Washington is considered one of the most expensive states in the nation when it comes to the cost of gas, housing and healthcare. It has the fourth highest average grocery prices in the country, and 55 percent of residents face food insecurity. And officials from the Washington Food Industry Association note that grocers and consumers here may likely be facing even higher costs relating to food after this year’s legislative session.
“Gov. Bob Ferguson signed a two-year, $78 billion operating budget in May, the largest tax increase in state history. Many pieces likely will have a financial impact on grocers – we just don’t know what the numbers are right now,” said Tammie Hetrick, president and CEO of the WFIA.
“This was probably one of the worse sessions we’ve had in my 25 years. I requested more vetoes this year than I ever had – and got none.”
Ferguson signed Senate Bill 5284 – often referred to as the Recycling Reform Act – into law, creating an extended producer responsibility program for packaging and paper products in Washington.
The measure shifts the financial and operational responsibility for managing the entire lifecycle of packaging and paper products from local governments and ratepayers to the producers (manufacturers and brands) that introduce the materials to the market.
Producers are required to form or join producer responsibility organizations by Jan. 1. These PROs will develop and implement plans to manage the collection, sorting and recycling of covered materials. The bill also aims to expand access to recycling services across the state, especially in rural areas and multi-family residences, where access has been limited. It will establish a statewide list of accepted recyclable and compostable materials.
The program is designed to be funded by fees paid by packaging producers, rather than through new state taxes or direct impacts on the state budget. The bill aims to modernize Washington’s recycling system, which has seen stagnant recovery rates for more than a decade and has not met the state’s 50 percent recycling goal established in 1989.
SB 5284 makes Washington the seventh state to adopt an EPR law for packaging. While widely supported by environmental groups and local governments, the WFIA and other associations raised concerns about potential cost increases being passed on to consumers.
The WFIA called SB 5284 “a classic example of the government adding to these costs by layering on additional regulatory burdens, especially for independent grocery stores.”
WFIA testified several times that broad, new programs such as the EPR will be a direct driver of costs, which must be passed along to consumers in the form of higher prices.
“When you consider added energy costs along with the cost of tariffs and new programs like EPR … consumers will keep paying more.”
She noted that the association defeated a bottle bill that would have been “a nightmare for independent grocers,” requiring them to run recycling programs for deposit bottles.
“More research needs to be done to consider alternate measures for collecting … it was just bad timing to try and pass something that brings higher costs when consumers are struggling to afford food.”
Plastic bags
House Bill 1293 delays requirements for retailers to offer thicker plastic bags for sale from Jan 1., 2026, until Jan. 1, 2028. It keeps the same fee in place (12 cents for plastic and 8 cents for paper).
“These thicker bags were first introduced about eight years ago. The hope was people would reuse these bags multiple times,” Hetrick said. “A recent report showed we weren’t really minimizing our carbon footprint because it was taking more trucks to deliver the same number of bags.
“My guess is in the near future legislators may look to propose a new bill that would minimize or cut out the use of plastic bags in the state altogether.”
B&O tax
Washington is one of the few states that imposes a gross receipts tax. Given that the state does not have personal or corporate income taxes, the B&O tax has been labeled by state officials as a “critical revenue source for the state.”
Legislators looked to extend the state’s B&O tax to include all food items sold in grocery as well as gross sales of more than $250 million, which nearly every large distribution center reaches, on top of their regular B&O taxes paid.
According to Hetrick, the first portion didn’t pass but the second part concerning DCs did. She said the surcharge, which is estimated to generate over $100 million in the next biennium, could directly impact food costs for consumers who shop with independent grocers.
“Grocery is a very low profit margin industry, and in Washington state my grocers average 1 percent profit margin,” Hetrick said. “So had that first portion passed, the state would have collected almost half of what my grocers receive in net income. WFIA worked to raise concerns about the impacts of these costly increases on food and are disappointed the governor did not use his veto power here. We are working to fix this and hoping to revisit it when session resumes in 2026.”
Hetrick said her group met with members of the governor’s office in early June and offered a solution where non-taxable food items would not incur the surcharge. “We hope to get this proposed change passed early in session to avoid increased costs on food necessities.”
Paid family leave
New legislation allows for workers to receive job protection, including health care benefits, after they have been employed for 180 days – which is significantly different than FLMA.
“This has reduced the amount of time a worker needs to be committed to a job before they are eligible. Put another way, employers will pay almost $1,000 a month for health insurance for a person and that person might not come back to work,” Hetrick said.
“This will be horribly costly for employers. We anticipate that this will impact many – including distributors and some of our bigger stores – because it will require more staff and it will increase the cost of groceries, which are already among the highest in the nation.”
Unemployment insurance
The legislature voted to grant unemployment insurance for striking workers. With all of the economic uncertainty, the WFIA urged the governor to veto the bill, testifying that expanding benefits for striking workers further compounds the other increased costs on employers.
“Given that 50 percent of grocers in the state are union stores, we’ve got a big risk here and it’s very concerning,” Hetrick said. “In the past, qualifying for UI meant you are willing and able to work. But in this situation, a person could be working but they are choosing not to.”
With the spring session over, the WFIA’s work in 2025 is just beginning.
“This interim, we will be working with the governor’s office and the Department of Revenue and seeing where we can cut some of these huge tax increases,” she said.
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Companies should be responsible for packaging that is recyclable. However the Casinos continues to pollute our lands because they don’t recycle AT ALL! THIS STATE IS TAX HAPPY AND IRRESPONSIBLE WHEN SPENDING. WASTEFUL PROJECTS, SUPPORTING ILLEGALS AT THE CITIZENS EXPENSE. What do you expect when Democrats continue to put Democrats in office here in Washington state.
And with that, I will gladly be moving out of Washington State!
The governor of the state of Washington must be crazy to implement all these bills. We can’t hardly afford groceries and he wants add more taxes. No Wonder people are leaving this state. Our legislature to remove our governor and start working for the people instead of their pocketbooks.
All these recycling laws and fees are insane. Recycling AND trash in Washington State go to the same landfill. recycling just has more stops before it gets there.
Why do we continue to re-elect the people responsible?
WE don’t, the West side does!