Newsletter — April 17, 2025 | | |
POLICY
ECONOMY
ON THE LOCAL FRONT
POLITICAL
RETAIL THEFT & PUBLIC SAFETY
IN THE NEWS
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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.
B&O Surcharge on Large Corporations and Financial Institutions – B&O Tax (HB 2045)
WR opposes HB 2045 unless retailing and wholesaling are exempted, as their existing low B&O tax rates are crucial for supporting industries that operate on thin profit margins. Raising these rates could lead to job losses, reduced employee hours, increased automation, or even business closures. WR strongly advocates for preserving the current tax structure for these sectors and excluding them from the bill. Meanwhile, discussions continue in the legislature about the possibility of a broader, across-the-board increase in the B&O tax.
Position: WR opposes this bill.
Status: April 4, 2025: In House Committee on Finance waiting for a vote.
Improving public safety funding by providing resources to local governments and state and local criminal justice agencies, and authorizing a local option tax (HB 2015)
House Bill 2015 proposes a comprehensive public safety strategy, allowing local governments to raise sales taxes to fund law enforcement, courts, and treatment programs. It includes grants to hire more officers, prosecutors, defense attorneys, and diversion/treatment specialists, addressing, in particular, Washington’s low police staffing. Supported by the Washington Retail Association, the bill is seen as crucial for ensuring safe workplaces and communities. The bill passed out of the Senate Ways and Means Committee Tuesday and now goes to the entire Senate for debate and hopeful approval.
Position: WR strongly supports this bill.
Status: In Rules, second reading.
Expanding protections for workers in the state paid family and medical leave program (HB 1213)
HB 1213 would eliminate safeguards protecting against rate increases. The proposed legislation would reduce the minimum claim period from 8 to 4 hours, the waiting period from 12 months to 180 days, and phase out the small business from 50 to 8 by 2028. WR has testified that this will increase utilization and put greater pressure on raising rates on employers and employees on top of the 8% rate increase that went into effect for 2025. Our concerns are reinforced by the fiscal note that assumes use will increase and premiums collected will increase from an additional $8 million in FY26 to $337 million by FY2031. The Employment Security Department forecasts the program to have a negative balance during parts of 2025 and 2026. The bill goes back to the House for a concurrence vote. If 1213 becomes law, Washington will have the most expensive PFML program in the country.
Position: WR opposes this bill.
Status: Passed the House.
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SB 5801 moves forward as gasoline costs poised to rise—See the impact
On March 29, the Washington State Senate passed SB 5801 (31-18), which would raise the gas tax by 6 cents per gallon starting July 1, 2025, with an automatic 2% annual increase thereafter. The bill now waits for a hearing in the House Transportation Committee.
What does this mean for consumers and retailers?
Current fuel taxes and fees in Washington already total $1.21 per gallon. By 2028, cumulative state and federal fuel-related costs could reach $1.75 per gallon. That’s an increase of 54 cents per gallon—driven by the gas tax, cap-and-trade program, low carbon fuel standard (LCFS), and other state fees. These added costs will ripple through the economy—affecting everything from transportation to the price of groceries and household goods.
View the full fuel cost breakdown in the infographic provided by Affordable Fuel Washington.
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House passes unemployment insurance for striking workers
In a narrow vote, the House of Representatives passed SB 5041, which would extend unemployment insurance (UI) benefits to workers on strike, a move that challenges the fundamental purpose of the UI system. Historically, unemployment insurance is intended to support individuals who are out of work through no fault of their own and are actively seeking employment. This bill threatens that longstanding principle.
Though the House amended the bill to limit benefits to four weeks and require mediation services, these changes fall short of addressing the broader risks to employers and the integrity of the UI system. WR has cautioned lawmakers that this policy could destabilize the unemployment insurance fund and drive-up costs for businesses, school districts, and public agencies.
If enacted, Washington would become the third state to provide UI benefits to striking workers, setting a concerning precedent. This policy could encourage more frequent and prolonged strikes while undermining the very foundation of unemployment insurance. Employers already facing economic pressures may be forced to cut jobs, reduce employee hours, or pass higher costs onto consumers.
The bill now returns to the Senate, where lawmakers must decide whether to accept the House’s four-week benefit cap or push for the original Senate version, which allows up to twelve weeks of benefits.
