Newsletter — October 09, 2025

POLICY

• Washington minimum wage to increase to $17.13 in 2026
• Interim guidance released for upcoming retail sales tax changes

ECONOMY

• State revenue forecast shows continued decline, budget challenges ahead
• Hastily passed tax will haunt WA lawmakers
• Seattle’s economy shows signs of slowing, but not recession
• Imports expected to dip below 2 million TEU as tariffs rise

ON THE LOCAL FRONT

• Opinion: Let’s talk honestly about Prop 1 and its unintended consequences 
• Olympia City Council Votes to Oppose Proposition 1

POLITICAL NEWS

• WR Local Government PAC announces new round of endorsed candidates 
• Support WR-endorsed candidates in the General Election
• Holiday season could be at risk as federal shutdown continues

RETAIL THEFT & PUBLIC SAFETY

• Celebrating National Crime Prevention Month
• Grays Harbor man sentenced for leading organized retail theft operation
• Organized retail crime rings target everyday essentials

IN THE NEWS

• Walmart to remove synthetic dyes and over 30 ingredients from private brand foods
• Michaels revives Joann brand through new in-store concept

Washington minimum wage to increase to $17.13 in 2026

Beginning January 1, 2026, Washington’s minimum wage will rise to $17.13 per hour, a 2.8 percent increase from the current $16.66 rate, according to the Washington State Department of Labor & Industries (L&I). The annual adjustment is based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers, as required by state law.

Local governments may set higher minimum wages, and several cities already exceed the state rate, including Seattle, SeaTac, and Tukwila. The federal minimum wage remains $7.25 per hour.

The updated rate also affects overtime-exempt workers. In 2026, salaried employees classified as executive, administrative, or professional must earn at least 2.25 times the state minimum wage, or $1,541.70 weekly ($80,168.40 annually). Hourly computer professionals must earn at least $59.96 per hour to qualify for exemption.

Employers may pay workers aged 14–15 at 85 percent of the new minimum wage, or $14.56 per hour. Minimum pay rates for rideshare drivers will also increase, both within and outside Seattle.

More details about the updated wage rates, overtime rules, and related requirements are available on the L&I website.

Interim guidance released for upcoming retail sales tax changes

The Washington State Department of Revenue has released interim guidance to help businesses prepare for changes related to Engrossed Substitute Senate Bill (ESSB) 5814, which takes effect on October 1, 2025. The new guidance provides clarification on how the updated retail sales tax will apply, including its impact on custom software.

This release marks the final installment in a series of Interim Guidance Statements developed to support taxpayers as they transition to the new rules. Businesses can rely on the interim materials until final or permanent guidance is issued.

The Department encourages retailers and other affected businesses to review the available resources, which include previously published guidance and frequently asked questions. Additional updates will be posted as implementation approaches.

For more information visit the Department of Revenue’s website

State revenue forecast shows continued decline, budget challenges ahead

Washington’s projected tax collections have declined by more than $500 million since the Legislature approved its most recent two-year budget earlier this year. The latest report from the state’s Economic and Revenue Forecast Council shows revenue falling $412 million below expectations from June, signaling continued fiscal challenges for the state.

Lawmakers will face tough decisions when they return to Olympia in January for the 2026 legislative session. While some state leaders have indicated they may revisit revenue options, others are calling for renewed focus on spending restraint and program efficiencies. Governor Bob Ferguson said he will prioritize maintaining core services while ensuring the state’s next supplemental budget remains balanced.

The $77.8 billion operating budget supports education, health care, social services, and public safety. However, lagging sales and real estate excise taxes, a slower construction market, and weaker-than-expected job growth have contributed to declining revenues.

The next official forecast is due in mid-November and will guide lawmakers as they prepare adjustments to the state’s spending plan. Businesses and policymakers alike will be watching closely to see how the state’s economic outlook shapes fiscal and policy decisions in the coming year.

Photo credit: Nick Wagner / The Seattle Times

Hastily passed tax will haunt WA lawmakers

By The Seattle Times editorial board

Nine days — that’s how long Democratic lawmakers in Olympia took to pass a sweeping expansion of sales taxes, estimated to impact more than 90,000 businesses in Washington. Hurrying to approve a multipronged tax on many services was a reckless way to craft foundational economic policy.

The tax, expected to raise almost $2.7 billion over the next four years, takes effect Wednesday.

