Business on the Jawbone article from the Lewsiton Morning Tribune

              Sunday, August 4,2002
LEWISTON MORNING TRIBUNE
Section  £
Markets
Pages 4-5E
Classified
Pages 7-16
Business on the border
■ Companies in the
Evergreen State have to
contend with taxes and
regulations that their
Idaho competitors don't
As a co-owner of a restaurant,
John Sharp understands something seemingly small can
make the difference between turning
a profit and having a loss.
He makes a point of paying close
attention to the details, such as making sure employees know the correct
portion sizes. Make them too big and
it hurts the bottom line. Make them
too small and the customers could
complain. ■'•'•i'
So occasionally he cringes inside as
he watches an employee ring up orders and sees how much Washington's 7 percent sales tax boosts the totals.
"It's like boom, that adds up fast,"
Sharp says.
In neighboring Idaho, diners pay
just 5 percent
Deserved or not, Washington has a
reputation of being an unfriendly
business environment.
The primary reason is the business
and occupation tax, Washington's
substitute for an income tax on businesses, says William S. Stewart, executive director of Valley Vision, a public "• and private economic
development group in Lewiston.
Nicknamed the Boeing tax, it's
levied against revenue instead of
profits like income taxes are figured,
Stewart says.
For some companies with large
volumes and
profits, a business and occupation tax actually
costs less than a
income tax,
Stewart says.
But for businesses that lose
money   or   that
- run on slim profit
margins, such as
some restaurants, it's difficult, Stewart says.
Lewiston accountant Su Brown uses this example: A business generates
$2.5 million in revenue, but has $3
million in expenses. In Washington
that business is taxed, but in Idaho it
isn't because it lost money, Brown
"Washington is a
pain to do
business
with."
Manual Garcia,
Qarliz
In vestments
Tribune/Barry f
John and Bud Sharp plan their work while on the run, between their Clarkston restaurant (above) and their Lewiston restaurant (below).
says.
The system makes it especially difficult for businesses just starting because they typically lose money for at
least two years, Brown says. |
"Washington is a pain to do business with," says Manuel Garcia owner of Garliz Investments in Post Falls,
Idaho, which operates 27 Burger
Kings including one in Clarkston and
one in Lewiston.
'"Washington is just getting absurd
in the way they're treating businesses," Garcia says.
Like Sharp, Garcia also has difficulty with the sales tax. In Clarkston,
Garcia's Burger King sits just across
the street from Albert sons.
Groceries aren't subject to sales
tax in Washington, so a shopper there
could buy a ready-to-eat breakfast,
lunch or dinner and not pay sales tax.
One of Garcia's biggest headaches
in Washington is unemployment
..claims. The rules in Idaho and Washington appear to be similar,- but in
Garcia's opinion those in Washington
who enforce them seem more likely to
side with employees.
In Idaho, an employee who is fired
after not showing up for work once
and not calling to provide an excuse
will likely not be successful in an attempt to draw unemployment benefits/Garcia says.
In Washington it seems an employ
ee can do that three or four times, before they might be denied unemployment benefits, Garcia says.
As the employer, Garcia says, he
has to be careful. Each year the
agency responsible for distributing
unemployment benefits in each state
reviews his records to determine how
much he will contribute to the funds.
If a large number of his former employees received unemployment benefits in the previous year, his rates
could climb.
Then there's Washington's minimum wage, which at $6.90 per hour, is
the highest in the nation and well
See Border, Page 2E
Recovery
hits dog
days of
summer
■ Unemployment rate in
July stuck at 5.9 percent
WASHINGTON — The nation's unemployment rate
remained stuck at 5.9 percent in July with a disappointing
6,000 new jobs created, increasing
worries the fledgling recovery
could be in danger of stalling out.
Friday's report by the Labor Department capped a week of dismal
data in which economists' hopes for
signs of a rebound were dashed.
Analysts had expected about 60,000
new jobs for July instead of the
meager 6,000. New hiring in the
services industry was tempered by
job cuts in construction and manufacturing.
"We're falling slowly behind, not
moving forward," said Bill Cheney,
chief economist at John Hancock
Financial Services. "We have to run
fast just to stay in place and we're
not doing it."
In another bleak report, orders to
U.S. factories fell in June for the
first tune since February, dropping
by 2.4 percent, the Commerce Department said. That marked the
biggest decline in seven months.
Analysts were forecasting a solid
0.5 percent gain. The weakness was
widespread, suggesting the come-
. back in manufacturing is slowing.
The lackluster jobs report caused
stocks to tumble on Wall Street with
concerns that the economy, isn't
turning around as quickly as hoped.
The Dow Jones industrial average
closed down 193 points and the
Nasdaq composite index slid 32
points.
Given the mixed outlook of recent economic indicators, analysts
predict the Federal Reserve will
See Recovery, Page 2E
Business on the Jawbone
■ Some of the earliest
concerns in Clarkston
are still going strong
In 1899, more than $100,000 in new
commercial buildings were erected on the flat that would become
Clarkston, to serve the growing
agrarian community.
Through the years lumber yards,
newspapers, groceries, bars, butcher
shops, livery stables, canneries and
cherry orchards have come and gone.
A couple of Clarkston's earliest
businesses, however, still remain.
And many of the stout Old West-style
brick buildings left by those who fell
out early are now homes to a handful
of business names Lewiston-Clarkston Valley residents have trusted for
the better part of a century.
Some, like the folks at Merchant
Funeral Home, Clarkston's oldest
business still in operation, have the
advantage of human eventuality on
their side.
That doesn't mean there's any
slack when caring for customers, says
semi-retired owner Bob Larrabee
and long-time funeral director Don
Brown.
"The phone never rings in the middle of the night without someone being in a situation where they need
us," Brown says. "A funeral home is
kind of a unique business. We don't
open at 9 am and close at 5 p.m. We
are open 24 hours a day, seven days a
week."
Henry R. Merchant arrived in 1898
in Asotin, where he was acting coroner as well as a funeral director.
In 1914, Merchant moved his business to what was first known as Jawbone Flat, building and setting up
shop in what is now Boyer Furniture.
Half the building was a funeral
parlor, the other half a furniture shop
and manufacturer.
It was common for funerals and
furniture or hardware to go hand in
hand, because of the need for coffins.
Merchant built the modern,
$100,000 funeral parlor at Chestnut
and Seventh streets in 1951. The business was passed to Tommy Merchant,
who later sold it to Larrabee.
In 1996, Larrabee sold the funeral
One early business In Clarkston is Indian Motors, which started in 1941 In a home garage and moved to tills
location at Fourth and Diagonal streets. Owner Allan McClain (standing In the doorway) moved it to Bridge
Street in 1967 and renamed It Mac's Cycle because the original Indian motorcycles were no longer manufactured. Among the motorcyclists pictured are Clarkston policeman Lloyd Blakley (left) and former Clark-
See Jawbone, Page 3E  ston Mayor David Justice (second from right).