Newsletter February 9, 2023

IN THIS ISSUE

POLICY

ECONOMY

ON THE LOCAL FRONT

SAFETY

Mobile phone use policies are smart business

The WR staff and Board of Directors are meeting on February 15 in Olympia, WA.

Look for the next Inside Washington Retail newsletter on February 23.

Legislative Update

Today marks the 31st day of the 105-day session, and WR's policy and government affairs team are continuing to review bills closely. As of today, legislators have filed 1,941 bills, an increase of 88 over the previous week.

HB 1155 aims to safeguard the privacy of health data with regard to its collection, sharing, and sale. WR has major reservations about the bill in its current form due to its overly broad scope. The bill could hinder access to low-cost healthcare, which has been a key objective in recent years. The excessive and overly broad restrictions and requirements, such as those related to geofencing, consent, and deletion obligations, would create an unequal playing field. The substitute bill was passed in the House Committee on Civil Rights & Judiciary and is awaiting action by the full House.

HB 1363/SB 5352 Would allow Law Enforcement to safely pursue suspected criminals. WR supports these two bills. The bills are awaiting committee votes.

SB 5056 Increases penalties for habitual and repeat offenders, requiring a person found beyond a reasonable doubt to be a habitual property offender to be sentenced to an additional 24 months. WR gives its full support to this bill. This bill is scheduled for a possible vote in the Senate Committee on Law & Justice at 8:00 AM today, February 9.

HB 1131 and SB 5154 would enact the Packaging Extended Producer Responsibility—also known as the WRAP Act—and create a beverage container reimbursement (BCR) program. WR is working with stakeholders on the definition of “producer” and sharing comments on improving the BCR program. WR supports the voluntary nature of the takeback sites. These bills have been referred to the House appropriations and Senate Ways and Means for review.

HB 1137/SB 5368, which WR drafted and strongly supports, would allow injured workers to return to light-duty work thru approved non-profit organizations if there is no light-duty work available with their employer. If passed, the bill will create equitable access to return to work, which would be especially beneficial to frontline workers and small businesses. HB 1137 is scheduled for a possible vote in the House Committee on Labor & Workplace Standards tomorrow, February 10. SB 5368 passed out of committee and is awaiting action by the full Senate.

Legislature debates drug possession

On Monday, the Senate Committee on Law and Justice held a hearing on five bills that addressed the 2021 Washington State Supreme Court ruling impacting uncontrolled drug possession. The decision—known as “Blake”—allows the possession of any drug that is not under the control of the state, such as state-controlled cannabis and liquor sales. The Blake decision allows possession of illicit drugs such as cocaine, fentanyl, opium, and heroin, among others. In 2022, the Legislature passed a temporary—and unsuccessful—fix that attempted to guide people caught with drugs to seek treatment. This legal Band-Aid expires this summer.

Senate Bills 5022, 5035, 5467, 5536, and 5624 seek to increase treatment options and availability while at the same time imposing penalties for illegal drug possession. The bills range from imposing stiff sentences and felony charges, likely to include jail time, to a very lenient misdemeanor, which wouldn’t likely result in a sentence requiring time in jail. The argument for stiffer penalties is that they would incentivize convicted individuals to accept treatment over jail time.

Public safety, retail theft, and organized retail crime are often tied to illegal drug use and addiction. ORC crime rings prey on those suffering from substance addiction or mental illness. If we can get these individuals the treatment they need and deserve—or in extreme cases, put them behind bars—public safety would increase while we would see retail theft and ORC decrease.

WR strongly encourages the Legislature to approve these bills as part of a multi-pronged approach to dealing with these pressing issues.

WR testifies for unified national standard to address supply chain transparency

The Transparency in Supply Chains bill, SB 5541, was heard in the Senate Labor and Commerce on Monday. This bill has a noble intent of addressing the global need to prevent forced labor by requiring retailers and manufacturers to disclose key aspects of their business practices on their websites. These include product supply verification, supplier audit, direct supplier certification, internal accountability standards, and internal training.

WR testified with an “other” position because the issue of forced labor in supply chains was addressed when Congress passed the Uyghurs Forced Labor Prevention Act (UFLPA) in December 2021. In addition, other technical issues in this bill would inadvertently harm small businesses.

SB 5541 mirrors the CA Transparency in Supply Chain Act (Act). However, it lowers the threshold of covered businesses with over $75 million in annual global sales. This may require medium-sized retailers doing business in Washington to be subject to the act’s requirement should this bill become law. In addition, the bill would adversely affect small suppliers because they would have to certify that all of their materials are free of forced labor. Some small businesses, such as a local baker who supplies baked goods to grocers, would have no means to certify as required by this proposal.

