Week 12 Legislative Report
Dear WSBPA Board and Members:
As we enter the final weeks of the 105-day legislative session, both chambers have released their 2025-27 Operating and Transportation Budget Proposals, with significant tax and revenue implications for businesses across Washington. This report highlights key developments and potential impacts on bowling proprietors.
Budget Proposals and Legislative Updates as of April 6, 2025
State Budget Overview
The Washington State Legislature is currently in the final stages of budget negotiations for the 2025-27 biennium. The Senate unanimously passed a $7.3 billion capital budget on April 5. Earlier, on March 29, the Senate approved a $78.5 billion operating budget with a 28-21 vote, and the House approved with a 54-44 vote on March 31. However, the Senate refused to concur with House amendments, so it will be going to Conference Committee. The House also released its $77.8 billion operating budget proposal on March 24, 2025. The House budget proposal passed out of the House Appropriations Committee on March 27 with minor amendments. The two chambers have significant differences in their approaches to addressing the state's projected $15 billion budget deficit over the next four years. I will go over some of these differences during the April 8 WSBPA Zoom
Next Steps in the Budget Process
The budget process is now in its final stages, with several key steps remaining:
- Conference Committee Negotiations: A conference committee will be appointed to negotiate a compromise budget between the Senate and House versions.
- Final Budget Approval: The negotiated compromise budget must be approved by both chambers before April 27, 2025, the constitutional end date of the legislative session.
- Governor's Signature: Once passed by both chambers, the budget will go to Governor Ferguson for his signature.
Key Tax Proposals Affecting Business Owners
Property Tax Reform (SB 5798)
This bill would significantly modify property tax limitations by removing the 1% cap on annual increases without voter approval, instead tying increases to inflation and population growth with no upper limit.
Status: Public hearing held in Senate Ways & Means Committee on March 31, 2025
Potential Impact: Bowling centers that own their property could face substantially higher property tax bills in future years. Senator Braun has characterized this as potentially "blowing the doors off everyone's property taxes" - estimates suggest taxpayers could be paying double what they pay now had this policy been in effect over the past decade.
Business & Occupation Tax Changes
Several proposals would modify Washington's B&O tax structure:
- HB 2045: 1% surcharge on taxable income exceeding $250 million and increased surcharges for large financial institutions
- SB 5791: Increases general B&O tax rate from 1.75% to 1.8%
- HB 2038/SB 5799: New 0.4% B&O tax on social media platforms
Status: Various hearings scheduled through early April
Potential Impact: Direct impacts for bowling centers would depend on revenue levels, but the general business climate could be affected by these broader tax policy changes.
Alcohol Licensing Fees
SB 5786: Proposed increases to alcohol licensing fees directly affect bowling centers that serve alcohol. Current legislative discussion includes:
- Original proposal: 50% increase in all LCB fees
- Amended proposal: More modest increases for restaurants/venues (~$100 increase for many licenses)
- Current negotiation points: Finding balance between increases for various license types
Status: Scheduled for executive session in the Senate Committee on Ways & Means on April 8
Potential Impact: Bowling centers with beer, wine, and spirits licenses would see license fee increases. Beer and wine licenses for venues like bowling alleys would see a $200 increase (from $400 to $600). We have expressed concerns about this jump seeming excessive compared to other license types.
Employment Law Changes
Paid Family Medical Leave Expansion (HB 1213)
This bill would expand Washington's Paid Family and Medical Leave program with changes to job protection requirements and healthcare continuation.
Status: Scheduled for executive session in the Senate Committee on Ways & Means on April 8.
Potential Impact: Smaller bowling centers (currently those with under 50 employees are exempt from job retention requirements) may face new obligations, though there are efforts to maintain some exemptions for smaller businesses.
Unemployment Insurance for Striking Workers (SB 5041)
Extends unemployment benefits to employees involved in strikes and lockouts.
Status: Scheduled for executive session in the House Appropriations on April 8
Potential Impact: Potential increase in unemployment insurance costs for affected businesses.
Tourism Funding Cuts
Funding for tourism has been reduced from $9 million to $3 million in the budget proposals. This significant reduction comes as Washington's tourism marketing already lags behind neighboring states.
Potential Impact: Bowling centers that benefit from tourism, particularly those in visitor-heavy areas, may see reduced marketing support from the state.
Important Upcoming Dates
- April 8, 2025: Opposite House Fiscal Cutoff
- April 16, 2025: Opposite House Floor Cutoff
- April 27, 2025: Last Day of Session
Recommended Actions for WSBPA Members
- Property Tax Reform: Consider providing testimony or submitting written comments opposing SB 5798 if it advances further in the legislative process.
- Alcohol Licensing: Monitor developments on licensing fee structures and engage with stakeholders to ensure proportional increases across license types.
- WSBPA Call: April 8, 2025, 10:00 AM PDT (Zoom link).
We will continue to track these issues as they develop through the final weeks of the session. Thank you for your continued support and participation as we navigate these legislative challenges.
Thanks,
Lex Nepomuceno
(206) 801-1131
lex@incumbent.com
https://www.incumbent.com/