Rossi scores major victory for small business in new budget

45th District lawmaker: ‘I couldn’t get a single vote for the largest tax package in state history, but we won broad bipartisan support for a manufacturing B&O tax cut’

Two months ago Sammamish Republican Sen. Dino Rossi helped to reboot the Legislature’s budget debate by proving that not a single senator, Republican or Democrat, would vote for the record package of tax hikes being proposed by Democrat leaders in the House.

On Friday, Rossi celebrated the bipartisan passage of a 2017-19 state operating budget that fully funds basic education, protects the state’s social-safety net, makes major investments in services for people with mental illness, and offers new support for seniors and those who care for them. There are also gains in health care and public safety, and $50 million to extend state need grants for college-bound students.

“We accomplished a heck of a lot without turning to the kitchen sink of tax hikes Democrats proposed,” said Rossi. “The House originally wanted a permanent 20-percent tax hike on most businesses. In the end, not only did we stop a massive small business-tax increase, we actually reduced tax rates for our manufacturing employers, bringing their rate down to match the rate extended to Boeing and other aerospace companies several years ago.

“I couldn’t get a single vote for the largest tax package in state history – not even one from Seattle – but we got broad bipartisan support for a manufacturing B-and-O tax cut,” Rossi noted.

Substitute Senate Bill 5977, introduced by Rossi and passed as part of the final budget agreement, amounts to a $15.7 million tax cut ($97 million over four years). The measure includes new or expanded tax preferences that are mostly directed toward job creation in rural communities. The bill passed the Senate 33 to 16, and the House 83 to 10.

For non-aerospace manufacturing businesses, the move to match the aerospace tax rate is equal to a 40-percent reduction in business-and-occupation taxes.

“In the Seattle-Everett metro area, the unemployment rate is at 3.3 percent, but the rest of the state has not fared as well,” said Rossi. “By leveling the playing field for all manufacturers, we are offering employers in other parts of the state the same opportunity as Boeing to invest, be profitable and create new jobs.”

Rossi, who serves as a vice chair of the budget-writing Senate Ways and Means committee, pointed out that budget writers had nearly $3 billion more to allocate in the new budget than they did two years ago, due to natural revenue growth stemming from stable tax rates and a stronger economy. That allowed the Senate majority to successfully oppose unnecessary new taxes that have been high on the agendas of Democrat leaders in the House, and the governor: a capital-gains income tax, a 20-percent jump in taxes on most employers, a carbon tax and a change in real-estate taxes.

The budget approved on Friday also includes new state-employee collective-bargaining agreements, which provide three pay raises over two years. Rossi successfully fought for policy changes that will allow for more review and consultation the next time new contracts are negotiated.

“We must bring transparency and legislative oversight to the collective bargaining process,” said Rossi. “The reforms adopted this year are a significant step in the right direction toward achieving that goal.”