You’re invited: Legislative retail reception

You’re warmly invited to a special reception where you will have the opportunity to connect with your Washington State legislators.

Join us on Wednesday, February 4, 2026, from 5:30 p.m. to 8:00 p.m. at the Lord Mansion in Olympia. This reception offers a valuable opportunity to discuss the challenges and opportunities facing the retail industry, including navigating a rapidly changing landscape while keeping businesses thriving, employees safe, and customers engaged.

This event is designed to foster open and constructive conversation between retailers and policymakers about issues impacting retail across Washington.

Don’t miss your chance to be part of the conversation shaping the future of retail. Please RSVP by emailing kdavies@washingtonretail.org or calling (360) 790-0359.

We look forward to seeing you there.

IN THIS ISSUE

ON THE LOCAL FRONT

• Mayor Katie Wilson took the reins of Seattle City Government on January 1
• Seattle City Council selects new president
• Storefront repair fund offers help for damaged businesses

POLICY

• What we are tracking — WR Legislative Hot List
• SB 5796 and HB 2274 are critical to protect Washington retailers from Commercial Electronic Mail Act abuse
• HB 2218/SB 5847 would alter workers’ compensation medical guidance and access
• Textile EPR legislation discussions continue in Washington
• HB 2209: A targeted response to organized retail crime
• Policy updates on cash transactions and carryout bags
• Governor outlines support for proposed millionaires’ tax
• Emerging product responsibility bills in 2026
• Attorney General’s Office launches Workers Rights Unit & seeks broader investigative authority

IN THE NEWS

• WR joins NRF for its State Legislative Leadership Experience
• What retailers are watching in the new year

ECONOMY

• Supplemental budget proposal highlights fiscal approach
• Port cargo slowdown expected to continue into 2026

POLITICAL NEWS

• Governor outlines priorities and bipartisanship in State of the State
• Federal guidance outlines unemployment insurance standards during strikes

RETAIL THEFT & PUBLIC SAFETY

• Seattle drug and public safety policy shifts draw debate
• Redmond police disrupt multi-state retail theft operation
• Olympia and Redmond halt Flock safety camera use amid privacy and data-access concerns
• Cargo theft highlights supply chain security challenges for retailers

Mayor Katie Wilson took the reins of Seattle City Government on January 1

As the New Year's fireworks display began at the Space Needle, Seattle’s leadership changed hands. Mayor Katie Wilson, City Attorney Erika Evans, and Councilmember Dionne Foster assumed their new positions. 

At her ceremonial swearing-in on January 2, Mayor Wilson delivered her inaugural address, declaring that “this is your city.” In her speech, the new Mayor did not lay out a series of new programs or even commitments on issues like public safety and homelessness. Instead, she called on the people of Seattle to join her effort to make the city a better place to live and work.

Mayor Wilson was also somewhat introspective, talking about the transition she must make. 

I’m a rabble-rouser. I campaigned on affordability, on homelessness, on taxing the rich. I’ve spent my career organizing with the people who get left out of those official narratives.

But now I’m the mayor. It’s my job to channel excitement for major projects, and not just that, I have to genuinely care about them enough to exercise good judgment and make the best decisions possible for our city.

Can I do that? Can I be the mayor of the waterfront and the World Cup and the stadiums and the Seattle Center and the convention center and any other centers that we might decide to build?

Well. Good news for our city: Yes, yes, I can. I’ll do it in my own way, but yes, I can do that.

She discussed the need to build trust in her leadership and in city government by getting results.

That means listening and responding, solving problems, and getting results. That means making true, tangible progress on problems like homelessness, where progress has eluded our city for many years. That means paying attention to the details.

She closed by asking the people of Seattle to each play their own role in building a better Seattle.

With all of you is where the real power lies. And that is why I intend to govern in a way that creates space for organizers and ordinary people to do the work of pushing our city and our society forward, towards realizing our highest and best aspirations. Because I know that what I can accomplish in office will depend on what you’re able to build on the outside.

Seattle City Council selects new president

The Seattle City Council has unanimously elected Joy Hollingsworth as its new president, marking the first time a Black woman has held the role in the city’s history. Hollingsworth replaces Sara Nelson and will serve as the primary organizer of the council’s legislative work.



In remarks following the vote, Hollingsworth emphasized a collaborative approach, noting that the presidency is intended to facilitate the work of the full council rather than override it. The position is largely administrative and includes overseeing legislative staff, assigning committee roles, and determining how and when legislation moves through the council.