Already, fallout from its rushed passage has caused widespread confusion among the companies expected to pay it and has generated a challenge in court over whether it’s legal. 

Most notably, the tax — part of the largest tax package ever approved by the Legislature — will reverberate throughout the state’s economy, ultimately putting a dent in the wallets of all Washingtonians. The new taxes cover a broad range of business services, including information technology, security, temporary staffing and more.

Ruling Democrats bemoaned a runaway budget this past session, one they said required a bevy of tax increases. But this obfuscated the truth: State tax revenues had been increasing, just not enough to cover all their spending priorities. So they solved this political quandary with taxes whose deep economic impacts many lawmakers failed to consider.

The result isn’t pennies across the economy. They are broad hacks into many small businesses’ bottom lines. Take DigBI Consulting, an IT company of 15 employees based in Sammamish. The company’s prices just went up 10% overnight, amounting to about $10,000 apiece for many customers, according to Lee Derks, the company’s founder and CEO.

“I don’t think (the Legislature) realized how much this is going to hurt small businesses,” Derks said.

Seattle’s economy shows signs of slowing, but not recession

Recent forecasts have raised questions about whether Washington, and particularly Seattle, is entering a recession. Economist Mark Zandi of Moody’s Investors Service recently placed Washington among 21 states “on the precipice” of one. Yet, by most traditional measures, the local economy remains resilient.

Unemployment in Washington is around 4.5 percent, far below the levels seen during the Great Recession. The Dow Jones Industrial Average remains near record highs, and statewide revenue continues to grow, though at a slower pace. Still, there are clear signs of a cooling economy: construction and housing starts are down, Seattle’s office vacancy rate has reached 27 percent, and the city faces a $150 million budget shortfall.

Federal tariffs and proposed visa fees could challenge Washington’s trade-dependent industries, while local business taxes and high minimum wages are adding pressure to employers. Meanwhile, sectors such as healthcare, technology, and education remain steady, and productivity growth continues to lead the nation.

Despite these mixed signals, most indicators suggest that Seattle’s economy is not in a formal recession. High wages, strong productivity, and diverse industries continue to position the region as one of the nation’s most resilient economic centers.

Imports expected to dip below 2 million TEU as tariffs rise

Monthly import volumes at major U.S. container ports are expected to fall below 2 million Twenty-Foot Equivalent Units (TEU) for the rest of 2025, according to the latest Global Port Tracker report from the National Retail Federation (NRF) and Hackett Associates. The decline follows early shipments of holiday goods and the ongoing impact of rising tariffs on imported products.

NRF Vice President Jonathan Gold noted that retailers frontloaded shipments to avoid reciprocal tariffs and are now well-stocked for the holiday season. However, new tariffs on items such as upholstered furniture, kitchen cabinets, and bathroom vanities are set to take effect soon, with additional increases possible in early 2026.

Hackett Associates Founder Ben Hackett said that shifting U.S. tariff policy is contributing to economic uncertainty, leading to fluctuating trade volumes in the coming months. August imports reached 2.32 million TEU, but projections show declines through year-end, with December forecast at 1.72 million TEU, the lowest level since March 2023.

Despite the slowdown, total imports for 2025 are expected to reach 24.79 million TEU, down 2.9% from 2024. The Global Port Tracker report is available to NRF members at NRF.com/PortTracker.

Wayne Fournier is a Thurston County commissioner, lifelong union member and former mayor of Tenino.

Opinion: Let’s talk honestly about Prop 1 and its unintended consequences 

The Daily Chronicle

Posted Monday, September 29, 2025 

By Thurston County Commissioner Wayne Fournier

I am a proud lifelong union member, raised in a family of union leaders. I’m an active member of IAFF Local 315, a former member of IAFF Local 2903, and a former member of WFSE. I’ve been in elected office for nearly 15 years, first as a City Councilmember, then as a mayor, and now as one of your Thurston County Commissioners. Along the way, I earned an advanced certificate in Municipal Leadership. My values are grounded in respect for working people and solidarity with organized labor, and those values are why I have always identified as a Democrat.

One of my favorite initiatives I’m working on right now (with my fellow commissioners) is ensuring community workforce agreements are included on every major capital project we take on as a county, so that local tax dollars employ and support local workers. That’s why I deeply respect the intent behind the Workers’ Bill of Rights (Proposition 1) and the people supporting it.

