Manweller pushes for rural tax breaks

OLYMPIA - Boeing may have got a tax break, but now a local legislator wants to encourage businesses in rural areas too.

Rep. Matt Manweller, R-Ellensburg, sponsored a bill to revive a rural tax credit that expired in 2009, hoping it will lead to more diverse job opportunities.

"If we can do this for the big guys, can we be there for the small guys too?" he asked, referring to tax cuts approved for Boeing in a special session last year.

If passed, HB 2204 would affect businesses in manufacturing, research and development and vegetable seed conditioning. They'd get a deferral of sales and use taxes on new equipment or construction. After seven years, under certain conditions, the deferral would become a waiver.

Manweller said the bill is meant to be the "tipping point" to bring companies in to rural areas and prevent their economies from being overly reliant on one crop or industry.

"Many of our kids have to make a tough choice: You can take over your parents' farm, or you can leave home," Manweller said, testifying before the House finance committee last week.

He said the bill was estimated to cost the state about $8 million per biennium, but that it could also bring in revenue from business expansion and hiring, which couldn't be predicted.

House Finance Chair Reuven Carlyle, D-Seattle, encouraged the bill's sponsors to think about its costs and how the state could use that money for education and other issues.

Another version of the program defined eligibility based on unemployment rather than population density. Manweller said the change was meant to stabilize it because unemployment fluctuated so much.

HB 2204 defines rural counties as those with 65 to 100 people or less per square mile, or those that are smaller than 225 square miles.

Local business owners and agencies spoke in favor of the bill.

"We have used this sales and use tax deferral program in the past and we have seen firsthand how it works," Ron Cridlebaugh said, economic development director for the Kittitas County Chamber of Commerce. "This program is important to our rural communities to diversify their economies and provide local job opportunities in the rural areas."

Joseph Akers, of Chemi-Con in Moses Lake, said the tax exemptions would help them in a planned expansion, and that even a few more jobs make a difference in small towns.

"I'm passionate about where I live," Akers said. "I want my children, if they choose so, to be able to stay in the area and have a job."

HB 2204, if voted on and passed by committee, would need to be voted on by the entire House by Feb. 18.

Watch a short clip of Manweller talking about the rural tax credit proposal at the Young Professionals of the Columbia Basin's Meet Up, Jan. 8 in Moses Lake.