Newsletter — March 27, 2025 | | |
Remembering former Secretary of State Ralph Munro
Ralph Munro’s impact on Washington is immeasurable. His leadership and advocacy transformed the state, from improving access for people with disabilities to preserving public lands and protecting marine life. He was a champion for education, social services, and civic engagement, always working to create a more inclusive and forward-thinking Washington.
His dedication to public service set a high standard, and his influence will continue to be felt for generations. WR honors his legacy and the lasting contributions he made to our communities.
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Honoring former Speaker Frank Chopp
Proposed federal Medicaid cuts could significantly impact Washington state’s budget, potentially forcing lawmakers into a special session. The Republican-led U.S. House recently passed a budget that assumes an extension of the 2017 tax cuts while slashing spending on programs like Medicaid and Medicare by $880 billion.
Washington’s Medicaid program, Apple Health, covers approximately 1.9 million residents—around 20% of the state’s population. If Congress enacts a proposed one-third reduction in Medicaid funding, Washington could see:
- 61,000 rural residents lose health coverage
- 210,000 children lose insurance
- Nearly 1 in 5 seniors lose nursing home care
- Over 600,000 people lose health coverage
House Speaker Laurie Jinkins (D-Tacoma) warned that such drastic cuts could send the Legislature into “completely uncharted territory.” The state is already working to close a projected $6 billion budget gap, and additional Medicaid cuts could cost Washington billions more.
With the legislative session set to end April 27, uncertainty looms over how the state will respond if federal cuts materialize. For now, lawmakers remain focused on balancing the budget while preparing for the potential financial strain ahead.
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POLICY
ON THE LOCAL FRONT
RETAIL THEFT & PUBLIC SAFETY
IN THE NEWS
TRENDS
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What we are tracking — WR Legislative Hot List
WR is closely monitoring the bills that have advanced through the legislative process. Each week, we’ll spotlight our weekly “hot list” key legislation that could have the most significant impact on WR members.
Public Safety, Retail Theft, Organized Retail Crime (HB 2015)
HB 2015 Improving public safety funding by providing resources to local governments and state and local criminal justice agencies. This bill focuses on local government funding for public safety. WR continues to closely monitor this bill and engage when necessary to ensure our members interests are represented and addressed throughout the legislative process
Position: Support
Status: March 27, 2025: Scheduled for executive session in the Senate Committee on Law & Justice at 10:30 AM
House and Senate Tax Packages:
Financial Intangibles Tax - Wealth Tax (SB 5797)/ (HB 2046)
SB 5797
- 1% tax on assessed value of certain financial assets held by individuals with more than $50 million of these assets.
- Estimated to impact 4,300 taxpayers.
- Applies to both financial intangible assets and nonfinancial intangible assets.
- "Financial intangible assets" include cash, cash equivalents, and various financial investments like bonds, stocks, mutual funds, options, futures, commodities, and ownership units in business entities.
- "Nonfinancial intangible assets" cover intangible property beyond financial assets, such as trademarks, patents, copyrights, trade secrets, licenses, customer lists, goodwill, reputation, and private service or sports contracts.
- $4 billion per year starting in fiscal year 2027
Position: Oppose
Status: March 21, 2025: First reading, referred to Ways & Means
HB 2046
- 0.8% tax on assessed value of certain financial assets held by individuals with more than $50 million of these assets.
- Estimated to impact 4,300 taxpayers.
- "Financial intangible assets" include cash, cash equivalents, and various financial investments like bonds, stocks, mutual funds, options, futures, commodities, and ownership units in business entities.
- $2 billion per year starting in fiscal year 2027
Position: Oppose
Status: March 21, 2025: First reading, referred to Ways & Means
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Democrats unveil multi-billion tax packages
Senate Democrats have unveiled a $17 billion slate of new taxes to support their budget. Measures include taxes on wealth (SB 5797), payroll (SB 5796), and property (SB 5798), in addition to repealing 20 tax incentives (SB 5794) and reducing the sales tax by 0.5 percent (SB 5795). Hearings on the entire tax package are scheduled for March 31.