But as always, the devil is in the details.

Earlier this year, the City of Olympia funded a study to examine the potential impacts of this initiative. But once the signatures qualified it for the ballot, state law required the city to cancel that process, so the work was never done. Olympia is essentially flying blind, full speed ahead. From that point forward, strict Public Disclosure Commission (PDC) rules barred staff and councilmembers from producing any analysis that might be seen as “for” or “against.” In practice, that has silenced the very people we would normally rely on for answers. Many staff are even hesitant to respond to basic questions for fear of fines.

I write this with personal concern and at some risk: simply asking questions or speaking out in today's political climate could make me a target, even get me doxxed or blacklisted by small but vocal circles in our community that are pushing hard for this to pass. There was even an overt attempt to deny residents their democratic right to vote, forcing this straight into law without public input, the very antithesis of democratic values. That fear has created a vacuum of honest discussion at the very moment Olympia needs it most.

Still, kicking in doors and running into burning buildings is the kind of adventure I live for, so here we go, these are some of the concerns we need to talk about and consider:

Olympia City Council votes to oppose Proposition 1

After more than three hours of spirited testimony, the Olympia City Council voted 4–3 to adopt Resolution 25-0865 opposing Proposition 1, a sweeping workplace initiative on the November ballot.

Members of Olympia Together—a coalition of small businesses, nonprofits, and citizens urging a “No” vote—filled the chamber in campaign shirts. The group has gained an impressive list of endorsements from current and former leaders across Olympia and nearby cities.

Cheryl Selby, Olympia’s former two-term mayor, urged protection of small businesses and nonprofits already under financial strain. Alex Ketter, owner of a senior-care franchise, said Proposition 1 would classify his company as a large employer, forcing premium pay that could raise Olympia senior care costs by more than 80%. The Olympia Union Gospel Mission warned of reduced services for homeless youth and veterans.

Supporters of Prop1 outnumbered opponents in the Council Chamber about two to one, focused on raising the minimum wage and establishing a “private right of action” to let workers sue employers directly. Supporters said this would ensure enforcement without burdening the city; opponents warned it would encourage costly lawsuits and harm small employers.

Before the vote, Mayor Dontae Payne noted that taking positions on impactful local initiatives is consistent with council tradition. Payne, Mayor Pro Tem Yến Huỳnh, and Councilmembers Dani Madrone and Kelly Green voted for the resolution, citing the need to protect small businesses, nonprofits, and regional economic stability.

WR Local Government PAC announces new round of endorsed candidates 

The Washington Retail Association’s Local Government Political Action Committee is proud to announce its latest round of endorsements for candidates running in key local council races across Washington.  

Each of these individuals has demonstrated a strong commitment to supporting policies that promote safe communities, responsible governance, and a healthy business environment for retailers and local employers. 

These endorsements reflect WR’s ongoing efforts to back pragmatic leaders who understand the challenges facing retailers, the value the industry brings to communities across the state, and who are committed to fostering partnerships that strengthen Washington’s local economies.

Endorsed Candidates 

• Jared Nieuwenhuis, Bellevue City Council, Position 4 — Incumbent 
• Paul Clark, Bellevue City Council, Position 1 — Open Seat 
• Jim Ferrel, Federal Way, Mayor – Incumbent  
• Diodato “Dio” Boucsieguez, Lynnwood City Council, Position 2 — Open Seat 
• Peter Condyles, Marysville City Council, Position 1 — Incumbent 
• Deanna Martinez, Moses Lake City Council, Position 1 — Incumbent 

Support the Retail Industry’s Political Voice 

WR operates two Political Action Committees that work together to ensure retailers have a strong, unified voice at every level of government: 

• The Retail Action Council (RAC PAC) – State & Federal: The RAC PAC reviews and supports candidates for state and federal offices, scoring incumbents on their voting records and accessibility to WR members. Non-incumbent and open-seat candidates are thoroughly evaluated through questionnaires and interviews to assess alignment with WR’s top policy priorities. The RAC PAC also actively participates in all four legislative caucus fundraisers to engage directly with lawmakers and candidates shaping state policy. 
•  
• The Local Government PAC – City & County: The Local PAC focuses on municipal and county-level races—including critical positions such as Seattle City Council and Mayor races—where local policies have a direct and immediate impact on retailers. The candidate review process mirrors that of the RAC PAC, and funding comes entirely from member contributions and direct solicitations. 