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Packaging bill passes House – Bottle bill stalls
SB 5284, the packaging or Extended Producer Responsibility (EPR) measure, passed the House following over four hours of heated debate that continued into the early hours of Tuesday morning. The bill now returns to the Senate for concurrence with House amendments before heading to the Governor for final consideration.
SB 5284, prime-sponsored by Senator Liz Lovelett (D-40), is supported by the EPR Leadership Forum and opposed by waste and recycling haulers, among others.
Meanwhile, HB 1607, the bottle recycling or beverage container refund program, appears to have stalled, failing to gain approval from the full House. It remains unclear whether the bill will be included in budget negotiations or revisited during the interim. It was not added as an amendment to SB 5284, as some had anticipated.
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Tariff changes announced in new Executive Order
The White House has issued an Executive Order modifying U.S. tariff rates, with immediate implications for retailers and importers. Effective April 10, 2025, the “reciprocal” tariff rate has been temporarily reduced to 10%, with the suspension lasting until July 9. Goods imported between April 9–10 are subject to this adjusted rate.
However, tariffs on goods from China, including Hong Kong and Macau, have been significantly increased to 125% as of April 10.
The Executive Order also raises de minimis tariff thresholds:
- The ad valorem rate increases from 90% to 120%.
- Postal item duties will rise from $75 to $100 beginning May 2, and from $150 to $200 starting June 1.
Customs and Border Protection (CBP) has confirmed that the “on the water” exemption remains active through May 27, allowing flexibility for shipments already in transit.
WR will continue monitoring the impact of these tariff changes and provide updates to support members navigating these shifting trade policies.
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Easter spending nears record high at $23.6 billion
Easter spending is expected to reach $23.6 billion this year, up from $22.4 billion in 2022 and just shy of the $24 billion record set in 2023, according to the National Retail Federation and Prosper Insights & Analytics.
Despite ongoing economic uncertainty, consumers are continuing to prioritize Easter traditions. Popular spending categories include candy (92%), food (89%), gifts (65%), decorations (51%), and clothing (49%). Families are planning meals, church attendance, visits with loved ones, and egg hunts at home.
Discount stores remain the top shopping destination (55%), followed by department stores (44%), online retailers (36%), and local small businesses (26%). Shoppers are motivated by tradition (63%), but deals and promotions (36%) also influence spending decisions.
Interestingly, even among those not celebrating Easter, more than half plan to make holiday-related purchases, spending an average of $25.43 per person.
Retailers should be prepared to meet demand as shoppers seek meaningful and budget-friendly ways to celebrate. This season presents a strong opportunity for both large and small businesses to engage with consumers through holiday promotions and community-centered experiences.
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Retail sales see modest growth amid tariff uncertainty
Retail sales rose moderately in March following two months of declines, according to the latest CNBC/NRF Retail Monitor powered by Affinity Solutions. Excluding autos and gas, total retail sales increased 0.6% month over month and 4.75% year over year. Core retail sales, which exclude restaurants, autos, and gas, were up 0.4% month over month and 5.07% year over year.
Despite strong economic fundamentals, NRF President and CEO Matthew Shay attributed the cautious consumer behavior to rising tariff concerns and economic uncertainty. Many shoppers stocked up on goods in anticipation of price hikes following the president’s recent tariff announcements, including a proposed 10% minimum tariff on all trading partners and reciprocal tariffs on dozens of countries.
Category highlights included strong year-over-year gains for digital products (+27.62%), general merchandise (+7.62%), and sporting goods/hobby stores (+6.63%). However, sectors like health and personal care (-0.44% MoM) and building/garden supplies (-0.81% MoM) saw slight monthly declines.
As global trade tensions evolve, retailers are keeping a close eye on consumer confidence and spending trends. For the full report, visit nrf.com/nrf/cnbc-retail-monitor.
| | Image: Whatcom Business Alliance | | |
Hardware Sales’ Ty McClellan named Business Person of the Year
Congratulations to Ty McClellan, owner of Hardware Sales, for being named “Business Person of the Year” at the Whatcom Business Awards Black & Gold Gala on March 27, 2025. Presented by the Whatcom Business Alliance (WBA), the award honors outstanding leadership and community impact.
McClellan credited his success to his team, stating in Business Pulse magazine, “You’re only as good as your people. We couldn’t do it without our dedicated managers and wonderful team.” The recognition highlights McClellan’s leadership and the collaborative culture he’s built at Hardware Sales.
