Newsletter — December 19, 2024 | |
POLICY
ECONOMY
ON THE LOCAL FRONT
POLITICAL NEWS
RETAIL THEFT & PUBLIC SAFETY
IN THE NEWS
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Season's greetings from Washington Retail Association
As we reflect on the past year, we are incredibly grateful for the strength and resilience of our retail community. Your unwavering dedication, hard work, and innovation have helped us all navigate challenges, celebrate successes, and build a brighter future for Washington’s retail industry.
This holiday season, we wish all our members, their teams, and families a joyful and peaceful holiday season. May this time bring you well-deserved moments of rest and celebration. We are grateful for your contributions, and we look forward to another year of collaboration, growth, and shared success.
Happy Holidays from all of us at WR!
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Interim policy on lead restrictions in cosmetics
The Department of Ecology has announced plans to implement an interim policy by January 1, 2025, addressing lead restrictions under the Toxic-Free Cosmetics Act (TFCA). This action comes in response to challenges manufacturers face in consistently achieving lead concentrations below 1ppm. The interim policy aims to provide additional compliance pathways for products that cannot consistently meet 1ppm of lead while still requiring manufacturers toward the lowest possible lead levels in cosmetic products.
What Retailers Need to Know:
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Timing: The interim policy will take effect on January 1, 2025.
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Purpose: The policy offers alternative paths for products that may not yet meet the statutory lead limit but will still require manufacturers to actively reduce lead levels.
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Future Rulemaking: In 2025, the Department of Ecology anticipates launching a formal rulemaking process to address lead impurities. This process will include opportunities for public input and engagement with stakeholders, including the retail industry.
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To read to full bulletin from Ecology, please click here.
To stay up to date on the Toxic Free Cosmetics Act you can sign up for the email list here.
WR will continue to follow this closely and will be engaging in the rulemaking process once it begins.
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Does the state have a deficit or a spending problem?
Last week, the Legislature held its pre-session warm-up, which included briefings from the Revenue Forecast Council and the Caseload Forecast Council.
The key takeaway was that Washington State’s economy continues to grow, but at a slower pace than in recent years. With this economic slowdown, tax revenues have also decelerated. Washington relies primarily on three main tax sources: sales and use tax, property tax, and business and occupation (B&O) tax. The state does not have a personal income tax.
Projections suggest that to maintain current program costs, Washington will face a shortfall of several billion dollars over the next few years. Estimates range from $6 billion to $12 billion, depending on the source—figures that seem to keep increasing.
So, is the state in a deficit? The honest answer is “no.” What we’re facing is a self-imposed spending problem that has persisted for years.
When the economy was booming and tax revenues were at record highs, the Legislature expanded or created new programs. However, a hot economy inevitably cools, and those expanded and new programs become harder to sustain.
Historically, tax collections in Washington—aside from rare exceptions like the Great Recession—have steadily increased, often outpacing inflation. The issue is that state spending obligations continue to grow faster than revenues.
Now, there is already talk of massive tax and fee increases, as proposed by the outgoing Governor, who will retire in mid-January. Instead, the Legislature and the incoming Governor should focus on reining in government spending, prioritizing programs that serve Washington’s citizens, and setting aside funds to prepare for the next economic downturn.
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Washington faces projected $6.7 billion budget shortfall by 2027-29
The Office of Program Research (OPR), a nonpartisan staff for the Washington State House of Representatives, has estimated a significant budget shortfall for the coming years. According to their report presented to the Appropriations Committee, the unrestricted ending balance for funds subject to the outlook (NGFO) is projected at -$4.351 billion for 2025–27 and -$6.700 billion for 2027–29.
The shortfall stems from increased costs for maintaining current services. OPR estimates that maintenance level changes—covering inflation and enrollment adjustments—will raise appropriations by $742 million in 2023–25, $4.377 billion in 2025–27, and $6.367 billion in 2027–29. Key drivers include inflation adjustments for K–12 education, caseloads for childcare and long-term care, and debt service.
These projections do not account for employee compensation or other policy changes, which could push the shortfall closer to $10 billion, similar to estimates from the Office of Financial Management.