The good news is that retailers have been working proactively to build a meaningful supply chain verification and certification infrastructure at the national and international levels to comply with the complex requirements of the UFLPA. Both federal enforcement and retailers are currently deep in the weeds of trying to verify their supply chains don’t involve forced labor, leaving product shipments stuck at ports.

Inslee open to drug possession and police pursuit law revisions

Washington state Governor Jay Inslee stated in an interview with John Carlson of KVI last week that he supports legislation aimed at reforming drug laws and police pursuits. The governor mentioned the legislative reform (SB 5476) that he signed into law in May 2021, which downgraded simple drug possession to a misdemeanor, allocated resources for the creation of a statewide treatment and recovery program, and obligated police to redirect individuals with substance abuse disorders to these services instead of jail.

As a temporary response to the state Supreme Court’s February 2021 “Blake” decision, SB 5476 threw out existing felony drug laws because they didn’t require the state to prove intent.

Agreeing with Carlson’s assertion that the system isn’t working and needs change, Inslee referred to the Supreme Court’s decision as a “grenade dropped into the system.”

According to the governor, the key to solving the drug problem is making more treatment and recovery facilities available, and that some people need to be forced into getting treatment for substance abuse.

In the interview, the governor also said that he is willing to give consideration to legislative revisions pertaining to police pursuits. Also signed into law by Inslee in 2021, HB 1054 limited vehicular pursuits by police unless there was a reasonable suspicion that a driver was impaired, an escaped felon, or had committed a violent crime or sex crime. Previously, the standard was probable cause.

WA Supreme Court holds hearing to decide legality of the State’s illegal and unconstitutional income tax

The Washington State Supreme Court held a hearing on January 26 to decide the legality of the capital gains “excise” tax. WR and the Opportunity for All Coalition (OFAC), the Building Industry Association of Washington (BIAW), and others continue to support the lawsuit to strike down Washington State’s illegal and unconstitutional income tax.

Former Attorney General Rob McKenna and his legal team did an excellent job presenting arguments against the faulty logic of a Washington excise tax on income derived anywhere in the country, violating both the constitution and the people's will.

McKenna asked the Court how this could be an excise tax if it’s reaching income and activity outside the State. “I thought it was it was a good sign that they [judges] were very interested in the Commerce Clause argument that the plaintiffs have made here that this tact violates the federal Commerce Clause by trying to extend Washington’s taxing power outside of the state,” he said in comments following the hearing.

Callie Castillo, a lead attorney in the case, commented after the oral arguments, saying, “The Supreme Court is considering whether the new capital gains tax is an excise tax, as the State claims it is, or an income tax, as the Superior Court held it to be. If it’s an income tax, it’s unconstitutional because income is property under Washington’s law, and it exceeds our state constitution’s limits on property taxes. If the Supreme Court rules that it’s an excise tax, it’s still unconstitutional because it taxes gains from anywhere in the country or world, beyond Washington State’s jurisdiction, in violation of the federal commerce clause.”

The Court’s decision on the matter is pending.

Recession unlikely with slight growth expected in 2023

According to an economist’s report last week, a recession is unlikely. The economy is expected to see slight growth this year, while consumers continue to navigate inflation and high interest rates.

Debates as to whether a recession is ahead will continue, as they did in 2022, but a downturn is not expected to result in an actual recession.

Following two consecutive quarters of negative numbers in the first half of the year, gross domestic product grew 3.2% year-over-year in the third quarter and growth slowed to 2.9% in the fourth quarter. The year still concluded at 2.1% higher than 2021.

The National Bureau of Economic Research refused to declare an official recession because the decline in the first half of the year affected only certain sectors and there wasn’t a significant decline seen across the economy.

Read the report

Lowest unemployment since 1969

After months of talk about recession, last Friday’s jobs report caught many off guard with epic jobs data reflecting an astonishing labor market. The Fed has worked to slow things down, and for the most part, it is working. The spiking inflation rate has curbed, but some job sectors are cranking up, in stark contrast to what the recovery looked like two decades ago.

Week after week, news reports have shed light on vast layoffs in the tens of thousands. While economists expected jobs growth to decelerate, they have instead surged ahead, adding more than half a million jobs in January. The unemployment rate has plummeted to 3.4%, a level we haven’t seen since 1969.

A hiring slowdown was supposed to come with the Fed’s aggressive interest tightening, but it hasn’t materialized—leaving officials vexed.

Employers are also scratching their heads a bit. Wages are rising slower than inflation, and HR professionals say inadequate compensation is the biggest reason employees are leaving, according to research released last quarter by the SHRM Research Institute.

