State must act now to ensure economic competitiveness
by SCOTT MORRIS;
Tacoma News Tribune
Washington State - Economists predict Washington's economic recovery
will lag behind the rest of the country. How long our economy will
suffer, and whether 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 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. It has created an
effective network of state and local economic development experts
and enabled the state to offer work force training funds and tax abatements
to employers. If we expect to compete, Washington lawmakers have some
serious work to do.
Gov. Gary Locke wants to correct the situation despite serious constraints.
Lacking the tools of other governors, Locke is asking lawmakers to
devote more money to public works projects, fund additional college
enrollment positions for high-demand fields, 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
During the 2003-2005 biennium, the state can only spend $950 million
for new prisons, schools, college buildings and other public institutions
unless extraordinary measures are pursued. 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 future economic growth.
The governor also has 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
work force training and grant programs, in order to strengthen its
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 also have 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
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.
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
Scott Morris, senior vice president of Avista Corp. in Spokane, is
chairman of the Washington Economic Development Commission. He served
on Gov. Gary Locke's Washington Competitiveness Council and was chairman
of the statewide Task Force on Economic Development.