House Democrats have released a proposed tax package dedicated to education funding and public services to reinstate cuts from the Inslee budget. The package overlaps with the Senate by including a wealth tax (HB 2046) and property taxes (HB 2049). However, it differs by imposing a 3% cap on property taxes, whereas the Senate has no cap. Instead of including a payroll tax, the House relies on a business and occupation tax increase for income over $250M and moves the tax rate for financial institutions from 1.2% to 1.9% (HB 2045). The House does not reduce the sales tax.
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Proposed formaldehyde restrictions in cosmetics: Open for comment
The Washington State Department of Ecology is proposing a new rule, Chapter 173-339 WAC, to restrict intentionally added formaldehyde-releasing chemicals in cosmetic products. Formaldehyde is known to cause cancer, impact brain function, and increase asthma risk, making these restrictions crucial for consumer safety.
Public input is essential in shaping this regulation. The department is hosting two online public hearings to gather feedback:
Interested parties can also submit written comments online until April 11, 2025, at 11:59 PM PST. After the comment period, Ecology will review feedback and finalize the rule, with a decision expected in August 2025.
Retailers and industry stakeholders are encouraged to participate in the process to ensure their voices are heard. For more details, visit Ecology’s rulemaking webpage.
| | Photo by Washington State Standard | | |
Packaging recycling bill appears to stall in House
SB 5284, the extended producer responsibility (EPR) bill for packaging, sponsored by Senator Liz Lovelett (D-40), appears to have stalled in the House. The bill, which passed the Senate on a mostly party-line vote (27-22), has yet to be scheduled for a vote in the House Environment and Energy Committee.
A public hearing on March 17 drew testimony both in support and opposition. New estimates from California’s EPR program place costs at over $36 billion, raising concerns about potential costs for Washington. Notably, no other state has fully implemented such a program.
While SB 5284 includes a needs assessment, it also adopts a comprehensive EPR packaging recycling program. A phased approach, conducting a county-by-county needs assessment and a thorough cost-benefit analysis while learning from Oregon and California’s challenges, could be a more prudent path forward. Both states have approved similar legislation but are struggling with implementation.
WR represents members with diverse perspectives. Some fully support the bill, others oppose it as written, and many seek modifications.
A key question remains: Will legislative leadership classify SB 5284 as Necessary to Implement the Budget (NTIB)? If so, the bill would be exempt from standard cutoffs and can be considered until the final Operating Budget is approved, typically in late April.
WR will continue engaging with members, stakeholders, and legislators on this important issue. Even if SB 5284 is not adopted this session, we anticipate it will resurface in the future.
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Tobacco & Nicotine Tax proposals could backfire on Washington’s budget goals
Washington lawmakers are considering two major tax proposals, HB 2033 and HB 1416, that target tobacco, vapor, and nicotine products. While both bills are being discussed as “necessary to implement the budget” (NTIB) and are projected to bring in significant revenue, there’s strong evidence that increasing taxes in this space may drive more consumers to the unregulated market, leading to greater revenue losses in the long run.
What the Bills Would Do
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HB 2033 would impose a new tax on nicotine pouches, which are currently untaxed in Washington. The goal is to treat these emerging products similarly to other nicotine-delivery methods in the tax code.
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HB 1416 proposes increasing the tax rates on cigars, vapor products, moist snuff, and other tobacco products. The bill raises the overall tobacco tax rate from 95% to over 100% and increases the cap on per-cigar and per-milliliter taxes on vapor liquids.
Revenue Projections vs. Reality
Lawmakers project that HB 2033 could generate approximately $50.4 million in new revenue over the next two years, while HB 1416 is expected to bring in around $25.2 million during the same period. These figures, however, reflect gross projections and do not account for the costs of implementation, enforcement, or economic displacement.