McClellan was selected from a field of strong finalists: Brad Barron (Barron Heating AC Electrical & Plumbing), Stowe Talbot (Talbot Group), and Trip Randall (Superfeet Worldwide). Learn more about each finalist and explore the full story in the current issue of Business Pulse at businesspulse.com, starting on page 42.
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New budget shortfall leads Mayor Harrell to consider cuts and new progressive taxes
Seattle is facing a projected $240 million shortfall in tax revenue for the 2025–2026 biennium, prompting Mayor Bruce Harrell to direct city departments to reduce or eliminate spending on “travel, nonessential equipment upgrades, and new consultant contracts.” The Mayor indicated that additional project cuts will be considered on a “case-by-case basis”, and the city’s existing hiring freeze will remain in effect.
Mayor Harrell also suggested that he could include new progressive taxes in his 2026 budget plan. The Council considered a local capital gains tax while deliberating on the 2025 budget but ultimately decided it needed additional study. A higher JumpStart tax, the payroll tax on large companies, could also surface in the Mayor’s budget proposal.
A number of factors are driving the projected revenue shortfall. After years of out-performing projections, the JumpStart tax is expected to perform below the forecasts used to develop the 2025 and 2026 budgets. Given the current glut of commercial office space in the city, construction-based tax receipts are trending downward, while sales tax revenue from personal and business spending is flat after years of growth.
Broader economic concerns are compounding the city’s financial outlook. Potential federal tariffs and a possible decline in international tourism, critical to Seattle’s trade-dependent economy, are raising alarms. With the 2026 World Cup on the horizon, tourism-related worries may intensify. Additionally, ongoing reductions in federal grants and spending are contributing to the city's budget challenges.
These factors, combined with uncertainty about the national and local economies, led the Seattle Office of Economic and Revenue Forecasts to take an unusual step – it urged City government to use the most pessimistic of the three budget projections it developed.
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Executive Order challenges state climate laws, Including Washington’s CCA
President Trump signed an executive order this week challenging state-level climate policies, including Washington’s Climate Commitment Act (CCA). The order directs attorneys general to target state laws that regulate carbon emissions, environmental justice, or impose carbon-related fees, asserting they burden domestic energy production and are potentially unconstitutional or preempted by federal law.
Washington’s CCA, a cap-and-trade program aiming for carbon neutrality by 2050, requires major polluters to reduce emissions or purchase allowances. Though it has raised billions, critics note only a small portion directly funds emission-reduction projects, with the rest supporting climate resilience, infrastructure, and health initiatives.
Governor Bob Ferguson expressed confidence in defending the CCA, citing its 61% voter approval. Washington agencies, including the Department of Transportation, are reviewing potential funding impacts and awaiting federal guidance.
Legal precedent, such as the Clean Air Act and the 2007 Massachusetts v. EPA ruling, affirms states’ rights to regulate emissions. Washington has previously defended its environmental policies against federal rollbacks.
While the executive order’s impact remains unclear, several states have reaffirmed their commitment to advancing climate solutions and preserving state authority in environmental regulation.
| | A general view of the Victorian International container terminal in Melbourne, Australia, on April 4, 2025. Asanka Ratnayake via Getty Images | | |
White House Executive Order aims to bolster U.S. maritime industry and supply chains
On April 10, the White House issued an Executive Order focused on restoring America’s maritime dominance and reducing reliance on foreign supply chains, especially China. The order lays out a comprehensive Maritime Action Plan (MAP) to strengthen U.S. shipbuilding, improve port infrastructure, and grow the maritime workforce.
Key components include potential new tariffs on Chinese maritime equipment, stricter customs enforcement, such as collecting full duties on goods rerouted through Canadian or Mexican ports, and the introduction of public-private funding tools to support shipyard investments. A Maritime Security Trust Fund and Shipbuilding Financial Incentives Program are among the proposed mechanisms.
The order also directs federal agencies to invest in maritime education and streamline credentialing for mariners, while reviewing regulations to encourage innovation and reduce barriers. It further aims to strengthen cargo preference laws and align international trade policies with U.S. allies.
For retailers, these developments could lead to changes in port fees, cargo routing rules, and supply chain logistics.
