By Kris Johnson

Main Street businesses bore the brunt of the 2019 Washington legislative session.

The $52.8 billion

operating budget lawmakers approved in April included more than $1 billion in

tax increases. Many of the increases hit small and medium-sized employers in

the form of real estate excise taxes and a business and occupation, or B&O,

surcharge on service businesses.

The higher taxes came

despite $5.6 billion in new revenue coming into the state’s coffers as a result

of the growing economy. They raise serious questions about the long-term

sustainability of Washington’s budget.

The final budget

amounted to an 18.3 percent growth in spending, one of the highest growth rates

in decades.

How much longer can

Washington afford to continue on this path? This is one of the primary

questions facing lawmakers as they begin the 2020 session on Jan. 13.

There are other

important questions facing lawmakers this session, including how to address the

shortfall in the transportation budget created by passage of Initiative 976 in

November.

Overnight, the

initiative’s passage guaranteed that transportation funding would be a focus —

if not the focus — of the 60-day session.

I-976 removed an

estimated $3.5 billion in state transportation funding revenue over the next 10

years, including $478 million from this year’s budget.

Instead of

considering whether to move forward with a new transportation funding package

this year, lawmakers are plugging holes.

Passage of the

initiative changed how policymakers look at transportation funding in

Washington state, but one thing that has not changed is the need to invest in

Washington’s core infrastructure.

To keep the state

moving forward, we need transportation and infrastructure solutions, not only

for roads and bridges, but also for things like water, energy, ports and

broadband.

Another issue that

lawmakers will hopefully take up this year is how address the unintended

consequences created by the state’s new overtime rule.

The rule, announced

in December by the Department of Labor & Industries, will require employers

to pay salaried workers more than $83,000 by the time it’s fully implemented in

2028.

The old rule was out

of date and needed to be modernized, but the new threshold represents a huge

increase over the previous rule and will hit small businesses and nonprofits

hard, especially as they continue to absorb higher costs from the rising

minimum wage.

For organizations

that can’t afford to pay overtime, the rule could lead to a reduction in

services or program offerings.

Small businesses will

continue to face other challenges, too, including proposals limiting who can

work as an independent contractor, and proposed scheduling laws that would

restrict flexibility for both employers and employees.

And as lawmakers

continue to study Washington’s tax structure, we know debate will continue over

ideas like whether to adopt a capital gains or income tax. What’s often missing

from such debate, however, is whether the money is being spent effectively.

Citizens should feel

confident their tax dollars are being spent effectively to accomplish

measurable improvements in public health and safety and in the quality of their

communities, especially at a time when we are beginning to see signs of

cooling.

As of October, the

unemployment rate was higher in 37 of 39 counties over the previous year.

Since the Great

Recession, Washington’s budget has grown 44 percent, adjusted for inflation.

The 2020 legislative

session represents an opportunity for lawmakers to reexamine that growth and

focus on sustainable spending.

Kris Johnson is president of the Association of Washington Business, the state’s chamber of commerce and manufacturers association.