More importantly, these projections overlook a critical reality: Washington is already one of the leading states in the nation for tobacco and nicotine product smuggling. Without addressing this ongoing issue, increasing taxes could unintentionally push more consumers toward untaxed, unregulated, and illicit markets—undermining both the state’s public health goals and the projected revenue gains these bills are intended to deliver.
According to research from the Tax Foundation:
- Washington ranks the 5th in the nation for smuggled tobacco and nicotine products.
- In 2022 alone, Washington lost an estimated $179 million due to tobacco smuggling
- The state forfeited approximately $4.3 billion between 2007 and 2022 in lost tobacco tax revenue.
- States with higher excise taxes consistently see higher rates of smuggling, particularly when neighboring states have lower taxes or no taxes on certain products—such as nicotine pouches.
In short, increasing taxes on tobacco, nicotine, and vapor products could worsen the unregulated market, hurt legitimate retailers, and cost the state far more than it hopes to collect. The Washington Retail Association will continue engaging with lawmakers and providing updates as these proposals move forward.
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Judge strikes down Washington’s Natural Gas Initiative
A King County Superior Court judge has overturned I-2066, a voter-approved measure aimed at preserving natural gas access in Washington. Judge Sandra Widlan ruled that the initiative violated the state’s single-subject rule and failed to fully outline changes to existing laws, making it unconstitutional.
I-2066 sought to prevent local and state restrictions on natural gas by undoing recent energy code updates and repealing provisions of HB 1589, which supports Puget Sound Energy’s transition away from natural gas. The measure also mandated continued natural gas access for customers.
Opponents, including Climate Solutions and Washington Conservation Action, argued that the initiative improperly combined unrelated issues, a tactic known as "logrolling." Environmental advocates hailed the ruling as a victory for clean energy, while initiative supporters, including the Building Industry Association of Washington (BIAW), vowed to appeal to the state Supreme Court.
With the court’s decision, the legal battle over natural gas access is far from over.
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Join an upcoming webinar on April 24 at 1 p.m. ET to learn how this plan can help you and your employees achieve retirement readiness. Don’t miss this opportunity to explore a smarter, more efficient retirement solution.
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Bad news week for Seattle Mayor Harrell
It has been a rough week for Mayor Bruce Harrell as he launches his reelection campaign, with multiple news stories casting his administration in a negative light.
First, the Mayor’s niece, Monisha Harrell, who served as Senior Deputy Mayor during her uncle’s first 18 months office, spoke to KUOW about what she described as a toxic work environment in the Mayor’s office.
Ms. Harrell stated that male staff often bypassed her to gain the Mayor’s approval. “I wasn't being trusted to do my job, and that is a really difficult thing to do,” she explained. “You can't be successful in your role without having the support of those around you.”
She also suggested that the Mayor was more focused on being a figurehead than on actively engaging with policy.
The KUOW reporter spoke with six other women connected to the Mayor’s office, all of whom corroborated Monisha Harrell’s account of a “boys’ club” culture where women were condescended to and excluded from key meetings despite their roles.
Monisha Harrell now serves as the director of King County’s Office of Equity, Racial and Social Justice.
In a second wave of bad press, Publicola published an article about multiple women alleging that the Mayor’s former Director of External Affairs, Pedro Gomez, sexually assaulted them. This news first broke in September 2024, when Gomez was put on paid administrative leave after a co-worker alleged that he raped her in June 2024. He resigned from the Mayor’s office in January 2025, when the King County Prosecutor’s Office Special Assault Unit began a review of the case.
Several women came forward after reading about the initial allegation, describing similar experiences with Gomez. They recounted unsettlingly familiar details, being taken to the same Capitol Hill restaurant, plied with drinks, and subjected to his claims of part-ownership in the business.
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Public safety measure gains strong support
HB 2015, which focuses on public safety funding and local government financial tools, was heard this week in the Senate Law and Justice Committee. Prime sponsor Rep. Debra Entenman (D-47) testified in support of the bill before a packed hearing room.
