Lawmakers in Olympia Look for Ways to Help Businesses During Pandemic

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Washington legislators have introduced a number of bills aimed at providing additional relief for businesses impacted by the COVID-19 pandemic over the last few weeks.

Without a special session last year, it's an opportunity that legislators have anxiously awaited. Meanwhile, the impact of COVID-19 on businesses has grown as the state has gone through various restrictions and closures over the course of the pandemic.

Local and state grant programs, along with federal loan programs, have helped some businesses scrape by, but others have closed for good.

Lawmakers have introduced bills that address relief in several ways, including speeding up its ability to resume or scale up operations to providing tax relief.

Here's an overview of business relief and aid that state legislators are looking at during this session.

Push to reopen

Jonathan Smith, executive director of the Yakima County Development Association, said there's one clear priority for many of the businesses he's worked with in the last few months.

"The No. 1 thing that (businesses are) wanting is just to be able to open at some level and get down the path toward operating business as normal," Smith said.

Perhaps it's not surprising that Senate Bill 5114 and companion House Bill 1324 have generated so much support. They propose to move all regions to Phase 2 of the state's new reopening plan, called "Roadmap to Recovery." Phase 2 allows for additional business activity, including indoor dining.

Another advocate for the bill is Verlynn Best, president of the Greater Yakima Chamber of Commerce, who has felt that restrictions have disproportionally impacted individual businesses.

"It levels the playing field for all businesses," she said about SB5114.

The Senate bill had a hearing before the State Government and Elections committee on Jan. 20, with hundreds of people signing up indicating support.

Last week, Gov. Jay Inslee modified the reopening plan so that any region that meets at least three of four criteria related to cases, hospitalization and testing can to move to Phase 2. As a result, the Puget Sound and west regions can move up to Phase 2 on Monday. Those regions include King, Pierce, Thurston, Grays Harbor, Lewis, Snohomish and Pacific counties.

The south central region, which includes Yakima County, met two of the criteria, which means it remains in Phase 1 for at least another two weeks under the new rules.

Aid packages

Democrats and Republicans have both proposed multi-billion dollar state COVID-19 relief packages.

Democrats introduced a $2.2 billion COVID-19 package on Jan. 22. The package, funded primarily through federal stimulus dollars, includes $240 million in grants for more than 12,000 businesses.

The package also includes separate legislation that would provide tax relief on unemployment insurance, waive liquor license fees for distressed businesses, and exempt B&O taxes on anything funded by federal Paycheck Protection Program loans.

House Bill 1368, which addressed the appropriations for the package, went through a public hearing with the House Committee on Appropriations on Wednesday.

Earlier, Republican Rep. Drew Stokesbary proposed a more than $4 billion package called the REAL Recovery for Washington Act. The package combines funding from federal stimulus dollars as well as the state's rainy-day fund. For businesses, specifically, the package offers $250 million for small business grants of up to $75,000, $500 million toward unemployment insurance tax relief, and $84 million to fund a temporary business and occupational tax relief for businesses hardest hit by mandatory closures, including restaurants and hotels.

Stokesbary's proposal, outlined in House Bill 1334, has had a first reading and was passed on to the House Committee on Appropriations Wednesday.

Smith, of the Yakima County Development Association, said any additional relief would provide businesses much-needed reprieve until they can operate as usual.

"That's not a substitute for operating a business, but better than nothing for sure," he said.

Meanwhile, several Washington hospitality and tourism organizations are pushing for a $12 million appropriation for a recovery program. In their proposal, the organizations anticipate that it will take three to five years for the industry to fully recover. The proposed program would be administered by the Washington Tourism Alliance, which has handled state tourism funding for the last several years. Recovery program fund uses would include money for regional, national and international marketing, the funding of destination development programs for rural and underserved communities, and a tourism management program.

"The tourism and hospitality industry has been the hardest hit by the pandemic," said John Cooper, president and CEO of Yakima Valley Tourism. "For the industry to recover and be competitive with other states, Washington needs to support more tourism efforts. At currently $1.5 million per year, we are far below what other states are doing to bring visitors."

Other proposals to watch

Several bills are also on the table to relieve the tax burden for businesses, especially related to grants and loans, such as the Paycheck Protection Program and local business grants.

The bill furthest along, House Bill 1095, passed the House unanimously on Jan. 22 and is now in the Senate.

That measure provides exemptions on business and occupation, utility and sales taxes on any purchase or services paid for by grants issued as part of COVID-19 relief.

Smith said it makes sense that the state would not tax products and services paid with COVID-19 grants, mirroring the move by federal officials, who not only opted not to tax the funds but also allow businesses to deduct expenses that were paid through grants.

"To have the state do the same falls in line with the congressional intent of that money," he said. "It's not taxable to any degree at the federal level."

Best said she supports any tax relief as well as any legislation that would relieve regulatory burdens.

However, Best said she was concerned about other bills that would raise taxes and add to businesses and business owners' financial strain. There are bills introduced for a 9% income tax on capital gains, a statewide soda tax and the creation of a wealth tax.

Best notes that recent state forecasts show revenues continuing to grow at 7% between the 2019-21 biennium and the 2021-23 biennium. That shows the state should not need to balance the budget with new tax revenue and allows flexibility to aid businesses hurting instead, she said.

"To increase taxes or regulations does nothing but give the final pull of the rug," she said.

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