Newsletter April 22, 2021 IN THIS ISSUE Legislators poised to adopt major policy and fiscal measures Lawmakers race toward Sunday Session adjournment A wake-up call to Seattle City Council members? On Earth Day, retailers show the way Join small business owners for town hall May 4  How do you wow your customers? WR makes it easy to educate your employees with SAFEME COVID training

Legislators poised to adopt major policy and fiscal measures Mark Johnson, Senior Vice President of Policy and Government Affairs As the 2021 “virtual” Legislative Session heads to a conclusion by Sunday, many major policy bills and fiscal initiatives are likely to be approved. A new capital gains tax of 7% appears to be heading to the Governor who is expected to approve it. Speculation is that a court challenge will ensue and the measure’s constitutionality will be decided by the state Supreme Court. Two major environmental tax proposals are likely to pass and be signed by the Governor. The cap and trade and a low carbon fuel standard – both bills will significantly increase the cost of fuel substantially and hurt lower income Washingtonians. A major, 16-year, $15 billion transportation tax and spending package was awaiting House approval at the writing of this article. It includes everything from a 10 cents per gallon gas tax increase (yes on top of the other two gas tax increase bills) to a tax on auto parts and accessories. Again, this package is extremely regressive, hurting lower wage earners the most; people who often drive older, less fuel-efficient vehicles for further distances. A bill to decriminalize all drug possessions of any substance – stemming from a court decision – is likely to be enacted. What could this do to employer/employee relationships? Unemployment insurance relief of $500 million hopefully will be approved soon and provide some targeted relief to businesses struggling to overcome the coronavirus pandemic and its effects. A two-year operating budget that spends all our reserves and sets us up for budget shortfalls in the future is all but certain – even considering higher-than-expected revenue increases and lower state expenses. No matter how you look at it – this will be a session for the record books. It is anticipated the Legislature will adjourn on time – Sunday, April 25 – the 105th day of the session.

Lawmakers race toward Sunday Session adjournment Adoption of a new state budget has dominated state Legislature debate this week with the 2021 remote Session adjournment scheduled on Sunday. Because state revenues have exceeded expectations set during the COVID-19 pandemic and that state budgets are forecast to be balanced in the next four years, Washington Retail has urged that no new taxes be imposed that would slow the needed economic recovery. Since January, WR also has tracked results on numerous retail-related bills that could affect companies and employees. Please note that legislative action can be spontaneous and challenging to anticipate. Therefore, outcomes here were up to date at the time of writing. Here is a summary of bills most important to WR: House bill 1332 has been signed into law by Governor Inslee. It allows qualified businesses that apply on a special state form by Friday of next week to be considered for an extension of time to pay property taxes. It applies to businesses that sustained a loss in revenues of 25% or more during the pandemic. Washington Retail supported the bill. House bill 1539, bad debt sales tax exemption. WR opposes this bill that would narrow the business and occupation tax deduction and sales and use tax credit and refund available to sellers for customers who fail to pay taxes on purchases. If approved, it would reverse a state Supreme Court decision upholding the measures. It is alive until adjournment because it is related to adoption of a new state budget. Senate bill 5355 has been signed into law by Governor Inslee. It allows a lien to be placed on a business for alleged violations of wage obligations to employees. Washington Retail opposed the bill. Senate bill 5062, Washington Privacy Act. After Senate passage, the bill sponsor is trying to revive the bill in the House. The two houses disagree on how the protection of consumers’ private online purchasing information should be enforced. If the bill does not move, the subject will be considered again during the 2022 Legislative Session. Washington Retail supports the Senate bill. Senate bill 5191, price gouging. Both the House and Senate have passed similar bills that seek to control price increases during emergencies such as the pandemic. However, the two chambers are trying to decide the final language of a bill. If they cannot agree, the bill will die for this year. WR has worked closely with stakeholders on improving the bill. The Legislature has passed House bill 1161 that would expand the prescription drug take-back program throughout the state. The bill now goes to the Governor for signature. WR supported the bill. The Governor has 5 days, excluding Sundays, to take action on any bill passed by the Legislature, provided adjournment does not occur within those 5 days. Washington Retail will provide a comprehensive report for members on the outcome of all retail-related bills following adjournment.

