The health of Washington state’s manufacturing sector is a bellwether for the strength of our overall economy, and a key driver of economic opportunity for families in every city and small town across the state.
We were reminded of that last fall when the Association of Washington Business (AWB) embarked on its first-ever Manufacturing Week tour. AWB staff along with legislators, chamber leaders and others crisscrossed the state for six days, visiting nearly 70 manufacturing operations in two custom-wrapped buses, including several in the Tri-Cities area.
One key takeaway from the tour was a deeper appreciation of the diversity of Washington’s manufacturing sector — from top-of-the-line woolen textiles to the world’s largest hydraulic lifts manufactured locally. A strong and diversified manufacturing sector supports retail, professional services, educational institutions, and government employment.
When the manufacturing sector is strong, it improves the health of the entire business ecosystem across all industry sectors. And, the jobs in the sector support families with livable wages and benefits and they grow our local economy and tax base to ensure funding for critical services.
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But, Washington manufacturers need support.
Since 2000, Washington has lost more than 50,000 manufacturing jobs, the majority of which are not in the aerospace sector.
Lawmakers rightly recognized the need to rebuild the manufacturing job base last year when they passed a bipartisan measure with overwhelming support to lower the business and occupation (B&O) tax rate for manufacturers, making the tax rate uniform across the state. Unfortunately, the tax relief was removed from the final budget before it could take effect.
The good news is lawmakers are currently considering bills that would reinstate the uniform B&O tax relief, a move that would jump-start job creation in every part of the state.
House Bill 2992, sponsored by Reps. Mike Chapman, D-Port Angeles, Jacquelin Maycumber, R-Republic and Dick Muri, R-Steilacoom, is a good start to the conversation on how to reverse the trend of manufacturing job losses. Unfortunately, the bill narrows the tax relief to apply to manufacturing operations in just 30 of the state’s 39 counties.
It excludes nine counties, including Benton and Spokane counties in Eastern Washington. Here in the Tri-Cities, we know we’re one region, so it makes sense to include all manufacturers, no matter their location.
A small change to the bill to make the reduced B&O tax rate apply statewide would send a positive signal of tax certainty to manufacturers across Washington as well as demonstrate an understanding that the entire sector needs room for more investment in their operations, regardless of where the business happens to be based.
The bill, with the small change, would help roughly 12,500 small- and medium-sized manufacturers in Washington invest in their employees and create jobs. That rising tide would lift all boats.
As a voice of business and economic development in the Tri-Cities, we are invested in local projects, like the successful Economic Gardening Pilot Program, but we are equally invested in supporting policies at the state level like the manufacturing tax relief that create economic opportunity across all sectors and in every community.
With less than one week left in the 2018 legislative session time is running short to pass this tax relief. However, it’s not too late to reach out to legislators in your district and explain what tax relief would mean for your business, your employees and your communities.
Lori Mattson is the president and CEO of the Tri-City Regional Chamber of Commerce.