OLYMPIA - Lawmakers were pressed Monday to quickly act on two bills that Gov. Chris Gregoire’s office says will save hundreds of millions of dollars for businesses and help spur the state's economy.
But labor organizations are opposing parts of the bills, saying it doesn’t help alleviate the financial crunch families without jobs have. Business organizations, in contrast, showed cautious support for the proposal.
The two proposed bills do a few things to the state’s unemployment insurance:
• They temporarily cap growth of unemployment insurance taxes.
• They authorize the state to continue paying federally funded extended unemployment benefits.
• They change deadlines in a state worker retraining program to qualify for a one-time $98 million federal grant. Changes would help retrain an additional 1,900 to 2,000 people.
Employment Security Commissioner Paul Trause said the tax cut is estimated to save businesses $300 million in the next year. About 90 percent of businesses in the state would see reduced taxes, he said.
But to get this money, the Legislature needs to approve the bill by Feb. 8, he said, adding that taxes for the first quarter are due in April and the state and businesses need time to recalculate rates and payroll systems in order to get the savings.
Trause said that extended benefits are triggered on and off by specific unemployment conditions. He said current triggers would keep Washington from accessing federal money, affecting about 35,000 people who currently receive benefits and another 34,000 who would be eligible. That change is worth about $250 million in federal money.
“Taken together, these two governor-request bills provide a jump-start for the economy,” said Peter Bogdanoff of the governor’s office at the Senate Labor & Commerce Committee hearing.
Bogdanoff said 35 states have bankrupt unemployment insurance funds, but that Washington has a healthy fund that can withstand the tax cut.
But several labor representatives who spoke Monday opposed a full tax cut for businesses.
Rebecca Johnson of the Washington State Labor Council said the state should do tax cuts and tap the unemployment insurance fund to give cash assistance to families. The Labor Council and other similar organizations are lobbying for a $15-a-week per-child assistance for families that have unemployment.
“We see it as one package; we support making administrative change to remain on federal extended benefits, but any discussion of tax relief must recognize (that) families are hurting,” Johnson said.
Nancy Hiteshue of Washington Roundtable, a business industry group, said there’s support for capping taxes. But because of a concern that businesses would end up paying higher rates later on, support is “tenuous” for the state’s attempt to land the $98 million federal grant for worker retraining.
“It will make a real difference to businesses as they try to rehire as they come out of recession,” she said.
The bills would have to be approved out of committee, voted on the floor, then go through the same process in the opposite chamber in order to be approved by the Legislature – something Trause acknowledged would be difficult to do in a few weeks.
“We need to do something to protect employers by delivering needed relief now,” said Sen. Janea Holmquist Newbry, R-Moses Lake.