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Federal Lawmakers reintroduce bipartisan bill to combat organized retail crime
On April 10, lawmakers reintroduced the Combating Organized Retail Crime Act of 2025 in both chambers of Congress. Led by Senators Chuck Grassley (R-IA) and Catherine Cortez Masto (D-NV), along with a bipartisan group of 12 senators, the bill (S. 1404) seeks to curb increasingly sophisticated retail theft. Representatives Dave Joyce (R-OH), Susie Lee (D-NV), and Dina Titus (D-NV) introduced the House version (H.R. 2853).
The legislation strengthens federal efforts by expanding money laundering statutes to include gift cards, establishing a federal coordination center within Homeland Security Investigations, and supporting multi-jurisdictional investigations. It also promotes greater data sharing to identify and disrupt retail crime networks, which often operate across state and national borders.
The National Retail Federation (NRF) praised the bill, calling it “an important next step” and urging swift passage.
Organized Retail Crime (ORC) poses a growing threat to businesses, employees, and consumers nationwide. This bill is designed to bolster collaboration between law enforcement and the retail sector while giving federal agencies more tools to pursue and prosecute high-level retail theft operations.
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Senate passes Public Safety Bill
HB 2015, establishing public safety grants and enabling local governments to implement long-term funding, has passed the Senate with bipartisan support. The bill now returns to the House for concurrence, which is highly likely.
Prime-sponsored by Rep. Debra Entenman (D-47), HB 2015 must now be fully funded in the Operating Budget. Governor Ferguson initially requested $100 million to support the program. Grant funds under the bill can be used to hire additional law enforcement officers, prosecutors, public defenders, treatment providers, and community outreach professionals, helping to make our communities safer.
WR strongly supports HB 2015 and thanks the Senate for its passage. We encourage the House to concur, and we appreciate the Governor’s commitment to sign the bill once it reaches his desk.
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PNWER Annual Summit offers unique cross-border collaboration opportunity
The Pacific NorthWest Economic Region (PNWER) will host its 34th Annual Summit from July 20–24, 2025, at the Hyatt Regency in Bellevue, WA. WR President & CEO, Renée Sunde is serving on the host committee which is responsible for content development, fundraising, and business and partnership outreach. This event brings together over 600 leaders from government and industry across the U.S. and Canada to collaborate on shared regional priorities, including trade, innovation, infrastructure, energy, environmental sustainability, and economic development.
PNWER is a public-private partnership that includes U.S. states and Canadian provinces and territories, serving as a leading model for cross-border cooperation. The Summit offers attendees the chance to engage directly with legislators, policymakers, and business leaders shaping the future of the region.
For more information or to register, visit pnwer.org/2025-summit.
Summit Co-Chairs include Rep. Cindy Ryu (WA), Diana Birkett Rakow of Alaska Airlines, and Mary Snapp of Microsoft.
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Preparing for FIFA World Cup 2026: Viewing party best practices webinar
The Seattle Metro Chamber, in partnership with the Seattle Sports Commission, is offering a free webinar on Thursday, May 8, 2025, from 11:00 AM to 12:00 PM to help communities prepare for unofficial FIFA World Cup 2026 (FWC26) viewing parties.
This session will introduce the new Community Watch Party Playbook, a guide designed to help organizations understand FIFA's viewing party rules, licensing requirements, and event planning best practices. The webinar will simplify the process of securing a license from FIFA and highlight important steps for hosting compliant and engaging watch parties.
Attendees will also hear from the City of Seattle Special Events team, who will offer insight into local permitting and logistical considerations for those planning events within city limits.
Retailers and local organizations outside of official Fan Zones are encouraged to attend and learn how to join in the celebration while staying aligned with regulations.
Register Now
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WR diversity statement
WR is committed to the principles of justice, equity, diversity, and inclusion. We strive to create a safe, welcoming environment in which these principles can thrive.
We value all people regardless of race, ethnicity, gender, religion, age, identity, sexual orientation, nationality, or disability, and that is the foundation of our commitment to those we serve.
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Renée Sunde, President/CEO — 360.200.6450 — Email
Mark Johnson, Sr. VP of Policy & Government Affairs — 360.943.0667 — Email
Crystal Leatherman, Dir of Local & State Government Affairs — 360.200-6453 — Email
Rose Gundersen, VP of Operations & Retail Services — 360.200.6452 — Email
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