The Washington State Legislature convened on Jan. 12, and businesses should be worried.

Faced with a mid-biennium budget deficit, legislators seem more interested in solving the problem by taking actions that will make doing business more costly, instead of focusing solely on reducing spending, which continues to grow. Simply put, the Legislature, which depends on business tax dollars to fund its programs, can't solve its deficit by making it harder for businesses to stay in business.

Some of the top legislative items being discussed this session could impact businesses and employers through tax increases and rising health care and energy infrastructure costs, explains Morgan Irwin, vice president of government affairs at the Association of Washington Business.

"We have a budget shortfall of somewhere around $1.5 billion based on the nonpartisan staff report from the Office of Financial Management," says Irwin. "To fill that, you either need to cut spending or you need to raise revenue."

Some aggressive tax proposals are expected to emerge notes Irwin, including a 9.9% state income tax on households earning over $1 million of adjusted gross income. A separate wealth tax is focused on taxing intangible financial assets, and there's an anticipated high-wage earner tax that would tax employers that pay employees over a certain wage.

Irwin notes that Gov. Bob Ferguson has also proposed a plan to repeal two tax breaks, which together are expected to raise about $130 million for the state's budget while at the same time increase expenses for companies and employers: one is for pharmaceutical wholesalers and the other for data center maintenance.

"We've seen increases as high as 35% year-over-year for employee health care plan costs for the employer," Irwin says. "There will be a number of bills that are looking at that in the Legislature this year."

Faster permitting is another area of focus for employers this session, as permitting for any type of a project in Washington state is an arduous and expensive process, he notes.

"The actual cost to do things like an environmental impact statement or all of the different studies that can be required on a given project, it drags the timelines out and makes them extremely expensive to build, which just means that a lot of businesses choose either to not expand and build that new facility or they choose to build that new facility, but they do it in another state," Irwin says.

After a session last spring that brought some of the largest tax increases in state history, now is the time to look exclusively at the ever-growing spending side of the ledger, and, for goodness sake, not make it more difficult for the businesses and employers that fill the state coffers.