A special session of the Washington Legislature opened November 28 for the purpose of finding some big-dollar, Christmas gift cards to plug the expected deficit in the state budget. Shortly before, the big boys, Boeing, Microsoft, and the association that represents them all, gathered under Gov. Chris Gregoire’s window to sing her lovely carols of understanding and cooperation.
“We are committed to being a partner.” “We look forward to working with the governor.” “We appreciate the tough choices she has to make.” On they sang, while feeding themselves on the roasted chestnuts of team-playing and good corporate citizenry. And harmless it all was, until one of them sounded the discordant note of the holiday season: “That means everything must be on the table—meaning reforms and revenue.”
Revenue? With all due respect for the truly difficult job you do indeed have, governor, small business will excuse itself from this table. If you’ll forgive the abrupt change of metaphors for a moment, the governor’s proposal for the special session looks more like a poker game where she is the dealer, it’s her deck of cards, she’s calling all the games, and hawking you is the casino muscle of education funding should you have the temerity to question any of her rules.
Nice that Boeing leaders could fly in from their corporate headquarters in Chicago (Wasn’t moving it from Seattle a few years back smart economics, boys?) and join with Microsoft executives to offer support for putting everything on the table (Wouldn’t it just be easier to add our state to the Gates Foundation’s list of charities?). They have the money to absorb an increase in the state’s sales tax. Struggling small businesses, the largest employer group in Washington and biggest generator of jobs, and their customers don’t.
Coincidentally, around the same time the big boys were ringing their bells around the state’s Salvation Army kettle beckoning the rest of us to donate, the National Federation of Independent Business, America’s voice of small business since 1943, released a poll on the external impediments to small-business growth, a growth without which there will not be an economic recovery for the state or nation—ever.
“The two principal impediments to current small-business growth are businesses uncertainty and weak sales,” the poll said. About the former, “The survey did not define either economic or political uncertainty; it let respondents define these terms.
But small-business owner responses clearly suggest political … government deficits and how they will be financed, future tax obligations, the impact of new regulatory requirements, pending requirements of the recent health-care overhaul, etc.”
Although the poll did not summarize it this way, small-business owners aren’t going to start hiring again until they experience the full force of hurricane Obamacare blowing off the coast and they see states like ours start to get a grip on their budgets without light-fingering their wallets yet again.
At a time when a lack of sales is one of the biggest problems facing small business, increasing the state sales tax is absolutely the wrong thing to do. State government needs to get serious about real reform by streamlining duplicative services and eliminating agencies and programs whose functions could be better performed by the private sector, such as the state-run workers’ compensation system. Similarly, tribal compacts should be renegotiated and their monopoly on electronic gaming should be eliminated.
If Big Business wants the state to spend more, it should step forward and ask that its special tax breaks and other taxpayer-funded perks be repealed. And if Big Labor really believes in ‘shared sacrifice,’ it should re-open public employee contracts and have its members start paying their fair share for health and retirement benefits.
There, governor, we may have walked away from the table, but we left a few winning chips on it that you can safely gamble on.
Patrick Connor is Washington state director for the National Federation of Independent Business.