Why Your Contribution Matters 

Every contribution, large or small, helps WR support pro-retail candidates who will champion policies that promote business growth, public safety, and fair regulations. Your financial support directly empowers our advocacy work and ensures retailers’ voices are heard where it matters most. 

To contribute to one or both PACs, or to get involved, please contact Crystal Leatherman at cleatherman@washingtonretail.org. 

Support WR-endorsed candidates in the General Election

With the General Election just weeks away, the Washington Retail Association urges members and retail partners to support the pro-retail candidates endorsed by one of our two Political Action Committees: Retail Action Council PAC (State & Federal) and the Local Government PAC (City & County). 

Each endorsed candidate was carefully vetted through a thorough and objective process that included questionnaires, interviews, voting record evaluations, and alignment with WR’s legislative priorities. The result is a slate of leaders who understand retail’s vital role in creating jobs, driving innovation, and supporting local communities. 

The chart below links directly to each endorsed candidate’s campaign website.

WR encourages members to learn more and contribute directly to their campaigns. Local-level support can make the difference in electing pragmatic, business-friendly leaders who understand retail’s role in job creation and community vitality.

Help Strengthen & Support the Retail Political Voice 

WR’s two PACs ensure the retail industry is represented at every level of government: 

• Retail Action Council (RAC PAC) – Focuses on state and federal races to support candidates that demonstrate alignment with WR’s priorities and support of the retail industry. 
• Local Government PAC – Concentrates on city and county races where local policies have a direct and immediate impact on retailers.  

Both PACs rely entirely on member contributions to support pro-retail candidates and advance policies that promote business growth and public safety. 

Why Your contribution matters 

Every dollar helps amplify retail’s voice in elections and ensures lawmakers hear from those who power Washington’s economy. 

To contribute to one or both PACs, or to get involved, please contact Crystal Leatherman at cleatherman@washingtonretail.org. 

Holiday season could be at risk as federal shutdown continues

The National Retail Federation (NRF) is urging Congress to end the federal government shutdown that began on October 1 after lawmakers failed to approve a spending bill for the 2026 fiscal year. The NRF warns that a prolonged shutdown could weaken consumer confidence and dampen retail sales during the holiday season, a vital period for the nation’s economy.

The NRF highlighted that reduced income for federal employees, along with wider economic uncertainty, could lead consumers to curb spending by tens of billions of dollars. Disruptions in trade and supply chain operations could also create ripple effects for retailers and manufacturers across the country. Small businesses are particularly vulnerable, as many operate with limited margins and may struggle to absorb delays or drops in sales.

Roughly 900,000 federal workers have been furloughed, with another 700,000 continuing to work without pay. A White House analysis estimates that the shutdown could reduce U.S. GDP by about $15 billion for each week it continues. As of October 6, congressional negotiations remain at an impasse, leaving the retail industry bracing for potential fallout as the holiday shopping season approaches. 

Celebrating National Crime Prevention Month

October marks National Crime Prevention Month, a time to promote awareness and encourage community action to create safer neighborhoods. Across Washington, crime prevention professionals and community members continue to make a difference by strengthening local connections, sharing safety tips, and supporting prevention initiatives.

The Washington State Crime Prevention Association (WSCPA) recently celebrated these efforts during its 47th Annual Crime Prevention and Community Engagement Conference in Vancouver, Washington. The event recognized outstanding contributions to public safety, honoring Jennifer Carl and Iko Knyphausen as Outstanding Volunteers of the Year, Nic Li as the Outstanding Crime Prevention and Community Engagement Award recipient, and Jon Gerondale as the Practitioner of the Year. The Kent Police Department’s Community Engagement Unit earned the Unit of the Year Award, while Stephanie Hynes received the President’s Award. A special Lifetime Achievement Award was presented to Dave Morris for his decades of service in Spokane County and statewide leadership.

WR congratulates all award winners for their commitment to building safer, stronger communities and thanks everyone working to advance crime prevention efforts across our state.

Shawn Sinnett’s home was searched, and a large amount of evidence was seized. Photo credit: Grays Harbor County Sheriff’s Office  

Grays Harbor man sentenced for leading organized retail theft operation

A Grays Harbor County man has been sentenced to more than 14 years in prison following his conviction for leading an organized retail theft and trafficking operation that targeted local stores.

