Big tax wins and major minimum-wage losses made for a mixed year in Washington small business.
New Year’s is often a time to reflect on months past—but how many small business owners have the time? So NFIB combed through the most significant events for Washington small businesses in 2015 to find the biggest victories and harshest downfalls of the year—and what they mean for small employers moving forward.
THE GOOD: Passage of a major anti-tax initiative
In November, Washington voters approved a ballot measure that will lead to one of two pro-business outcomes next year. Either the legislature will pass a constitutional amendment by April 15 requiring a two-thirds majority vote on all tax hikes, or they’ll have to cut the state sales tax by one percent.
An overwhelming majority of NFIB members supported the measure, with 87 percent saying Initiative 1366 should be passed into law. More than half of the state’s voters agreed (though election results haven’t yet been finalized). Supporters of the initiative said a super-majority vote would block the legislature from making reckless tax increases, and it’s likely such an amendment will pass—Washington voters have approved similar initiatives five times before.
THE BAD: Lost jobs due to Seattle’s increased minimum wage
Seattle’s short road to a $15-an-hour minimum wage began with a hike to $9.47 in January and $11 in April. Job losses so far have indicated this might not be the progressive move supporters were hoping for: Seattle lost 1,300 restaurant jobs between January and June in the largest drop since the Great Recession.
With such dramatic job losses after just an 18-percent hike, the impending 60-percent minimum-wage increase from last year’s $9.32 to $15 in 2021 doesn’t look good for Seattle small business owners, many of whom can’t afford the jump.
THE GOOD: Defeated the $12 statewide minimum-wage proposal
Sen. Michael Baumgartner helped defeat a house bill that could have cut 16,000 jobs and $7 billion in economic output by raising the hourly minimum-wage rate to $12. Unlike Seattle and Tacoma, the state’s minimum wage will remain at $9.47 next year—a big win for small employers.
THE BAD: Major gas-tax increase approved by state lawmakers
The NFIB Research Foundation predicted last year that increased gas prices resulting from Gov. Jay Inslee’s lower carbon fuel standard (LCFS) would cost the state more than 11,000 jobs over a five-year period. This year, state lawmakers approved an 11.9 cents-per-gallon gas tax increase.
“Small businesses, who are disproportionally affected by tax increases, simply can’t afford … the governor’s agenda,” NFIB/Washington State Director Patrick Connor said in March of NFIB’s campaign against fuel tax increases.