OPR cautions against assuming overly optimistic revenue growth, which could exacerbate the deficit. Lawmakers are advised to base spending on forecasted revenues to avoid compounding budgetary challenges. With further updates expected before the Legislature crafts its budget, the financial outlook remains uncertain but daunting.
ResearchCouncil.org
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Proposal to expand paid leave puts program stability at risk
A recent report from the Joint Legislative Audit and Review Committee (JLARC) highlights the urgent need to stabilize funding and strengthen the operational capacity of Washington State's Paid Family and Medical Leave (PFML) program. Despite these findings, a legislative proposal to expand eligibility to workers with just three months of employment threatens to undermine these critical objectives.
Currently, Washington’s eligibility requirements align with federal Family and Medical Leave standards: workers must accumulate 820 hours within the first four of the last five completed quarters. Despite this threshold, PFML usage has far exceeded initial projections. Since premium collections began in 2019, program costs have increased 130%. Actuarial models predict that, at the current rate, premiums will reach the statutory cap of 1.2% by 2028.
Operational challenges within the Employment Security Department (ESD), which oversees the program, exacerbate the strain. Staffing shortages, delayed audits, overpayments, and an inability to meet customer service demands are ongoing issues. Even if funding is approved in the next biennium, it will take at least two years to scale staffing and infrastructure to meet demand.
Prematurely expanding eligibility jeopardizes the JLARC recommendations and risks delaying necessary program improvements. Timing is critical. To ensure the program’s long-term success for both workers and employers, the focus must remain on stabilizing PFML’s finances and resolving operational issues— not further expansion.
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Retail sales growth holds steady as industry faces labor and tariff challenges
Retail sales remained strong in November despite two key Thanksgiving weekend shopping days falling in December this year, according to the CNBC/NRF Retail Monitor. NRF Chief Economist Jack Kleinhenz highlighted robust third-quarter results and ongoing economic growth as drivers for a solid holiday season. NRF continues to project holiday sales growth of 2.5% to 3.5% over 2023.
Meanwhile, labor talks between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) have stalled, raising concerns of a potential strike when the current contract extension ends on January 15, 2025. NRF, along with 267 trade associations, has urged both parties to avoid disruptions that could coincide with the incoming administration’s tariff increases.
According to NRF’s Global Port Tracker, U.S. ports are bracing for increased imports well into spring 2025 due to these challenges.
To stay informed, register for NRF’s retailers-only webinar on December 19 at 1:30 p.m. ET. The session will explore the economic impact of proposed tariffs and findings from the Trade Partnership Worldwide report, particularly on household goods.
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Super Saturday shoppers expected to surge to 157 million
This year’s Super Saturday, the last Saturday before Christmas, is set to draw an estimated 157.2 million shoppers, according to the National Retail Federation (NRF) and Prosper Insights & Analytics. This marks a significant increase from last year’s 141.9 million shoppers and is the second-highest projection ever, trailing only 2022’s 158.5 million. NRF’s Vice President of Industry and Consumer Insights, Katherine Cullen, attributes the surge to a shorter shopping season, with consumers seeking final gifts and taking advantage of last-minute deals.
Meanwhile, NRF reports that November retail sales showed moderate growth, even with key shopping days like Thanksgiving Sunday and Cyber Monday falling in December. According to the CNBC/NRF Retail Monitor, powered by Affinity Solutions, November sales, excluding autos and gasoline, grew 2.35% year-over-year. Core retail sales, excluding restaurants and other sectors, saw a smaller increase of 1.43% over last year. It was also noted that the strong October sales momentum carried into November, despite the calendar shift.
NRF maintains its forecast of a 2.5%-3.5% increase in holiday retail sales this year, signaling a resilient shopping season amid changing consumer habits.
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Celebrate Washington’s government at the 2025 Governor’s Inaugural Ball
Mark your calendars for an unforgettable evening at the 2025 Washington State Governor’s Inaugural Ball, hosted by the Thurston County Chamber of Commerce! This historic event celebrates the Office of Washington’s Governor and honors the elected officials serving across the legislative, judicial, and executive branches.
Event Details:
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Date: Wednesday, January 15, 2025
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Time: 7:00 p.m. – 11:00 p.m. (Doors open at 6:30 p.m.)
