Mastering the Art of the Possible

By Bob Nieman, CLA Member posted 02-26-2018 10:39



An Interview with State Tax Expert Joe Crosby

Joe CrosbyJoe Crosby serves as the chief executive officer of MultiState Associates, the nation’s leading state and local government relations services firm. He is involved in all aspects of the firm’s efforts to help clients resolve the challenges they face in the state and local government arena, with a concentration on providing strategic counsel, identifying and deploying political assets, and advancing tax policy objectives. Crosby also serves as executive director of the Council of State Chambers.

Prior to joining MultiState, Joe spent 11 years with the Council on State Taxation, an association representing the nation’s largest companies on state and local business tax issues. He served COST as chief operating officer and senior director, policy. In addition to his operational responsibilities, Crosby managed all aspects of the organization’s advocacy program and regularly testified before state legislatures and other state and national policy-making bodies.

Joe is a nationally recognized expert on state and local business tax policy. He was identified by State Tax Notes as the “single most influential person in state taxation” and named as the publication’s inaugural Person of the Year.

Prior to his work with COST, Crosby was national director of state legislative services for Ernst & Young LLP, where he provided legislative monitoring, advocacy management, and coalition development services. Earlier in his career, he spent four years as a senior executive with a state legislative tracking firm and managed political canvasses.

Joe is past president of the State Government Affairs Council, the premier national association for multi-state government affairs executives, and served on the board of directors of the Washington Area State Relations Group.

He holds a bachelor’s degree in history from Loyola Marymount University in Los Angeles and a master’s degree in economic policy from American University in Washington, D.C.

Joe will be a featured speaker at the CLA’s Excellence in Laundry Conference, to be held May 16-17 at the Naples Grande Beach Resort in Naples, Fla. He will present “Today’s Legislative Landscape for Laundry Owners.” Joe's presentation is sponsored in part by Hamilton Engineering and Vend-Rite Manufacturing.

  • Hamilton Engineering
  • Vend-Rite

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The past few years have been busy ones for the self-service laundry industry, with regard to state budget woes and, in turn, subsequent battles by store owners to maintain their sales tax exemptions in many states. Why such a flurry of activity of late? And do you see this activity dying down or increasing in 2018?

The primary driver of the proposals we’ve seen in recent years, which would impose sales tax on self-service laundry, is politics. It’s not that laundry is being targeted, it’s that policymakers – mainly in Republican-led states – are seeking to expand sales taxes as a way to “pay for” reduced income tax rates. This is a long-term trend that isn’t likely to abate absent a significant change in partisan control of state legislatures.

2018 is likely to be a bit slower on this front, both because of the expectation of hotly contested elections this fall and because of the uncertainty states are facing in the wake of federal tax reform. The response to federal tax reform is really consuming all of the oxygen in state legislatures from a budget and tax perspective. That is not to say that we’re completely free from risk; there are several states we’re watching closely.

The industry has been extremely successful in turning back those legislative attacks in every instance. In your opinion, why have laundry owners been so triumphant in these clashes with state and local municipalities?

Laundry owners have a few things going for them in these state battles. First, the Coin Laundry Association is vigilant, ensuring it is aware of proposals as soon as they are floated and that it is prepared to respond with in-state advocacy. The CLA tracks legislative activity on a real-time basis, working closely with our team. We also have deep, established relationships in every state capitol, allowing us to secure inside intelligence and quickly retain advocates when necessary.

Second, the policy arguments are on the industry’s side, and the CLA has worked to hone those to appeal to both sides of the political aisle. Maintaining the exemption for self-service laundry protects the financial security and health of lower-income families and promotes principles of good tax policy, such as avoiding double-taxation.

Finally, owners and operators themselves are engaged in the process. Many states have formal or informal groups of owners that liaison with the CLA, providing both national expertise and a key constituent presence. It is difficult to overstate the importance of having active CLA members in a state.

What can laundry owners do on a personal level to ensure that they maintain their sales tax exemptions?

The single most important thing any owner can do is to be engaged with the CLA so that they know when a threat has arisen – and, if they are politically active already, to share with the CLA what they are hearing. Certainly, getting to know your state representatives and senators is valuable – the old adage “make a friend before you need a friend” applies here. But not every laundry owner will be inclined toward direct political engagement in that way, which is one reason why the CLA’s representation of the industry is a key.

Do you anticipate a sizable amount of sales tax activity aimed at the self-service laundry industry again in 2018?

As noted earlier, I expect 2018 to be a bit quieter, but the issue isn’t going away. Depending upon the election results in November, 2019 could be a big year. If Republicans – which currently have full control in 26 states – are able to maintain their majorities, it will be viewed as validation of the budget and tax policies they have pursued, and we could as a result see a resurgence of sales tax base expansion proposals.

The minimum wage has been getting a lot of press lately. A number of states raised their minimum wages on January 1. What can laundry owners expect, regarding this issue?

Our research shows that minimum wage increases are almost always adopted during election years, and that minimum wage questions put on the ballot for voters to consider are almost universally adopted. We’re going to continue to see a push for higher minimum wages, but there will be significant state-to-state differences depending upon the political climate. It’s also important to note that much of the activity with regard to wage, hour, and leave mandates are occurring at the local level, especially in larger cities, such as Seattle, which has been a leader in raising minimum wages.

In many markets, the laundry industry relies on a large percentage of immigrants – both as customers and employees. What is the latest on immigration policy, and what can store owners expect in 2018 and beyond?

In light of the federal uncertainty, I don’t feel confident enough to respond on this.

With the mid-term elections this year, what other key legislative issues of importance to laundry owners and other small-business operators seem to be heating up?

Aside from minimum wage increases, we’re seeing an increase in other labor mandates, including so-called “predictive scheduling” and paid family and sick leave. State responses to the opioid epidemic and, somewhat conversely, states legalizing recreational marijuana use also may have a significant impact on employers. In addition, how states ultimately respond to federal tax reform, including whether or not they provide a tax break to pass-through businesses, will be a key issue for CLA members that will play out over the next few years.

What are the best resources available to laundry owners to help them stay abreast of any current legislation that may impact their businesses?

The CLA comprehensively monitors issues of importance to the industry. It’s the first place I’d suggest owners look for information.

It’s easy for some to become apathetic with regard to politics and legislation. What would you say to laundry owners who may be feeling that there is no way they can make a difference on their local legislative landscape?

I point to the successes the industry has had in defeating multiple proposals to eliminate the sales tax exemption for self-service laundry – as well as the victory it enjoyed in enacting an exemption in Iowa. Those successes prove the value and efficacy of political engagement. Politics is the art of the possible – those who believe they can affect the process and act accordingly do in fact have an outsized impact on political outcomes.

What one thing would you like the laundry owners reading this to take away from this interview?

At the risk of sounding like a broken record, I would emphasize the importance of the Coin Laundry Association to the industry when it comes to the policy process. The CLA is recognized and respected and, for a relatively small organization, makes a big impact when it engages.

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