Ending homelessness in King County will cost billions

The woefully inadequate behavioral treatment system is a significant factor contributing to Seattle’s homelessness and crime issues. Seattle currently spends little money on mental health services because the responsibility lies mainly with the county and state. Depending on the day, the closest available psychiatric treatment bed may be as far away as Chehalis in Lewis County. Of note is that the King County Jail is the second largest mental health facility in the state—second to only Western State Hospital. Why? Because there is nowhere else to take people. The capacity issue also leaves no space for people caught committing retail thefts and other crimes.

Ending homelessness in King County will cost far more than the Seattle and county budgets have allocated. By comparison, it would be at least double what Governor Jay Inslee proposed to address homelessness throughout the state.

The King County Regional Homelessness Authority estimates the fix would take approximately $12 billion, including more than $8 billion in capital costs, up to $3.5 billion in annual operating costs, and tens of thousands more units of housing. This amount would take up most of the county’s current $16 billion budget.

Local officials say that these numbers, released this week in the authority’s proposed five-year plan, are likely not far off — but beyond what they would be able to fund.

The fund’s source is unclear, although Dones thinks that local jurisdictions would likely need the help of a Congressional appropriation.

Seattle, King County no longer require COVID vaccinations for employees while the state persists

King County and the City of Seattle announced this week that they have ceased requiring proof of vaccination against COVID-19 for employees, bringing closure to one of the final pandemic protections at both levels of government.

In a joint announcement, King County Executive Dow Constantine and Seattle Mayor Bruce Harrell announced the end of the vaccine mandates, which began in October 2021, citing guidance from their Public Health departments.

“Since the earliest days of the COVID-19 pandemic, King County’s policy has been to follow the science, listen to the experts, and protect life and health,” Constantine said in a news release . “Establishing a vaccine mandate for employees and contractors was critical to keeping employees and the public safe and keeping services flowing. Today our experts advise that immunity has reached a level that allows these requirements to be relaxed.”

Meanwhile, Governor Inslee insists that Washington State Employees remain vaccinated as a condition of employment.

Constantine also repealed the county’s emergency proclamation on Monday, bringing to an end the pandemic emergency protections in place since March 2020.

A total of 290 county employees were dismissed due to the vaccine mandate, including 103 from King County Metro and 51 from the Sheriff’s Office. The terminations, retirements, and leaves associated with the vaccine mandate disproportionately affected several departments, particularly the Seattle police and fire departments, which were already facing staffing challenges.

On Monday, the Seattle Times reported that a spokesperson for Gov. Jay Inslee said the governor currently has “no plans to modify or remove” the same mandate for state employees.

Downtown Seattle urgently needs new ideas for rebirth

By The Seattle Times editorial board

For a lot of people, the news last month that Nike shuttered its retail shop in downtown Seattle was met with passing interest.

For Matt Griffin and many other downtown boosters, the Nike store’s demise signified something deeper. The end of an era. The dusk of a once-glorious renaissance engineered back in the 1990s. A sobering call for city leaders to try something — anything — to pump some life back into Seattle’s sagging core.

Griffin has been a principal and managing partner in the Pine Street Group, a real estate development and management firm.

The Puget Sound Business Journal’s “2022 Executive of the Year,” Griffin was one of a core group of developers instrumental in getting downtown back on its feet after retailer Frederick & Nelson closed its doors in 1992. Formed in 1994, Pine Street Associates remade three downtown Seattle blocks, including renovating Frederick & Nelson into a flagship store and headquarters of Nordstrom; developing Pacific Place mall and a 1,200-car garage; and remaking Nordstrom’s former space into retail, offices, and condos.

From fears of blight emerged movie theaters and the Gameworks arcade and, in 1996, NikeTown, among other attractions.

Griffin was in the thick of it all. And now he’s doing a lot of noodling about what’s next.

“Downtown needs a shot in the arm, no doubt about it,” he said. “We need to think of new uses for downtown to bring people here. I don’t know the answer.”

Read the rest of the editorial

Mobile phone use policies are smart business

Distracted driving claimed 3142 lives in 2020. Due to the inherent dangers, handheld device use and texting while driving is illegal in the State of Washington.

It is essential for businesses that employ drivers to implement policies that discourage hands-free and prohibit handheld device use while operating company vehicles. Washington Retail urges companies without mobile phone use policies to create them as soon as possible. The National Safety Council recommends that these policies apply to all company employees.

Employees should only make calls or send texts while in the parking lot or during rest stops and never while driving. Employers should strive to create a workplace culture that encourages employees to wait until they have stopped their vehicles before responding. Employers should also educate employees on how to activate an auto-response message to incoming calls and texts while in transit.

RS SafetyTV has a short video playlist that answers common questions about mobile phone use and driving. These videos can supplement written materials for a safety meeting. You will find an eye-opening video to open a safety meeting about this topic here.

Our safety team is available to help members with safety plans and topics for safety meetings. Contact us 360-943-9198 x122, or safety@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.