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Location: Washington State Capitol Campus
The evening promises to be a spectacular celebration, bringing together community leaders, elected officials, and distinguished guests. The event will reflect the vibrancy and diversity of Washington State, offering a unique opportunity to connect with others in a festive, formal atmosphere.
Highlights of the Evening Include:
- A formal program in the Rotunda
- Live music to set the tone for the night
- Heavy hors d'oeuvres and beverages to enjoy throughout the evening
- Opportunities for dancing and mingling with guests from all over the state
Members of the WR Policy & Government Affairs team will be present and look forward to seeing you there!
Get Your Tickets Today!
Tickets are now available for purchase. Visit wastategovball.org to secure your spot at this landmark event.
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Tammy Morales listens to public comments at Seattle City Hall on Sept. 17. (Kevin Clark / The Seattle Times) | |
Seattle Times Editorial Board criticizes Morales resignation message
The Seattle Times Editorial Board strongly criticized Councilmember Tammy Morales’ decision to resign, characterizing it as “political cowardice.” In their editorial, the Board pushed back on Morales’ public grievances against her Council colleagues.
The Editorial Board contrasted Morales’ departure with Council President Sara Nelson’s response to adversity. Nelson, often on the losing side of 8-1 votes during her first two years on the Council, did not quit. Instead, she recruited pragmatic candidates for the 2023 election, helping to elect five new members and shift the Council’s ideological balance.
While Morales cited health concerns as a factor in her resignation, the Editorial Board noted her “mini media tour” of criticisms, describing it as “torching the institution on her way out.”
The Board challenged several of Morales’ claims. One example is her criticism of the Council’s handling of a housing initiative. After a citizens group qualified the initiative for the February ballot, the Council approved placing both the initiative and an alternative measure on the ballot. Morales accused the Council of “suppressing the will of voters,” by offering the voters an alternative. The Editorial Board called this allegation “plain nonsense.”
The Editorial Board also pushed back on Morales’ criticism of the 2025 Council-approved budget, which passed 8-1. Morales opposed increased spending on public safety, a stance the Board highlighted as a continuation of her 2020 efforts to defund the police. “Over and over, she contends that police don’t make communities safer,” the Board wrote.
Following Morales’ resignation, effective January 7, the Council will have 20 days to appoint a temporary replacement for the District 2 seat. Voters will elect a new representative in November 2024, and the seat will return to the ballot in 2027 along with the other six district positions.
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Left to Right: Mark Johnson, WR Senior Vice President of Policy & Government Affairs, Rep. Michelle Caldier (R-26), and Crystal Leatherman, WR State & Local Government Affairs Director | |
State Rep. Michelle Caldier declares candidacy for State Senate
26th District State Representative Michelle Caldier has officially announced her candidacy for the district’s open Senate seat. The 26th District includes Gig Harbor, Port Orchard, and parts of Kitsap County. A special election to fill the seat will take place in November 2025.
Rep. Caldier has been a steadfast advocate for the retail industry, earning the Retail Action Council PAC’s endorsement in each of her House races.
Currently, Rep. Caldier serves on several key committees:
- Innovation, Community and Economic Development & Veterans
- Healthcare & Wellness
- Regulated Substances & Gaming
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Senator Karen Keiser (D-33) | |
Retirements and election wins lead to more change in the Washington State Legislature
A retirement announcement and election wins bring changes and new faces into the legislature, while a few key appointments remain pending. Here’s what you need to know:
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Senator Karen Keiser (D-33) Retires: After serving in the legislature for over 30 years, Senator Keiser announced her decision to retire before the start of the 2025 legislative session. Her seatmate, Rep. Tina Orwall (D-33) has been appointed to fill the vacant Senate seat.
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Senator Emily Randall (D-26) Wins Congressional Election: Senator Randall’s move to Congress has opened her Senate seat. Deb Krishnadasan, who previously served six years on the Peninsula School Board District and has a background in education, has been appointed to succeed her.
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Senator Patty Kuderer (D-48) Elected State Insurance Commissioner: With Senator Kuderer transitioning to her new role, her Senate seat remains unfilled. Both of her House seatmates, Reps. Amy Walen and Vandana Slatter, have expressed interest in the appointment. A decision on Kuderer’s replacement is expected soon.
A decision is still pending on who will fill the vacant house seats. All legislators appointed will run in a special election in 2025.