The vote came as the council welcomed a new member, Dionne Foster, who was sworn in this week. Foster joins Alexis Mercedes Rinck and Eddie Lin, both of whom are newer members, as part of a shifting council dynamic. With several members serving less than a full term, seniority was not a deciding factor in the leadership selection.

Alongside the leadership vote, the council announced updated committee assignments. Dan Strauss will lead Finance, Native Communities and Tribal Governments, which oversees the city budget. Bob Kettle will continue to chair Public Safety, while Rob Saka remains over Transportation. Maritza Rivera will chair Libraries, Education, and Neighborhoods. Foster will lead Housing, Arts and Civil Rights; Lin will chair Land Use and Sustainability, and Rinck will oversee Human Services, Labor and Economic Development. Hollingsworth will also chair the Governance and Utilities Committee.

Council colleagues cited Hollingsworth’s steady leadership during the city’s long-term growth planning process as a key reason for their support. Hollingsworth closed by committing to respectful engagement with all who work with the council.

Storefront repair fund offers help for damaged businesses

Seattle business owners facing property damage may be eligible for financial assistance through the Storefront Repair Fund. The program reimburses the cost of repairing eligible storefront damage, helping businesses recover from incidents that disrupt operations and customer access.

The fund provides reimbursement of up to three thousand dollars per incident, with a limit of three separate incidents per business. Multiple grants may be requested in a single application, as long as each claim is tied to a different incident that occurred on a different date. Businesses that have previously received funding may apply again if a new eligible incident occurs.

Covered repairs include damage to doors, locks, fences, gates, signs, and broken or etched windows. To qualify, the damage must have occurred on or after July 1, 2024. The program does not cover losses related to stolen merchandise or graffiti.

Applications are open through December 2026 or until available funds are exhausted. Retailers and other business owners are encouraged to review eligibility requirements and apply promptly, as funding is limited and demand may be high.

What we are tracking — WR Legislative Hot List

WR is closely monitoring the bills that have advanced through the legislative process. Each week, we’ll spotlight our weekly “hot list” key legislation that could have the most significant impact on WR members.

Commercial Electronic Mail Act (CEMA) (SB 5676/HB 2274)

Washington’s Commercial Electronic Mail Act (CEMA) is being aggressively exploited following a recent Washington Supreme Court decision (Brown v. Old Navy), which ruled that certain routine marketing email subject lines can be considered misleading. The law allows $500 per email violation, does not require proof of actual harm, and carries a four-year lookback, creating massive financial exposure for businesses.

Since the ruling, Washington has seen a sharp spike in lawsuits—many driven by out-of-state trial firms—targeting commonplace marketing language (e.g., “last chance,” “up to X% off,” holiday promotions). Each email counts as a separate violation, creating multimillion-dollar—and potentially billion-dollar—liability risks, especially for Washington-based companies or those with marketing operations in the state. Similar abuse of privacy statutes in California has resulted in over 1,500 lawsuits, underscoring the urgency.

Retailers report these cases are extremely difficult to dismiss early, forcing costly, fact-intensive litigation even when companies believe they complied with the law. This disproportionately harms mid-sized and Washington-based businesses and undermines the state’s business climate.

In response, the Washington Retail Association and partners are pursuing a legislative fix to close the loophole while preserving legitimate consumer protections. A bipartisan strategy is underway, with Senate and House sponsors identified, coalition-building across industries (retail, airlines, cruise lines), and rapid bill drafting aimed at introduction in the 2026 session. Key challenges include the short legislative session, the need for rapid lawmaker education, and anticipated resistance from trial attorneys.

In response, the Washington Retail Association and partners are pursuing a legislative fix to close the loophole while preserving legitimate consumer protections. A bipartisan strategy is underway, with Senate and House sponsors identified, coalition-building across industries (retail, airlines, cruise lines), and rapid bill drafting aimed at introduction in the 2026 session. Key challenges include the short legislative session, the need for rapid lawmaker education, and anticipated resistance from trial attorneys.

Position: WR supports this bill.

Textile EPR (HB 1420)

This bill proposes a textile Extended Producer Responsibility (EPR) program and closely mirrors California’s law, making it particularly relevant for retailers operating in both states. Sponsored by Rep. Reeves, the bill has been developed through a collaborative interim process and is expected to be introduced as a substitute bill based on stakeholder feedback. Despite these efforts, the sponsor and key legislators agree the bill is not ready this session, and WR cannot support it at this time. While there is interest in a future version that could align with California’s assessment model to reduce costs, momentum appears limited this session. 

Position: WR opposes this bill.

Immigrant Workers Protection Act (HB 2105)

Though this bill models California’s Immigrant Worker Protection Act passed in 2017, the initial bill version would greatly expand both compliance requirements and penalties well beyond California’s model, including private right of actions and high fines that are multiplied by the number of WA-based employees.

