Employers need certainty in these uncertain times

House Republicans object to increased payroll taxes on employers, fear more job losses will result


House Republican Leader Richard DeBolt and Rep. Cary Condotta, Republican leader on commerce and labor issues, had the following to say about the state Department of Labor and Industries’ (L&I) announcement of a proposed 7.6 to 9.3 percent increase to employer workers’ compensation payroll taxes for 2010:

Statement from House Republican Leader Richard DeBolt, R-Chehalis:

“The Department of Labor and Industries’ decision to raise tax rates in this economy, and after our unemployment rate rose to 9.2 percent, is a prime example of an out-of-touch leadership in Washington state. It is disappointing to see government agencies further burden our struggling employers.

“The agency needs to ask if its policies will help or hurt employers and employees. A proposed 7.6 percent increase would cost employers $117 million in higher payroll taxes. The total cost of the agency’s workers’ compensation proposal is $270 million, leaving $153 million to be paid for using the agency’s contingency fund, which is already below the reserve limit. This increase will take money out of the pockets of employers who could better use it to create jobs or give employees pay raises to cover the rising costs of food, health care and other basic necessities.

“Before increasing taxes on employers to pay for a broken system, state leaders and agencies should take into account the impact the higher costs will have on our economy and job creation. It’s time the state becomes a partner with employers and employees, not a receptacle for more and more of their hard-earned money.”

Statement from Rep. Cary Condotta, R-East Wenatchee:

“As a small-business owner, I know firsthand the difficult choices that have to be made to keep employees on the payroll and keep the storefront open. An increase in workers’ compensation taxes, as was announced today, will push my business to the brink. Employers are making tough decisions to trim waste every day, and L&I should be doing the same.

“Before we give this monopoly, state-run insurance company more money, critical reforms must happen. The agency needs to get time loss and pension growth under control and in-line with other states if we want to make our state more competitive and attractive to employers – the people who create jobs. What we are getting instead is uncertainty and the fear of looming tax increases in January, from workers’ compensation taxes to minimum wage, which will only serve as job-killers. While workers’ compensation tax rates are falling around the country, L&I is proposing a multi-million tax increase at the worst possible time. Any tax increase in this economy is wrong.

“No matter when the recovery comes, the more the state piles on increased costs and taxes, the worse our unemployment outlook will be. After 27 years in business, I am downsizing my company, and even if the economy recovers, I will likely never expand again because of the increasing burdens the state is placing on employers.”

# # #

Editors note: House Republicans sent a letter to the governor regarding this issue last week.

For more information, contact:  Lisa Fenton, Communications Director – (360) 786-7728


Washington State House Republican Communications