State must lift barriers to business

Guest column

Scott Morris
Special to The Spokesman-Review


Washington State - Economists predict Washington's economic recovery will lag the rest of the country. How long our economy will suffer, and whether any recovery is confined to the Seattle area or spread across the state, depends upon many factors. Perhaps the most crucial of them is politics.

Washington state is simply not well regarded as a place to do business. Without question, the Legislature can set the tone for the state's business climate by taking decisive action. It's up to lawmakers to fix the problem.

A company called Buck Knives recently announced that it will move its operations from San Diego to Post Falls, Idaho, providing 200 family-wage jobs. Washington was in contention to land this new employer, but as reported in The Spokesman-Review, "what tipped the scales to Idaho was the ... business-friendly legislative environment."

The Oregon Legislature has a similar reputation. Over the years it has created an effective network of state and local economic development experts and enabled workforce training funds and tax abatements to be offered by the state to employers. If we expect to compete, Washington lawmakers have some serious work to do.

Washington Gov. Gary Locke wants to correct the situation despite serious constraints. Lacking the tools of other state governors, Locke is asking lawmakers to devote more money for public works projects, fund additional enrollment positions for high demand fields at institutions of higher education, enable communities to build infrastructure that attracts new development and stabilize funding for rural community revitalization.

These are excellent ideas, considering that the state's nearly $2.5 billion budget deficit impedes bolder solutions.

During the 2003-2005 biennium, the state can spend only $950 million for new prisons, schools, college buildings and other public institutions, unless extraordinary measures are pursued. Gov. Locke wants to bond against lottery revenue so that projects can be built and jobs created sooner than would otherwise be possible.

The state can also take advantage of low interest rates to borrow money and construct as many public facilities as possible.

The Legislature can either endorse the governor's approach or devise an alternative way to find more capital, but it must do something to spawn economic growth into the future.

The governor has also introduced legislation that would allow local governments to use tax increment financing, backed by a small contribution from the state, to finance public infrastructure serving new retail or manufacturing facilities. Tax increment financing does not rely on new taxes, and it is not a novel idea. Almost every other state does it. Washington should too. Hopefully, the Legislature will agree.

The Governor's Competitiveness Council concluded that Washington requires sustained policy direction and adequate resources, including effective workforce training and grant programs, to strengthen its economy. Several legislators have introduced bills establishing a commission to direct the Department of Community, Trade and Economic Development (CTED) in pursuing economic development strategies.

That's a positive start; and the Legislature should be applauded for taking this initiative. Now it needs to approve one of these bills.

Legislators have also started an effort to preserve tools we already have that allow the state to compete with others. High technology companies across the state have created new jobs and products because, several years ago, lawmakers granted them tax exemptions for research and development. These exemptions are scheduled to expire soon. If legislation to extend them is not enacted, new investments will be made elsewhere.

All the economic development proposals initiated by the governor and lawmakers have less value if the state can't recruit and keep employers. Only two CTED employees are assigned to recruiting and retaining business. That level of staffing is woefully inadequate. Increasing it will entail the difficult proposition of reprioritizing CTED's budget, but legislators need to do it.

But the work doesn't stop with new hires. The state needs to provide leads to be worked by local economic development entities across Washington. And the state needs to develop a plan to market itself throughout the West and beyond.

The Legislature has a tough job to perform this year, given the magnitude of the state's budget deficit. But it must act decisively, in bipartisan fashion, to improve the state's economic development infrastructure and remedy Washington's reputation for having a poor business climate.

It's time to prove that our state deserves favorable comparison with others.

Scott Morris, senior vice president of Avista Corp., is chairman of the Washington Economic Development Commission.


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