Position: WR has concerns with this bill.

ORC Sentence Enhancements (HB 2209)

Rep. Mari Leavitt (D-28) introduced a replacement Organized Retail Crime bill, building on last session’s HB 1276, adding sentencing enhancements tied to the aggregate value of stolen goods. WR has worked closely with the sponsor and stakeholders to address prior concerns and build support, including from King County. WR, alongside WFIA, Northwest Grocers, and WARCA, continues proactive education and lawmaker engagement on ORC and retail theft.

Position: WR supports this bill.

Medical Provider Network (SB 5847)

If implemented, this bill will reverse some of the Medical Provider Network reform in 2011 -- shift medical benefit management toward much greater provider discretion, increased worker access out of network, very tight Utilization Review deadlines, long-tail medical obligations, and for self-insured employers, greatly increased risk of "Good Faith and Fair Dealing" strikes over allegations of directed care.

Position: WR opposes this bill.

SB 5796 and HB 2274 are critical to protect Washington retailers from Commercial Electronic Mail Act abuse

Washington’s Commercial Electronic Mail Act (CEMA), enacted in 1998, regulates commercial email sent from a computer located in Washington or to Washington residents. For decades, the law generated minimal litigation. That changed dramatically following an April 2025 Washington Supreme Court decision.

Under current law, RCW 19.190.020 prohibits commercial emails that contain false or misleading information in the subject line. Each violation carries $500 in statutory damages, subject to treble damages totaling $1,500 per email per recipient. Plaintiffs do not need to prove actual damages; the statute of limitations is four years, and CEMA violations are treated as per se violations of the Consumer Protection Act (CPA).

In Brown v. Old Navy (April 17, 2025), the Washington Supreme Court ruled that any false or misleading information in an email subject line violates CEMA—regardless of context, materiality, or whether the recipient relied on the email. Since that decision, dozens of lawsuits have been filed targeting routine retail subject lines such as “up to” discounts, limited-time offers, and “free gift” promotions. Because liability is calculated per email per Washington recipient, even a single campaign can result in massive financial exposure.

To address these unintended consequences, lawmakers introduced SB 5796 and its House companion, HB 2274. The legislation would revise RCW 19.190.020 so that a subject line violates CEMA only if it is likely to mislead a reasonable recipient about a fact material to the transaction, and only if the subject line was material to the recipient’s decision to complete the transaction. SB 5796/HB 2274 would also remove CEMA subject-line violations as per se CPA violations, limiting remedies to CEMA’s statutory damages. Importantly, the legislation would apply both prospectively and retroactively to existing claims.

For Washington retailers, SB 5796 and HB 2274 represent a critical effort to restore balance, curb abusive litigation, and realign CEMA enforcement with traditional consumer protection standards. To learn how you can get involved, contact Crystal Leatherman, WR’s Director of Policy and Government Affairs, at cleatherman@washingtonretail.org.

HB 2218/SB 5847 would alter workers’ compensation medical guidance and access

Washington’s workers’ compensation system underwent significant reform in 2011 with the adoption of the Medical Provider Network (MPN), which aligned care for injured workers with evidence-based treatment guidelines and recognized best practices. Since then, the Department of Labor & Industries (L&I) has supported these goals through committees and programs focused on improving medical quality and return-to-work results.

During the current legislative session, lawmakers are considering HB 2218 and SB 5847, which would expand provider discretion and worker access to care.

Key provisions include allowing attending providers to depart from established treatment guidelines whenever they determine those guidelines are not medically appropriate, without additional standards or review requirements. The legislation would also restrict employers from “inducing” workers to seek care from specific medical providers, with substantial penalties for violations. These restrictions could limit employers’ ability to share information or offer modest incentives encouraging care from providers with demonstrated recovery outcomes, including those participating in the Center of Occupational Health and Education (COHE) program.

In addition, the bills would permit workers to access out-of-network providers if no in-network provider is available within 15 miles, a distance commonly traveled by many Washington residents, including those in urban areas.

The proposals were introduced without formal input from L&I, and stakeholders continue to assess how the changes may interact with existing reforms and affect system costs, care coordination, and long-term outcomes as the legislative process continues.

Textile EPR legislation discussions continue in Washington

Extended Producer Responsibility (EPR) for textiles remains an active and evolving policy discussion in Washington. HB 1420, sponsored by Rep. Kristine Reeves (D-30), was introduced during the 2025 legislative session and has returned for consideration in 2026.