A wake-up call to Seattle City Council members? Seattle’s budget director Ben Noble shared a cold dose of reality this week with the City Council: while economic recovery from the pandemic is underway, it’s happening slower than the nation as a whole in Seattle. The details of Noble’s report were captured in Seattle City Council Insight, an online newsletter that serves as a council watchdog. Unlike this week’s press releases from the mayor and council members that touted ways to spend an additional $40 million in revenue evident in Seattle’s latest budget update, Noble has been urging the council to guard against overspending. Insight quoted a memo by Noble urging fiscal austerity. The coronavirus, with its erratic spikes in infections and hospitalizations, adds continuing uncertainty to the budget and devastated industries such as tourism, hospitality and construction that need council attention to improve Seattle’s economic health, it suggests. Noble’s memo warns that future city revenues could be hurt by Seattle’s controversial payroll tax and the downturn in Boeing business, the full effect of which also is uncertain. Insight Editor Kevin Schofield observed that the current council has focused the budget on helping the unemployed and homeless through the pandemic while overlooking the needs of the business community. Seattle’s “saving grace,” he wrote, has been retail, namely Amazon and the city’s e-commerce and tech companies that saw employment gains last year to cushion record unemployment statewide. Schofield also noted from Noble’s report: Job postings for the Seattle area are lagging the rest of the country, as is consumer spending. Breaking out employment by sector, the leisure/hospitality and manufacturing industries, Boeing included, have been damaged during the pandemic. The construction industry, which contributed more than $100 million in sales and business and occupation taxes to Seattle’s economy in 2019, dropped by more than $10 million as the pandemic took hold last year. Commercial real estate excise taxes fell nearly 57% last year and are expected to remain low the next couple of years. The numbers in Seattle’s budget don’t lie. While revenues are growing again, a deeper dive into the budget reveals issues that demand attention. Schofield concluded that the budget mandates a refocusing or council reset to new priorities: economic development and job creation, recovery for the hollowed-out retail core and a targeted commitment to help recover tourism, leisure/hospitality, and commercial construction. Retailers welcome Seattle’s gradual economic recovery. Its economic health extends to the Puget Sound region and Washington State. Heading forward, how the council spends the money it’s collecting will play a major role in determining how soon companies and employees can recover from the pandemic.

On Earth Day, retailers show the way Today is Earth Day, started in 1970 to annually raise awareness of environmental issues. Retailers increasingly honor the day throughout the year. National chain stores and smaller retailers alike are delivering environmental, social and community benefits every day. Retailers sell apparel made of organic cotton and sneakers made from recycled materials. Their freezers are stocked with plant-based burgers and pizzas with plant-based toppings. Amazon and Best Buy are among more than 50 companies that have signed the Climate Pledge, committing to net zero carbon by 2040. As part of the pledge, they have agreed to regularly report efforts to eliminate and mitigate their contributions to climate change. McDonald’s has purchased enough solar power to power 8,000 McDonald’s restaurants. It is even experimenting with a net-zero-energy McDonald’s at Walt Disney World. Walmart, which is on its way toward powering 100 percent of operations with renewable energy, is also making it easier for its suppliers to buy renewable energy. Three retailers including Best Buy are on Barron’s latest list of the most sustainable companies. You can hear a National Retail Federation podcast on this topic here. Read more.

Join small business owners for town hall May 4  Small businesses can register for a free, two-hour virtual Retail Advocates Town Hall from 11:30 a.m. to 1:30 p.m., (PT) on May 4 during Small Business Week. The National Retail Federation is co-sponsoring the event. Scheduled speakers are Nydia Velazquez (NY-07), Chairwoman of the U.S. House Small Business Committee and Blaine Luetkemeyer (MO-03), Ranking Member of the House Small Business Committee. Save your seat at the table with key leaders for discussions on retail’s future in public policy. Small businesses play a major role in the health of the U.S. economy. The Small Business Administration reports that small businesses employ 47% of the nation’s private workforce. More than 98% of all retail companies employ fewer than 50 people and 95% of retailers operate only one location. Register now.

How do you wow your customers? Retailers can increase shopper repurchase intent by nearly 60% by consistently delivering a great experience, a new survey has found. The Verde Group surveyed 9,400 consumers and found that what consistently “surprised and delighted” them was exceptionally great service, said CEO Paula Courtney. That great service can be as heroic as a sales associate going above and beyond to help a customer find just the right item, or as mundane as a clean, well-organized store. The study outlined “wow” experiences that include fast, free shipping; easy returns; problem-free shopping; well-stocked inventory; a great app or website for online shopping; attention to detail in packaging. Read more details and listen to a related podcast here.

WR makes it easy to educate your employees with SAFEME COVID training Now that the state is beginning to open with higher occupancy, L&I’s safety inspection is not letting up. To avoid rolling back or fines, the answer is to stay vigilant with employee training through an L&I approved training platform. The Washington Retail Association offers a free web-based and smartphone app, COVID-19 training with 10 lessons. These lessons include videos and a quiz that covers: general information about COVID-19 operation preparation checklists employee health screenings confirmed case procedures personal protective equipment masks signage HVAC systems, and alternative options for customers  The SAFEME COVID-19 safety training certificates earned by employees are evidence of required safety training from employers. While geared towards retail, the topics are universal to many industries. The free SAFEME app is available at www.wrasafeme.org and downloadable for Apple and Android phones through the app stores. A one-minute video about the course can be seen here. SAFEME COVID-19 was funded in partnership with the Department of Labor & Industries for employer outreach and education. It is aimed at workers involved in retail stores, professional services, eating and drinking establishments.  Rick Means, WR’s Director of Safety & Education, is available to members to assist with L&I safety compliance, help drawing up safety plans and suggest topics for safety meetings. Contact him at 360-943-9198 x18, or rmeans@waretailservices.com

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.

Washington Retail Staff

Renée Sunde President/CEO 360.200.6450 Email Rose Gundersen VP of Operations & Retail Services 360.200.6452 Email Mark Johnson Senior VP of Policy, Government Affairs 360.943.0667 Email Jim Szymanski Director of Communications 360.753.8742 Email

www.WashingtonRetail.org

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