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Shop smart this holiday season: Avoid counterfeit goods
As the holiday shopping season kicks off, shoppers should be cautious of counterfeit goods flooding the market. These fake products not only endanger consumer safety but also undermine legitimate businesses and fund criminal activities.
In Fiscal Year 2024, U.S. Customs and Border Protection (CBP) seized over 32 million counterfeit items, valued at more than $5.4 billion if authentic. To address this growing issue, CBP and the U.S. Chamber of Commerce have partnered to educate consumers on shopping safely.
Tips to Protect Yourself:
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Trust Your Instincts: Deals too good to be true often are. Avoid suspicious sites and ads.
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Prioritize Secure Payments: Shop on sites with “https://” and a lock icon.
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Examine Details: Check labels, packaging, and safety seals for inconsistencies.
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Protect Your Data: Update devices and steer clear of malicious websites.
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Report Suspicious Activity: Use CBP’s Trade Violations platform to report counterfeits.
Counterfeit goods harm consumers, create environmental waste, and fund illegal enterprises. By staying vigilant, shoppers can protect themselves, support legitimate businesses, and contribute to a safer economy.
For more tips, visit the U.S. Chamber of Commerce’s Shop Smart resources and CBP’s Truth Behind Counterfeits website.
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Fighting gift card fraud: Retailers, law enforcement, and legislators unite
Fraud remains a significant challenge across the global payments industry, and the retail sector is on the frontlines of combating these criminal activities. Gift cards, a cornerstone of the U.S. economy and the #1 most requested holiday gift for 17 consecutive years, are increasingly being targeted by organized retail crime (ORC) through a tactic known as Gift Card Tampering.
What is Gift Card Tampering? This emerging form of fraud involves criminals accessing sensitive card information, returning tampered cards to shelves, and stealing funds once cards are activated at the point of sale. Gift card tampering is part of the broader ORC epidemic and has ties to international organized crime.
How the Industry is Responding: To address this emerging threat, retailers, brands, distributors, and law enforcement are working together aggressively. Efforts include:
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Enhanced Packaging and Technology Controls: Innovations to deter tampering and prevent access to sensitive card data.
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Advanced Monitoring Systems: Tools to detect and disrupt fraudulent activity in real-time.
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Homeland Security Investigations (HSI) Project Red Hook: Launched in December 2023, this nationwide initiative focuses on disrupting organized crime groups abusing gift cards. Project Red Hook centralizes intelligence, coordinates operations, and educates law enforcement on tackling gift card fraud.
HSI and industry partners are also providing critical tools, resources, and contacts to support local and state law enforcement in identifying and prosecuting perpetrators of gift card tampering.
Challenges to Prosecution: Despite ongoing efforts, challenges remain in successfully prosecuting gift card fraud.
Lack of Awareness: Local law enforcement, policymakers, and district attorney offices need further education on the link between gift card fraud, ORC, and transnational criminal organizations.
Legal Gaps: Because gift cards have no value until activated, there is often a lack of clarity on applicable charges when criminals are caught in the act.
A Call to Action for State Legislators: We are urging state legislators to review existing fraud statutes and proposed ORC legislation to ensure consistent and clear pathways for the prosecution of gift card tampering. Enhancing legal language and clarifying charges can provide the necessary tools to hold perpetrators accountable and further disrupt organized retail crime.
Together, We Can Make a Difference: WR looks forward to working collaboratively with legislators and law enforcement to reduce gift card fraud, safeguard consumers, and protect the integrity of the retail economy in Washington State.
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Shoppers stream into the Fred Meyer store in Spokane Valley at the 5 a.m. Nov. 24, 2023, on Black Friday. (Jesse Tinsley/The Spokesman-Review) | |
Spokane Police launch program to combat organized retail crime
Spokane County and the Spokane Police Department are launching a new initiative to tackle organized retail crime (ORC), thanks to a $1 million state grant distributed through WAORCA. Nearly $300,000 will support regional enforcement, prosecution, and diversion efforts.
Spokane is one of three pilot programs statewide, joining initiatives in King and Snohomish counties. The Spokane Police Department will receive $90,000 to enhance patrols in retail-heavy areas, including downtown, NorthTown Mall, and U.S. Highway 2. Captain Tracie Meidl emphasized the focus on repeat offenders and organized groups, rather than petty theft.