During the interim, WR, along with key stakeholder groups, engaged with legislators and policy staff to help deepen understanding of the complexity of textile waste, global supply chains, and potential program design. WR appreciates Rep. Reeves’ collaborative, stakeholder-driven approach, which has helped improve the proposal and advance the conversation. However, significant concerns remain, and WR believes additional time is needed before Washington moves forward with a statewide textile EPR program.

Learning From California

California was the first state in the nation to enact a textile EPR law (SB 707). As implementation begins, the state is encountering challenges standing up the program, highlighting the complexity of textile EPR and the potential for unintended consequences. Washington has an opportunity to learn from California’s experience, both what works and where challenges have emerged, before advancing a similar framework.

HB 1420 Still Needs Work

While the changes in HB 1420 reflects meaningful stakeholder engagement, key questions remain around:

• Program feasibility and cost impacts
• Administrative complexity
• Infrastructure readiness and market capacity
• Potential impacts on consumers and small businesses

Given these unresolved issues, in addition to the time constraints of a short 60-day session, WR believes Washington should pause and learn from California’s rollout before moving ahead and do more robust stakeholder work after.

Looking Ahead

WR will continue to engage constructively on HB 1420 and appreciates Rep. Reeves’ thoughtful approach. Ongoing dialogue and real-world lessons from other states will be essential to ensuring any future textile EPR policy is workable, effective, and avoids unintended consequences.

HB 2209: A targeted response to organized retail crime  

Organized retail crime (ORC) and large-scale retail theft continue to threaten worker safety, community access, and Washington’s economy. WR is proud to support HB 2209, sponsored by Rep. Mari Leavitt (D-28), which offers a thoughtful and balanced response to this pervasive problem affecting the state.

HB 2209 reflects Rep. Leavitt’s extensive work to understand the scope and complexity of ORC. That work included direct engagement with retailers, asset protection and loss prevention experts, law enforcement, and prosecutors. As a result, the bill is grounded in real-world experience, credible data, and effective enforcement strategies, and that collaborative approach is reflected throughout the legislation.

What the Bill Does 

HB 2209 modernizes Washington’s sentencing framework to better address organized, high-dollar, and repeat retail crime, and aligning state law with national best practices. 

The bill is narrowly tailored to focus on serious criminal activity.

Key provisions include: 

• Targeted sentencing enhancements for theft, robbery, possession of stolen property, and trafficking stolen goods when losses exceed $20,000 
• Stronger tools to disrupt organized theft rings and fencing operations 
• Preservation of judicial discretion for youth offenders, balancing accountability with rehabilitation

Why This Matters for Washington

ORC is not petty theft. It is coordinated, often violent criminal activity that places retail workers at risk, increases costs for consumers, reduces access to essential goods, and undermines public safety. Unfortunately, Washington continues to be one of the leading states in the nation for retail theft rates, with billions in stolen goods and hundreds of millions in lost state tax revenue. These impacts are felt across urban, suburban, and rural communities, affecting retailers of all sizes.

By targeting organized and large-scale criminal enterprises, HB 2209 strengthens accountability while protecting workers, customers, and communities.

What’s Next 

Once HB 2209 is scheduled for a hearing, WR will engage its advocacy network and encourage supporters to sign in PRO.

Click here to sign up for WR action alerts and stay informed as the bill moves forward. 

Policy updates on cash transactions and carryout bags

Two policy areas under review this session could affect retail operations across Washington, including cash handling practices and carryout bag requirements.

HB 2334 would allow retailers to round the final total of cash purchases to the nearest five cents, reducing the need to handle pennies. The proposal responds to ongoing penny shortages and the fact that producing one-cent coins now costs more than their face value. Electronic payments would continue to be processed to the exact amount, so the change would apply only to cash transactions. Under the bill, totals ending in one, two, six, or seven cents would round down, while totals ending in three, four, eight, or nine cents would round up. The Washington Retail Association is monitoring the proposal and seeking clarification on audit compliance to ensure tax calculations remain accurate and that retailers have clear guidance related to existing consumer protection laws.

Several bills also address carryout bag policies, offering different approaches. SB 5965 and HB 2233 would ban plastic carryout bags starting January 1, 2027, and increase the paper bag fee from $0.08 to $0.20. HB 2284 proposes extending the current four-cent fee on thicker plastic bags, removing a scheduled expiration on thickness standards, and allowing compostable alternatives. SB 6030 would repeal bag thickness requirements and fees entirely, citing research from Washington State University showing a 50 percent reduction in plastic carryout bag use following the original $0.08 fee.

Except for SB 6030, these measures are scheduled for hearings in the Senate and House environment committees during the first week of the session.

