging restraint on adding new costs because the COVID-19 pandemic including related forced business closures have driven the economy into recession and record unemployment. New taxes would only threaten further economic decline and hardships on companies and employees.
The report shows that Washington businesses paid $23.1 billion in state and local taxes, an increase of 6.6% from fiscal year 2018. The average growth rate across the 50 states was 5.7%. Washington’s state and local business tax revenue grew at the 18th fastest rate in the country.
Another pandemic effect shows up on your bathroom scale
More than half of consumers who answered a recent Pitney Bowes poll saw their weight change noticeably during the COVID-19 pandemic.
Thirty-eight percent who spent more time on the couch said they gained weight while 25% who found time to sweat on long runs with kettlebells in tow said they’ve lost weight. Another 25%, weight-change deniers, said they were holding out from buying new clothes because they don’t want to accept that their weight had changed.
Those fluctuations in pounds also have influenced shopping habits.
Other findings:
- 32% are splurging on a healthier diet (nutritional supplements, food subscriptions, etc.)
- 27% are buying more cooking supplies (utensils, cookware, etc.) to justify cooking food at home.
- 21% are spending more on fitness supplies (activewear; athletic footwear, exercise/sports supplies/equipment, etc.)
Safety tip: have a business recovery plan
You can add pandemic to the long list of reasons your business should have a continuity or recovery plan.
The Federal Emergency Management Agency estimates that between 35% and 75% of businesses do not have a business continuity plan to withstand interruptions from extreme weather, fires, power outages, computer failure, data security breaches and other such disasters. Of those that have such plans, FEMA estimates that one in five spend no time maintaining or adjusting their plans.
The pandemic with all the related safety protocols including mandated closures also is a threat to the livelihood of any business.
Don’t wait until trouble happens. Be proactive and start to research options of how you would be able to get back up and running as quickly as possible. Here are links provided by Washington Retail to more information:
- WA Emergency Management - business preparedness forms and checklists
- RS SafetyTV - videos on business continuity
- RS Safety Library – other related information
- RS webinar – where to start.
Magento Commerce also is offering visitors a free checklist of considerations to include in your business recovery plan. It covers a list of essential considerations including identifying threats to your business, understanding the potential impacts, creating a recovery plan, establishing response teams and processes for distributing the plan including electronically to all of your employees to ensure a coordinated response.
Rick Means is Washington Retail’s Director of Safety and Education who is available to help members draw up safety plans and to share ideas for safety meetings. Rick can be reached at 360-200-6454 or rmeans@waretailservices.com
WR diversity statement
WR is committed to the principles of justice, equity, diversity and inclusion. We strive to create a safe, welcoming environment in which these principles can thrive.
We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality or disability and that is the foundation of our commitment to those we serve.
Washington Retail Staff
Renée Sunde
President/CEO
360.200.6450
Rose Gundersen
VP of Operations & Retail Services
360.200.6452
Mark Johnson
Senior VP of Policy,
Government Affairs
360.943.0667
Jim Szymanski
Director of Communications
360.753.8742
Washington Retail Association | 618 Quince St SE, PO Box 2227, Olympia, WA 98501
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