March 9, 2010

Hello Policy Enthusiasts!

Given the recent bustle of activity in Olympia and our entreaties for NMTA members to take action on behalf of the industry, I wanted to send my regular Government Affairs E-Newsletter to all our members.  Typically this email goes out to a list of folks who have a particular interest in government affairs and boating.  If you would like to continue receiving the newsletter, please email me at marina@nmta.net. 

Thanks to all those who have gotten involved in our imperfect-yet-vital democratic process this year.  Many NMTA members wrote to their legislators in response to our call for action against distressing tax legislation. 

At the end of February, the Senate Democratic Caucus released its spending and tax proposal.  The tax package proposed to raise an additional $918M in the remaining year of the current biennium and more than $2M in the 2011-2013 biennium.  This represents about a 50 percent increase in the size of the tax increases in the current biennium over the proposal advanced by Governor Gregoire the previous week ($900M vs. $605M).

Of critical concern to our industry was the portion of the bill that would eliminate the current trade-in allowance on boats and vehicles.  This would have a harmful affect on both new and used boat sales in Washington State.  In addition, we are also threatened with a 0.3 percent increase in the sales tax. 

Fortunately, thanks to your calls and emails, the final version of the Senate budget bill (released on Sunday) did not alter the trade-in allowance for boats.  This is great news!

Another small victory for recreational boating was relatively painless passage of a bill to set the percentage of gas used by boaters at 1 percent for the Department of Revenue.  Taxes that boaters pay at the fuel pump, if not refunded, are sent to the Recreation and Conservation Office for boating related grants.  Setting the determined usage at 1 percent saves the state money by avoiding the costly determination study at DOR, and lends predictability to gauging how much money the boating account at RCO will get from now onward.

Unfortunately many proposed tax increases, including a sales tax increase of 0.3 percent, may also pass with flying colors.

I received copies of some very heartfelt letters and emails from members, describing the current state of the industry and what an increase in taxes would mean for their business.  I would like to quote at length one bit of correspondence between an NMTA member and their Senator:

“I read today of the proposal to eliminate the trade-in sales tax credit in Trade Only Magazine. Sen. Rodney Tom was quoted as saying ‘The vast majority of people have no knowledge that they’re even being given this incentive’.

As the owner of a small boat dealership [in Issaquah] for the past 21 years I can tell you his comment is about as far from the truth as is possible. Our industry has been hit incredibly hard in the past couple of years leading us to reduce our employment for the first time in our history. The only incentive for me to hire staff is to take care of our customers. We are all pressed to work harder and smarter and any reduction in potential sales will take a great toll on our ability to grow back to our former size.

Our customers and prospects understand intimately the sales tax incentive they are receiving. This incentive also allows us to ‘purchase’ via trade-in these boats at a value which will allow us to resell them…

I urge you to oppose the current proposal to eliminate the trade-in allowance on vehicles and boats. Please also oppose the proposed sales tax increase – and find ways to save the state money that won’t cripple the boating industry.”

In addition to the barrage of emails from our members, NMTA President George Harris also testified in Olympia in front of the Senate Ways and Means Committee.  George did a great job speaking before the committee.  He was also accompanied by testimonies from members of the Northwest Yacht Brokers Association and Recreational Boating Association of Washington.

All the right stuff

The past several weeks of government affairs activities have demonstrated to me that our association has all the right stuff.  We have a great lobbyist, Cliff Webster, who keeps us apprised of the very latest legislative actions, often to the minute.  I am also confident that he maintains a realistic and experienced view of the situation in Olympia; helping NMTA staff to make informed decisions at the right moments.

We also possess an engaged membership.  Over the years, as we have called our members to act on legislation, you have become more confident and experienced at reaching out to your elected officials.  Developing a relationship over time with your representatives in state and national government, by attending fundraisers, teaching them about the boating industry and your business is critical to success when it matters most.

Another critical component is our Government Affairs Committee.  The members of this committee serve as my “pulse on the industry,” advising NMTA staff on how to proceed on legislation and setting our government affairs priorities.  This session, our GAC helped me identify a tax proposal that had possible dire consequences for the recreational boating industry (regarding eliminating the tax exemption for out-of-state residents).  Because members of the committee were able to spot a potential issue that I might not have identified, Cliff and I were able to investigate further and eliminate this as a concern. 

You, who work on a day-to-day basis in the marine industry, know best.  For this reason, I encourage you to get involved in the GAC.  You are invited to attend our next meeting on Thursday, April 1st at 10:00 a.m. here at the NMTA office. (No joke.)

The end in sight!

Thursday, March 11th should be the last day of the Washington State legislative session.  Unless the Governor decrees an extension, our elected officials must get their bills passed and budgets reconciled by midnight on this date.  That will be tricky. 

The House of Representatives just passed its tax package, at 1:30 a.m. Tuesday, as a striking amendment to ESSB 6143.  Eight Democrats joined the 37 Republican House members in voting against the measure.  Now, the two budget bills of the House and Senate must be reconciled.  This will likely be done through informal meetings of the budget negotiators from both sides of the legislature.

Stay tuned.  In a couple of days we will know if the state has a balanced budget and if Washington consumers will be burdened with a .3% sales tax increase.

Get involved

If you are interested in getting more involved in NMTA and have an interest in politics as it relates to boating, I encourage you to attend our next Government Affairs Committee meeting on Thursday, April 1st at 10:00 at the NMTA office. Please RSVP to marina@nmta.net.

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