Governor outlines support for proposed millionaires’ tax

Governor Bob Ferguson announced his support for a proposed millionaires’ tax during a December 23, 2025, press conference, framing it as a long-term policy change rather than a solution to the state’s immediate budget challenges. He emphasized that revenue from the tax would take several years to materialize and should be directed toward relief for working families and small businesses most affected by Washington’s tax structure.

The proposal would apply to individuals earning more than $1 million in annual income, not to net worth or asset values such as home equity. According to the governor’s office, fewer than one-half of one percent of Washington residents would be affected, and the tax could generate at least three billion dollars annually once fully implemented. Ferguson also expressed support for adjusting the income threshold over time to account for inflation.

The governor highlighted Washington’s reliance on regressive taxes, noting that lower-income households pay a higher share of their income in taxes than higher earners. He suggested potential uses of future revenue could include expanding the Working Families Tax Credit, reducing certain taxes on small businesses, increasing funding for public education, and removing sales taxes on essential goods.

Ferguson acknowledged that lawmakers will ultimately shape the details and said he looks forward to continued discussions during the legislative session.

Emerging product responsibility bills in 2026

The 2026 legislative session is only 60-days, but the Legislature still has the appetite to pass product responsibility bills. WR has been working with policymakers on the following product responsibility proposals:



• Post-Consumer Recycled Content (HB 2271) - Proposed legislation would require certain products and packaging to include minimum levels of post-consumer recycled content. These mandates are intended to stimulate demand for recycled materials and support recycling markets.

• Bottle Recycling (HB 1607/ SB 5502) - Lawmakers are expected to revisit bottle recycling legislation with the goal of increasing container recovery rates and reducing litter. The Washington proposal appears to be inspired from other states with similar laws that have gone into effect. If it were to pass, the bill would impose new obligations on producers and distributors to fund or manage recycling programs.

• Mattress recycling (HB 1901) – While four states have implemented mattress recycling programs relying on a point-of-sale fee funding model with measurable successes, our state’s proposal creates a producer responsibility structure. Producers will pay the recycling costs with extensive collection network requirements and agency oversight authorities beyond comparable programs in other states.

• Retail bags (HB 2233/SB 5965) – To reduce plastic bags given out by retailers, this proposal adds definitions to “film plastic,” “single-use plastic carryout bag,” and “third-party platform,” with other requirements and clarifications to retailers and even manufacturer/distributor or third-party platforms.

Attorney General’s Office launches Workers Rights Unit & seeks broader investigative authority

In November, Attorney General Nick Brown announced the creation of a new Workers’ Rights Unit to expand enforcement of wage theft, discrimination, worker misclassification, and other labor standards. In addition, the AGO is circulating draft legislation to broaden its investigative tools through Civil Investigative Demands (CIDs), a pre-litigation authority widely used in other states.

The proposal would extend CID authority to investigations involving prevailing wage on public works, the Washington Law Against Discrimination, select law-enforcement accountability statutes, and wage-and-hour laws such as the Minimum Wage Act and Wage Payment Act. Today, the AGO has CID-like authority only in narrower areas such as consumer protection, Medicaid fraud, and charitable trusts.

In many states, CID authority allows attorneys general to gather facts before filing a lawsuit, often resulting in investigations being resolved informally, closed without action, or corrected without litigation. This can reduce legal costs, risk exposure, and uncertainty for employers. However, the current Washington draft contains very broad document-demand and investigative authorities.

WR is working with the business community to seek guardrails around the expanded CID authority to better align with national standards that include relevance, proportionality, and undue-burden limitations. Such guardrails help ensure that the tool is effective for enforcement while also protecting respondents’ due-process rights.

A remaining question is whether these initiatives will require additional funding. Senate Ways & Means Chair Sen. June Robinson has stated publicly that no new funding is likely to move through her committee this session.

WR joins NRF for its State Legislative Leadership Experience

WR had a strong presence at NRF’s Big Show this year. WR Director of Policy and Government Affairs, Crystal Leatherman, and Interim CEO, Alesha Shemwell, attended the NRF State Legislative Leadership Experience in New York from January 9–11 on behalf of WR. For the first time, Washington state was also represented by two state legislators - Rep. Kristine Reeves (D-30) and Rep. Mari Leavitt (D-28).

The experience began with the NRF University Challenge, which brought together more than 1,000 college students to compete and share innovative ideas. Participants were impressed by the students’ enthusiasm, creativity, and passion for the retail industry. That same day, the group visited Best Buy’s Teen Tech Center, where the Washington legislators saw firsthand how retailers invest in and positively impact their communities.