WR joined a broad coalition, including the Governor’s office, law enforcement, prosecutors, cities, and counties, in emphasizing the urgent need for this measure. Many local governments are struggling to fund public safety services, with some jurisdictions allocating up to 75% of their budgets to these efforts. King County Sheriff testified that the County is facing a $150 million shortfall, which would force a layoff of 80 deputies.
Retailers must provide a safe working environment for employees and an enjoyable shopping experience for customers, yet organized retail crime continues to pose a significant threat.
Public safety is a top priority at all levels of government, federal, state, and local. WR urges the Senate and the full Legislature to pass and fully fund HB 2015. Our state, retailers, and communities depend on it.
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REI expands Lynnwood presence with new, larger store
After two decades at Alderwood Mall, REI has closed its store and is preparing to open a new, expanded location in Lynnwood. The new store, located at 196th Street Southwest and Alderwood Mall Parkway, is set to open on March 28 at 10 a.m.
Nearly doubling in size to 39,480 square feet, the new REI will feature an upgraded bike and ski shop, a larger backstock area, and a more efficient loading dock. Additionally, a new community room will allow for in-store classes and workshops.
Grand opening celebrations are planned for April 4 and 5, featuring giveaways, music, and appearances from outdoor brands.
| | Richard Dickson, CEO of Gap Inc. Courtesy of Gap Inc. | | |
Revitalizing Gap: A fresh start under Richard Dickson
Richard Dickson, the visionary behind Barbie’s resurgence, is now set to lead Gap Inc. as CEO. Given his success in modernizing Barbie by aligning it with values that resonate with younger generations, he has an opportunity to do the same for the struggling apparel brand.
Prioritize Sustainability
Today’s consumers, especially Gen Z and Millennials, demand eco-conscious brands. Gap can take the lead by focusing on sustainable production, higher-quality materials, and ethical labor practices. Reducing waste and investing in durable fabrics could position Gap as a leader in responsible fashion.
Return to High-Quality Classics
Gap built its reputation on durable denim and timeless basics. By shifting back to well-crafted, long-lasting garments, Gap could differentiate itself from fast fashion and rebuild consumer trust. Investing in better materials and craftsmanship would also allow the brand to command higher prices while maintaining value for consumers.
With Dickson at the helm, Gap has a chance to reclaim its place as a staple of American fashion. The key? A strong, value-driven approach that resonates with today’s shoppers.
| | A Target employee wearing a mask works in an aisle of toys. Courtesy of Target | |
Five years after the pandemic: Is retail back to normal?
Five years after the pandemic lockdowns, the retail industry has seen significant recovery, but true "normalcy" remains elusive. While stores are open, inventory is flowing, and inflation has decreased, uncertainties in the economy and political instability are still causing anxiety for both consumers and retailers.
The pandemic disrupted shopping habits and reshaped consumer expectations, with many prioritizing experiences over products in the early recovery stages. Retailers struggled to adapt to these shifting demands, but have slowly begun to refocus on in-store experiences as customers have shown a willingness to return to physical stores.
Consumers now hold more power than ever before, influenced by technology and evolving expectations, especially regarding price and value. Despite this, inflation, economic distortions, and policy changes have led to cautious spending. Consumer confidence has sharply dropped in 2025 due to fears of tariffs and ongoing economic instability.
While the retail sector shows signs of recovery, especially with reduced inflation, the broader economic uncertainty is still preventing a return to "normal." Experts warn that the pace of change and unpredictable political developments make it difficult to define what normal even looks like anymore.
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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.
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Renée Sunde, President/CEO — 360.200.6450 — Email
Mark Johnson, Sr. VP of Policy & Government Affairs — 360.943.0667 — Email
Crystal Leatherman, Dir of Local & State Government Affairs — 360.200-6453 — Email
Rose Gundersen, VP of Operations & Retail Services — 360.200.6452 — Email
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