The Spokane County Prosecutor’s Office will receive $200,000 to hold offenders accountable while also utilizing diversion programs and therapeutic courts for lesser-risk individuals. Assistant Chief Deputy Prosecutor Katie McNulty highlighted the importance of balancing accountability with opportunities for rehabilitation, reinforcing ongoing efforts to protect businesses and restore community confidence.
ORC costs Washington’s retail industry an estimated $3 billion annually. The program aims to strengthen collaboration between law enforcement, prosecutors, and business owners to address these crimes effectively. The association plans to request additional funding from the state Legislature to expand the program statewide.
Property crime impacts everyone. This initiative ensures Spokane remains a safe, vibrant place for business.
Spokesman.com
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Shoplifting incidents surge 93% since pre-COVID
A new study by the National Retail Federation (NRF) highlights a dramatic 93% rise in shoplifting incidents in 2023 compared to pre-COVID levels in 2019, accompanied by a 90% increase in financial losses. The report, The Impact of Retail Theft & Violence 2024, conducted with the Loss Prevention Research Council and sponsored by Sensormatic Solutions, underscores how theft and violence have intensified in the retail sector.
The findings reveal alarming trends: shoplifters are exhibiting more aggression, with 91% of retailers observing increased violence compared to 2019. Multi-person thefts and organized retail crime (ORC) are also surging, with ORC incidents up 57% from 2022. Nearly 76% of respondents say ORC-linked shoplifting is a growing concern.
Retailers are investing in safety, with 71% increasing workplace violence training budgets. However, industry leaders stress the need for a collaborative approach and federal support to address these challenges.
“Retail crime is a sophisticated and evolving issue,” said Dr. Read Hayes of the Loss Prevention Research Council. NRF continues to advocate for the Combating Organized Retail Crime Act to bolster law enforcement coordination at all levels.
The Impact of Retail Theft & Violence 2024
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Costco shines amid shifting consumer trends
Costco Wholesale Corp. surpassed profit expectations for the quarter ending November 24, 2024, showcasing its resilience in a challenging retail environment. Earnings hit $4.04 per share, boosted by strong sales of food, jewelry, and home furnishings, alongside online growth. A $100 million tax benefit tied to stock-based compensation also supported the profit beat.
Costco’s affluent, loyal customer base—reflected in a 90% membership renewal rate—continues to insulate the company from economic pressures. The retailer’s value-driven model, featuring jumbo-sized products and its popular Kirkland brand, draws consistent traffic, even as consumers seek deals amid lingering inflation concerns. Comparable sales, excluding gasoline and currency impacts, rose 7.1% this quarter.
The holiday season has seen strong sales of seasonal items and e-commerce drivers like furniture. Shoppers are shifting spending from dining out to groceries, prioritizing both premium and budget-friendly products.
Earlier this year, Costco raised membership fees and expanded scanner installations to curb card-sharing. Despite a slight dip in shares recently, the stock remains up 50% year-to-date. As consumers remain cautious yet value-focused, Costco’s adaptability and loyal customer base solidify its position as a retail leader.
BNBloomberg.ca
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DoorDash’s cheeky holiday campaign: “No One Has to Know”
DoorDash has launched its new holiday campaign, “No One Has to Know,” designed to appeal to guilt-ridden consumers who love the platform’s convenience for last-minute saves but don’t want anyone to find out. The lighthearted ads highlight how DoorDash can discreetly rescue holiday mishaps, just in time for the season of giving.
The campaign features three humorous spots: Caroler, where a dad enlists his Dasher to sing a chaotic rendition of “Silent Night” to cover for a forgotten gift; Rendezvous, showing a stealthy Dasher saving a couple from arriving at a party empty-handed; and Faker Baker, where a matriarch disguises her baking fail with a store-bought cake.
Created by DoorDash’s in-house studio, Suprette, and directed by Win Bates, the ads debuted in late November to coincide with the platform’s annual sales event. The campaign also features collaborations with social media personalities like Jordan Howlett, Jordan Firstman, and DJ duo Sundae Scaries, who are sharing content with their combined millions of followers.
With humor and relatability, DoorDash is helping customers navigate the chaos of the holidays—while keeping their secrets safe.
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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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