Day two focused on retailer store tours. Lowe’s, Walmart, Gap/Old Navy, and Brooks Brothers hosted the first round of visits. Shemwell and Rep. Leavitt attended the Brooks Brothers tour, learning about the company’s history as the oldest retailer in the United States and discussing key legislative issues, including tariffs and organized retail crime (ORC). Leatherman and Rep. Reeves toured Gap/Old Navy, where conversations centered on the impact of tariffs on the retail industry as well as sustainability and circularity efforts.

The entire group later gathered at Macy’s flagship store on 34th Street. Macy’s leadership shared the company’s top initiatives and provided a behind-the-scenes tour of both front- and back-of-house operations, highlighting the complexities of managing high-volume brick-and-mortar retail alongside online fulfillment and logistics. These store tours, combined with a lunch with retailer CEOs, gave legislators valuable opportunities to ask questions and gain deeper insight into the retail industry.

The final day coincided with the opening of NRF’s Big Show. Participants heard from Michael Rubin, Founder and CEO of Fanatics; Sundar Pichai, CEO of Google and Alphabet; and John Furner, President and CEO of Walmart U.S. The State Legislative Leadership Experience concluded with a tour of the Big Show exhibit floor, underscoring the critical role technology will continue to play in the future of retail.

The experience was highly valuable for all who attended, and WR hopes to expand participation by welcoming more legislators in the future.

What retailers are watching in the new year

As retailers look ahead to 2026, National Retail Federation experts point to a year shaped by evolving consumer behavior, rapid technology adoption, and continued policy and economic uncertainty.

Artificial intelligence remains a central theme. Experts expect AI to further transform supply chains, marketing, customer engagement, and fraud prevention, while also introducing new governance and cybersecurity considerations. At the same time, AI is changing how consumers discover products and make purchasing decisions, influencing search, reviews, and personalization across channels.

Consumer behavior is another key focus. Spending levels have not always aligned with consumer confidence in recent years, prompting retailers to look more closely at the motivations behind purchases, including family priorities, community connection, and the search for value and enjoyment. Economic pressures, particularly for lower-income households, could test consumer resilience in the year ahead.

Sustainability and circular retail practices are expected to expand as retailers respond to consumer interest, cost pressures, and regulatory requirements. Efforts such as resale, repair, and recycling can reduce return costs, create new revenue streams, and help address product stewardship laws.

Workforce and supply chain challenges also remain prominent. Automation and demographic shifts are reshaping retail jobs, driving continued investment in training, flexibility, and compensation. At the same time, uncertainty around trade policy, tariffs, and immigration pathways may affect staffing and sourcing decisions.

Finally, retailers are watching food affordability, organized retail crime, and broader economic signals such as hiring trends and wage growth. Together, these factors suggest a complex but opportunity-rich environment as retailers adapt to serve customers and communities in 2026.

Supplemental budget proposal highlights fiscal approach

Governor Bob Ferguson has released a proposed two-year balanced supplemental budget totaling about $79 billion. The plan represents a 1.5 percent increase over previously enacted budgets and comes as the state faces a projected $2.3 billion shortfall tied to lower-than-expected revenue and critical agency requests.

The proposal addresses the gap through a mix of strategies, including roughly $800 million in spending reductions, $425 million in fund reallocations, and a $1 billion transfer from the state rainy day fund, which is projected to hold just over $2 billion for the 2025 to 27 biennium.

While the Governor states the budget does not rely on new taxes, it does repeal or modify several tax preferences. These changes include ending a sales tax exemption for replacement data center servers, adjusting the preferential tax rate for prescription drug wholesalers, and modifying how certain insurance-related taxes interact. Together, these changes would generate additional state revenue.

During the budget rollout, the Governor also reiterated support for a potential income-based tax on high earners, though it is not assumed in the current proposal. Analysis is ongoing, and stakeholders continue to review the potential impacts on the business community.

Port cargo slowdown expected to continue into 2026

A new Global Port Tracker report from the National Retail Federation and Hackett Associates indicates that declining import volumes at major United States container ports are likely to continue into 2026. Recent drops are tied to tariff impacts and uncertainty surrounding future trade policy.

Although retailers are well stocked for what is expected to be a record holiday season, NRF notes that shifting trade decisions will shape supply chain strategies in the year ahead. Some tariffs have recently been reduced, while others remain under legal review. Even if certain tariffs are overturned, analysts expect efforts to reinstate them through other authorities.

Hackett Associates reports that rising tariff pressures are already contributing to weaker cargo demand. Shipping rates on both coasts have begun to ease as import needs decline from key global markets.

