Let the economy breathe

Opinion/Editorial by Bob Williams and Carl Gipson,
Evergreen Freedom Foundation

March 10, 2003

Washington state has lost 96,300 jobs since December 2000 -- more than any
other state in the nation. This includes the loss of 45,700 high-paid
manufacturing jobs . . . and the state forecasts the loss of 20,000 more by
the end of the year.

By comparison, California, with an economy five times the size of ours, has
lost 83,800 jobs.

So what's going on? Governor Gary Locke says these job losses are the fault
of the federal government, the national recession, and the terrorist
threats. But he's wrong. The problem starts right here at home with our
state's anti-business policies.

Washington has one of the highest business tax burdens in the nation, and
already this year businesses have been hit with one of their largest tax
increases in history: unemployment insurance rates went up 15.6 percent and
workers' compensation rates increased an average of 29 percent. Workers'
compensation rates are expected to go still higher later this year.

On top of high taxes, overzealous agency regulators are smothering
businesses. Liability insurance has increased tenfold for many, and the
minimum wage has increased to a level exceeding that of 47 other states.
Because of excessive insurance mandates, health care insurance premiums have
skyrocketed. And implementation of the controversial new ergonomics
regulations is expected to cost businesses (and through them, their
employees and consumers) as much as $750 million.

Ironically, Governor Locke recently boasted that five companies had decided
to open new facilities or expand in Washington state thanks to improvements
in the business climate. What he failed to mention is that he granted all of
these companies an exemption to the new ergonomics regulations!

The governor's proposed economic recovery and jobs creation program is
off-target, to say the least. He recently traveled around the state hosting
press conferences to announce his plans to borrow more money (which our
children will have to pay off) to build more state facilities (which
taxpayers will have to operate and maintain) to create more state jobs
(which taxpayers will have to support).

Locke wants to max out the state's credit limit by borrowing $900 million in
general obligation bonds. Then he wants to go beyond the limit and borrow
$300 million against future lottery proceeds (which are forecasted to drop
dramatically) and another $90 million against efficiency savings that have
not yet been identified.

This is a perfect example of how not to solve an economic problem. As jobs
leave the state and working families are being forced to bear a heavier
share of government's total spending, increasing the tax burden is exactly
the wrong thing to do. Our state doesn't need more employees on the public
payroll, it needs more family-wage jobs in the private sector.

And the private sector is ready to provide them. Businesses don't want
government to give them a handout, they want government to get out of the
way. They want state officials to remove the barriers making Washington a
bad place to do business. Almost every day during this legislative session,
business groups have been in Olympia pleading with legislators to rein in
the state's out-of-control bureaucracy.

Our state has an abundance of natural resources and a skilled and
entrepreneurial population. These are the key elements for a thriving,
healthy, competitive economy. But they are being suffocated by our state's
bloated bureaucracy.

Washington is at a crossroads. We will continue to lose more family-wage
jobs and skilled workers until Governor Locke and his colleagues in the
legislature take real action to address real problems. Rather than trying to
find short-term, feel-good fixes, they need to look after the long-term
health of the economy. They should carefully consider how they can implement
regulatory reform, streamline permitting processes, lower taxes, clear
traffic congestion, and repeal punitive labor laws.

The question is, will they?

Bob Williams is president of the Olympia-based Evergreen Freedom Foundation,
and Carl Gipson is the Foundation's Deputy Communications Director.

Contact: Marsha Richards, Communications Director
(360) 956-3482

Evergreen Freedom Foundation
A Non-Profit Public Policy Research Organization
PO Box 552, Olympia, WA 98507
(360) 956-3482, www.effwa.org




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