Bellevue Officials Take Stance Against Gregoire B&O Proposal

Bellevue city officials say that Gov. Chris Gregoire's proposal to centralize the state's B&O taxes would cost the city millions in lost revenue.

Last week, the governor proposed making the state of Washington the sole collector of all local and state B&O taxes, just as it is now for the sales tax, according to a press release from the state. The press release said that the plan would also create one single state website to apply for or renew state and local business licenses, which would eliminate the need for similar websites now operated by more than 50 individual cities.

“While we always take note of big business hiring, it’s small businesses that employ the vast majority of our workers,” Gregoire said in a prepared statement. “In fact, 95 percent of Washington employers have fewer than 50 workers. If we can make it easier and cheaper for them to do business, they can afford to add more employees. This is the key to our economic recovery and to our social fabric.”

You can read Gregoire's policy statement here.

However, Bellevue city officials said in a press release from this week that the proposal would cost the city from $1.6 to $6 million annually in lost revenue, depending on how the legislation is structured, which could mean dozens of layoffs and affect a range of city functions. 

“This proposal is a bad idea. It takes needed revenue away from our city by removing local control and putting control in the hands of the state,” said Mayor Conrad Lee in a prepared statement. “The governor’s plan would hurt real people and it would not help small businesses in Bellevue.”

The cuts would follow . The general fund budget already has been reduced a total of 6 percent from the previous biennial budget, according to the city.

Bellevue argued in its press release that 82 percent of Bellevue businesses are exempt from the B&O tax and don’t need to file a return because their gross receipts are $150,000 or less.

Bellevue is not the only city criticizing the proposal. The city of Seattle officials also recently argued that the proposal would cost it up to $43 million and would introduce greater opportunities for tax evasion if the tax is collected out of Olympia, according to Publicola.

However, the Washington Policy Center, a pro-free market state think tank, shortly after Gregoire's announcement of her proposal said that streamlining B&O collection would make things simpler and more uniform for local businesses.