Global Port Tracker data shows that October imports reached 2.07 million containers, nearly eight percent lower than a year earlier. Projections for November and December suggest even steeper year-over-year declines. The slowdown follows elevated imports in late 2024 when retailers moved goods earlier to avoid potential disruptions.

Forecasts suggest that cargo movement may see a modest month to month increase early next year, but volumes are still expected to remain below prior levels as retailers navigate evolving trade conditions.

Image: The Olympian

Governor outlines priorities and bipartisanship in State of the State

Governor Bob Ferguson delivered his first State of the State address on January 13, saying Washington remains strong despite recent challenges and pointing to community resilience following December’s historic flooding. He thanked first responders and local officials for assisting thousands of residents affected by widespread damage, describing the response as a reflection of the heart and spirit of Washingtonians.

Ferguson outlined priorities for the 60-day legislative session, including investments in infrastructure, continued efforts to address housing affordability, and changes to make the state’s tax system more fair. He reiterated support for a tax on individuals earning more than $1 million annually, with a stated goal of returning a significant share of the revenue to Washington residents. He also highlighted proposed transportation and housing investments and early results from executive orders aimed at reducing permit and license processing times and increasing completion of the FAFSA.

The governor addressed external pressures affecting the state, citing shifting federal policies at the Centers for Disease Control and Prevention and the presence of Immigration and Customs Enforcement in U.S. cities. He expressed support for bipartisan legislation that would prohibit law enforcement officers from wearing masks and require clearly displayed identifying information.

Democratic lawmakers largely applauded the address, while Republican leaders expressed concern about its tone and focus. Some Republicans objected to the governor’s remarks on ICE and federal health agencies, while also acknowledging his attention to flood recovery efforts.

Ferguson emphasized bipartisan cooperation, noting that about half of last year’s bipartisan proposals became law. He closed by urging lawmakers to shape the state’s future together, saying Washingtonians are active participants in making history.

A transcript of the address is available here. The full address can be viewed here.

Federal guidance outlines unemployment insurance standards during strikes

The US Department of Labor has issued formal guidance reaffirming federal requirements for unemployment insurance eligibility in the context of labor disputes. In a January 8 memorandum to state unemployment insurance administrators, Michelle Beebe, administrator of the Employment and Training Administration Office of Unemployment Insurance, clarified how federal law applies when states consider providing benefits to individuals engaged in a strike.

While states retain flexibility in administering their unemployment insurance programs, participation in the federal system is conditioned on compliance with core statutory requirements. Among these is the requirement that claimants be able to work, available for work, and actively seeking work for each week benefits are claimed. The Department emphasized that states may not adopt blanket exemptions from these requirements for striking workers.

The guidance explains that providing benefits to individuals who are not genuinely seeking alternative employment or who have withdrawn from the labor market may place a state out of conformity with federal law. A finding of noncompliance could jeopardize federal administrative funding for state unemployment insurance programs, as well as employer eligibility for federal unemployment tax credits.

The memorandum also addressed the limited circumstances under which union hiring hall arrangements may satisfy work search requirements. These provisions apply only when a collective bargaining agreement requires workers to seek employment exclusively through a hiring hall. The Department underscored that this exception is narrow and does not broadly apply to all union members or strike situations.

This clarification is particularly relevant as several states, including Washington and Oregon, begin implementing new laws related to unemployment benefits during strikes. Federal officials indicated they will continue to monitor state implementation to ensure alignment with federal standards.

The Department encouraged states to request technical assistance as needed and reiterated the importance of maintaining compliance to preserve the integrity and stability of the national unemployment insurance system.

Seattle drug and public safety policy shifts draw debate

Recent developments in Seattle highlight an ongoing debate over how the city should address open drug use, low-level offenses, and public safety. The Seattle Police Officers Guild has raised concerns about a directive it says discourages arrests for open drug use and instead emphasizes referrals to diversion programs such as Law Enforcement Assisted Diversion (LEAD). The guild argues this approach limits enforcement options and may worsen public safety conditions, while city leadership has not publicly detailed the full scope or intent of the directive.

At the same time, newly-elected Seattle City Attorney Erika Evans took office with a platform focused on treatment, diversion, and alternative court models. A former federal prosecutor, Evans has said she plans to prioritize public safety while shifting away from what she views as ineffective or overly punitive practices. Her agenda includes working with the courts and public defense to establish a reimagined community court that combines accountability with access to services, such as treatment and structured community service.

