LEGISLATIVE UPDATE | July 2, 2017
Governor Inslee signs budget in 11th hour averting Government shutdown.
AEROSPACE ISSUES LARGELY RESOLVED.
MANUFACTURING B&O TAX RATE COULD BE VETOED. ACTION NEEDED.
Washington state legislative leaders this week delivered an operating budget to Governor Inslee that was signed in the 11th hour, narrowly preventing a shutdown of non-essential government operations.
The budget covers the big news of satisfying McCleary, the education funding mandate that most legislation was held up against. Over the course of the next four years, the state has appropriated more than $7.3 billion.
Much of the work AFA has done over the course of the 2017 legislative session has, thus far, seen positive results. Below are details on some of these efforts.
Governor Jay Inslee speaking at AFA's 11th Annual Governor's Aerospace Summit
Paid Family Leave
Aerospace Sector Lead | Department of Commerce
Manufacturing B&O Tax Rate
One issue AFA continues to work on, and is seeking cross-industry action on, is the manufacturing B&O tax rate:
Specific to aerospace and general manufacturing across all industries, a reduced B&O tax rate for manufacturing was included in the budget. According to credible sources, however, the resetting of the rate may now be vetoed by the Governor this Friday. The proposed rate would align the B&O tax rate for manufacturers in Washington. For more information: Seattle Times
AFA encourages manufacturers and the businesses they work with to contact Governor Inslee before Friday and ask him to keep the reduced B&O tax rate provision in the budget:
Online Contact Form
Governor Jay Inslee
Office of the Governor
PO Box 40002
Olympia, WA 98504-0002
TTY/TDD users should contact the Washington Relay Service at 711 or 1-800-833-6388
Other issues important to aerospace:
On the chopping block this legislative session were sector leads funded through the Department of Commerce that work with a variety of industries, including aerospace, throughout the state. AFA actively engaged with legislators on this issue.
At its discretion, the Department of Commerce can retain sector leads, including the aerospace sector lead. This allows for continued economic development activities in support of aviation, space, UAS, and related businesses.
AFA closely monitored the Paid Family Leave legislative proposals while enlisting input from our members and providing state legislators with industry feedback. AFA saw a mix of responses from our members, some supporting and some opposing the legislation. At the heart of the legislation was the goal of implementing the act statewide in order to prevent a jurisdictional approach to the issue. Legislators sought to provide adequate and just leave provisions for employees while attempting to mitigate the impact on businesses.
After days of intense negotiations at the end of the third special session, which included emotional testimony by many legislators, a compromise Paid Family Leave bill was achieved that AFA believes is a successful compromise. For more information: King5
The House Finance Committee held a public hearing on two bills that would have significantly modified the aerospace tax incentives agreed to by the State in 2013, tying the incentives directly to employment levels at Boeing. AFA members provided critical testimony before the committee highlighting the need for incentives to remain competitive in a global market and opposing both measures. AFA vigorously opposed the bills.
Result: The bills did not make it out of the House Finance Committee.
Aerospace Tax Incentives "Clawbacks"