On August 29, a jury found 48-year-old Shawn Sinnett of Aberdeen guilty on multiple felony counts, including leading organized crime, organized retail theft, trafficking in stolen property, and money laundering. Prosecutors presented evidence showing that Sinnett recruited individuals struggling with addiction to steal merchandise from area retailers, including Home Depot and Walmart. He then sold the stolen goods online for profit.

The case, prosecuted by the Grays Harbor County Prosecutor’s Office, stemmed from a February investigation by the Grays Harbor Drug Task Force, Aberdeen Police Department, and the Grays Harbor County Sheriff’s Office. A search warrant at Sinnett’s home uncovered substantial evidence linking him to the operation.

Sinnett’s 14-year, three-month sentence reflects growing attention to organized retail theft rings that harm businesses and communities across Washington. Local law enforcement agencies credited strong collaboration among partner organizations for helping bring the case to a successful close.

Photo credit: California Highway Patrol

Organized retail crime rings target everyday essentials

Organized retail crime continues to challenge retailers nationwide, with losses estimated at $94.5 billion annually, according to the National Retail Federation. Unlike casual shoplifting, these crimes are carried out by coordinated groups who steal large quantities of merchandise to resell through online marketplaces or informal networks, creating a growing underground economy.

Retailers including Walmart and Target have increased security measures in response, locking up common household items like detergent and razors that have become prime targets. Experts say these groups often specialize in specific product categories and use quick, repeat thefts to maximize profit. Stolen goods are frequently sold on platforms such as eBay and Facebook Marketplace, or even to unsuspecting legitimate businesses.

The most targeted items tend to be those that are small, valuable, and easy to resell. Top categories include over-the-counter medications, cosmetics, designer clothing, electronics, infant formula, and household cleaning supplies.

Retailers and law enforcement agencies continue to collaborate on solutions, including better data sharing and enhanced penalties, to curb the rising impact of organized retail crime on businesses and consumers alike.

Walmart to remove synthetic dyes and over 30 ingredients from private brand foods

Walmart U.S. has announced plans to eliminate synthetic dyes and more than 30 additional ingredients, including certain preservatives, artificial sweeteners, and fat substitutes, from all of its private brand food products. The change will affect well-known lines such as Great Value, Marketside, Freshness Guaranteed, and bettergoods.

According to Walmart U.S. President and CEO John Furner, the move reflects customer demand for simpler, more familiar ingredients and supports the company’s commitment to offering affordable, high-quality products. A recent customer survey found that more than half of Walmart shoppers review ingredient lists and seek greater transparency in their food choices.

This initiative is one of the largest private brand reformulations in retail history, with 90 percent of Walmart’s private brand foods already free from synthetic dyes. The company is working closely with suppliers to reformulate products while maintaining the same taste and value customers expect.

The updated products will begin appearing on shelves in the coming months, with full implementation expected by January 2027. Walmart’s action underscores a broader retail trend toward transparency, quality, and consumer trust in food production.

NBCNews.com

Photo credit: Michael's

Michaels revives Joann brand through new in-store concept

Michaels is giving new life to the Joann brand name after purchasing its intellectual property earlier this year. The retailer has introduced a “Knit & Sew Shop” concept in its U.S. and Canada stores, featuring Joann-branded signage and popular products like Big Twist yarn. The new shop format occupies about a quarter of each participating Michaels location and is now available in more than 800 stores, with plans to expand to 250 more.

CEO David Boone said the addition reflects strong customer demand for the types of crafting and sewing products Joann was known for. The effort also represents Michaels’ first “store within a store” model and follows the closure of several specialty retailers, including Joann and Party City.

In a similar move, Michaels is launching “The Party Shop at Michaels,” offering an expanded range of balloons, party supplies, and children’s events at lower price points. Retail experts say the company is strategically filling a gap in the market for creative and celebration products.

Boone noted that customers remain engaged and optimistic, adding that interest in crafts, creativity, and community continues to grow as Michaels broadens its offerings in these categories.

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.

Renée Sunde, President/CEO — 360.200.6450 — Email

Crystal Leatherman, Dir of Policy & Government Affairs — 360.200-6453 — ‬Email

Rose Gundersen, VP of Operations & Retail Services — 360.200.6452 — Email