Evans has also reiterated her intention not to charge violations of Stay Out of Drug Areas (SODA) or Stay Out of Areas of Prostitution (SOAP) orders. While judges may still issue such orders, her office would not pursue new criminal charges solely for violating them. Supporters see this as a move away from banishment-based enforcement, while critics argue it could weaken tools used to disrupt open-air drug activity and commercial sexual exploitation.

Editorial commentary and law enforcement voices have emphasized concerns about human trafficking and neighborhood safety, particularly along Aurora Avenue North. Advocates for SOAP orders argue they help target buyers and traffickers rather than exploited individuals, while Evans has called the policies discriminatory and has urged a focus on alternative strategies.

Together, these developments reflect a broader policy shift and a continuing conversation about balancing enforcement, treatment, accountability, and community impact in Seattle.

An image of the security video from the Guitar Center robbery. (Redmond PD)

Redmond police disrupt multi-state retail theft operation

Redmond police recently arrested a 25-year-old man and a teenage girl connected to a series of thefts targeting Guitar Center locations in Washington, California, and Oregon. The arrests followed an investigation that began after a November theft at a Redmond store where two high-value guitars were taken.

According to police, security footage showed the suspects working together to conceal merchandise and leave the store without detection. The case advanced when a Guitar Center employee in another state recognized the stolen guitars listed for sale online and identified the individuals as being connected to prior incidents. Investigators believe the activity was part of an organized retail theft operation involving multiple locations.

Detectives contacted the seller through the online listing and arranged a meeting to purchase one of the guitars. When the suspects arrived, they were taken into custody. The man has since been charged with organized retail theft and trafficking stolen property.

Redmond police are encouraging retailers to remain alert to organized theft tactics, which can include working in pairs and distracting employees during theft attempts.

Olympia and Redmond halt Flock safety camera use amid privacy and data-access concerns

In Olympia and Redmond, Washington, city leaders have moved to halt the use of Flock Safety automated license plate reader (ALPR) cameras amid growing privacy and data-access concerns.

On December 3, 2025, Olympia officials suspended a two-year pilot program that began in August 2024. Interim Police Chief Shelby Parker recommended the suspension, citing the importance of community trust and the need to reassess potential risks to privacy, data access, and the city’s status as a sanctuary city. All 15 cameras have been hooded and are being deactivated while the city evaluates broader system vulnerabilities and developments at the state and federal levels.

Redmond previously paused its 24 Flock cameras after U.S. Immigration and Customs Enforcement agents arrested multiple people near camera locations. Although Police Chief Darrell Lowe said ICE never had access to Redmond’s data, city officials expressed concern that courts could later require disclosure. The council opted to keep the system disabled while seeking legal review of terminating the contract, particularly in light of a court ruling that Flock data is a public record and a University of Washington report showing federal immigration agencies accessed other cities’ ALPR data without local departments’ knowledge.

At the state level, lawmakers are also moving to establish new guardrails for ALPR use. Senator Yasmin Trudeau is advancing legislation that would set statewide standards for how long agencies may retain license plate data and how that information can be shared. The draft proposal would significantly shorten retention time and require specific safeguards around interagency access.

As local governments pause their ALPR programs and statewide policy discussions take shape, Washington is entering a pivotal conversation about how to balance effective public safety tools with privacy, transparency, and community trust. WR will continue monitoring these developments at both the state and local level.

Cargo theft highlights supply chain security challenges for retailers

WR note: This article is shared with a modified headline. The original content remains unchanged

Published in the Seattle Times 

By Megan Ulu-Lani Boyanton , Seattle Times business reporter  

Dec. 31, 2025

Costco recently found itself in a pinch after criminals allegedly stole $400,000 worth of lobster headed to its stores in Illinois and Minnesota.

Earlier this month, thieves pilfered a truck carrying lobster meat in Taunton, Mass., said Dylan Rexing, president and CEO of Rexing Companies, on Tuesday.

His business in Evansville, Ind., coordinates product shipments for manufacturing companies. In this instance, it planned the logistics to transport the lobster meat from a processor, which Rexing declined to name, to Costco through a carrier he had previously used.  

Scammers made sure that didn’t happen, he said.

According to Rexing, criminals posed as the regular carrier over email, a scamming tactic known as spoofing. Then, in order to secure the goods on Dec. 12, thieves allegedly changed the name on the side of their truck and presented a phony driver’s license.

“We believe it’s a crime organization,” Rexing said in a phone interview.

Costco didn’t respond to a request for comment.

With crustaceans in mind, thieves have been trying for the whole seafood tower.  

A load of crab was also allegedly stolen on Dec. 2 from the same facility, which Rexing said he learned from the local police department. Taunton Police Department didn’t respond to a request for comment.