Washington small and mid‑size business leaders warn rising costs, taxes and energy rules are harming employers

Moderated by Kelly Chambers, the U.S. Small Business Administration’s Pacific Northwest regional administrator, a panel of Washington business leaders on the Solutions Summit stage warned that rapid cost increases and policy changes are making it harder for small and mid‑sized employers to grow and stay in the state.

Michael Censke, president and CEO of Pearson Packaging Systems in Spokane, said his mid‑sized engineering and manufacturing firm is treated like a large employer by legislators and regulators. “We're a very successful company, but we're categorized as a large employer in the eyes of the legislature and subject to the same rules, the same taxes,” he said, arguing that that classification limits the company's ability to invest and expand locally.

Kevin Wallace, CEO of Wallace Properties, blamed compounding cost pressures including recent energy‑related rules and rising utility rates. He said those costs, together with higher taxes and housing shortages, are forcing developers and investors to reassess projects and, in some cases, move to more permissive cities. “If a city comes out with a policy that is basically going to eat my lunch and make it infeasible for me to develop, I go to the next city,” Wallace said, urging more collaborative local permitting and policy design.

Nate, vice president of Tiger Shop, a second‑generation manufacturer in Vancouver, described a “death by 1,000 cuts” of small firms’ budgets: rising minimum wages, payroll taxes, a health insurance premium increase he described as roughly $200,000 for his firm, and tariff‑driven input costs. “When you start looking at them together, the impact is huge,” he said, adding that his staff polled overwhelmingly against relocating even if the firm could move.

The panel also discussed estate tax volatility and business relocation. Censke said his company has begun a process to relocate operations to Idaho and cited changes in state tax regimes as a key factor; he mentioned a 5.395% income tax figure for a destination state in his remarks. Kevin Wallace and others singled out estate tax changes (which panelists said had briefly risen to 35% in a recent policy cycle before being reduced) as prompting owners to consider liquidation or moving assets out of state.

Panelists urged lawmakers to prioritize predictability and to seek input from small and mid‑sized employers when drafting rules. They pointed to local examples where officials and business groups worked together — Bellevue was cited repeatedly — producing a pipeline of housing projects and reducing permitting delays. Chambers closed the session by noting the importance of leadership and follow‑through.

No formal votes or policy actions were taken at the session; panelists offered recommendations for the next legislative session and responded to audience questions.