Governor Gary Locke’s Remarks
Bellevue Chamber of Commerce
February 20, 2002

Thank you, Joan (Wallace) for that kind introduction. It’s always great to be here at the Bellevue Chamber of Commerce.

With the grim revenue forecast issued yesterday, I wish I could start with a joke. But as Adlai Stevenson said after his defeat by Ike, “It hurts too much to laugh, but I’m too old to cry.”

Today, we are now looking at a deficit of more than $1.5 billion in the 2001-03 biennial budget and that deficit may grow to perhaps $1.6 billion with today’s forecast on public school enrollments, rising medical costs to low-income adults and children, and increasing prison populations. These are mandatory expenses, imposed by the courts and the federal government.

A national economic recession -- intensified by the events of September 11 -- has left our state and 39 others facing budget shortfalls in the billions of dollars. So we are not alone. Yesterday’s revenue announcement means we must tighten our belts even more.

We must reduce state employment even more. From July to December, I reduced full-time equivalents (FTEs) by 1,685. I have taken steps to impose a hiring freeze and with budget cuts expect to reduce FTEs by another 1,200. I’ve also restricted state employee travel and imposed a freeze on equipment purchases.

Yesterday, I met with the legislative leadership and budget chairs and pledged to work with them to find a solution to the growing budget problem.

My proposed rewrite of the state budget solves it without a general tax increase, despite worsening economic news.

I will ask the Legislature to consider eliminating cost of living adjustments (COLAs) for state workers and state vendors, and examine other cost-saving options including an additional across-the-board reduction in all state agency budgets. But that is tough: it would apply to courts, prisons, state patrol and schools.

These are difficult times but we have gotten through them before and we will get through them again if we work together.

Despite the grim revenue outlook, there is still much we can do in Olympia right now to help Washington weather this downturn and especially, to lay solid groundwork for a thriving economy when the downturn ends -- which it will. I’m an optimist.

The Legislature can start by passing my $8.5 billion, 10-year plan to fix our transportation mess.

Key East King County projects included in my 10-year transportation plan:

• I-405 investments: $2.2 billion to add two general-purpose lanes from Tukwila to Bellevue, construction of a new interchange at SR167 and other improvements to the corridor.
  
  
• SR 520/West Lake Sammamish Parkway to SR 202 near Redmond: $65.5 million to widen 520 to eight lanes (two miles), build five new bridges, stormwater retrofit work and other improvements.
  
  
• SR522 improvements between Seattle and Woodinville: Four separate projects, totaling $50 million to construct various improvements -- land widening, bridge construction, bus pull-outs, turn lanes, etc. -- over the nine-mile section of SR 522 between Seattle and Bothell, and a 10-mile stretch between Woodinville and Monroe.
  
  
• SR18 completion to I-90: $144 million to finish the more than 17 miles of four-lane divided highway construction from Hobart Road to I-90.

The transportation plan alone will create more than 20,000 new, good-paying, private-sector construction jobs, many of them in the next few years. That's a good short-term way to reduce the suffering to our citizens caused by this economic recession.

In the longer term, we have to be concerned about the competitive edge we enjoy. And the biggest single threat to that edge is, of course, our terrible transportation system.

I don't know how many ways I can state the obvious. If we don't take significant steps this year to unclog our jammed highways, we are going to risk losing commerce to other areas of the country.

Some of you may have traveled to the Olympics in Salt Lake City. If you did, you saw what the state of Utah achieved in the name of preparing for the Olympics (paid for by the feds, by the way). They have sleek new interchanges and widened, spacious freeways circling and bisecting the heart of Utah's commerce. They have a new (light) rail system -- packed every day with commuters -- running the full length of the Salt Lake Valley with a spur to the University of Utah.

Folks, we can no longer depend on our superior natural environment to do the job. We are going to have to compete in coming years for business with Utah, and others like it. We must move on transportation now. We need to take hard votes and do the job that the voters elected us to do.

And we can't stop with transportation. We must do even more to make sure we can continue to compete with other states for economic growth. One of my first acts as governor was to roll back B&O tax rates. We also achieved significant injured workers insurance premium reductions.

I convened the Washington Competitiveness Council last year to find ways to make our competitive edge in business and industry even stronger.

When the council delivered its final report last month, I promised to put it to work. Many are being implemented by administrative orders from my office. I'm seeking legislation for others.

Of course, the council's first (and loudest) recommendation was that we pass a comprehensive fix to our transportation mess.

But I'm also pursuing some of its other main recommendations.

I've appointed Paul Isaki to work from inside the system to see what can be done to cut red tape -- especially at the Department of Ecology -- without threatening our environmental protection effort. Businesses should not have to wait months and years for regulatory permits if the projects they propose meet our environmental standards.

I'm proposing legislation to increase the fairness of our tax system. I'm asking the Legislature to clarify laws controlling the business and occupation tax deduction of investment income to ensure internal investment income isn’t subject to tax. I'm also seeking to reform municipal taxation so that businesses that do business in more than one city don’t have to worry about multiple sets of definitions and don’t have to pay taxes to more than one city on the same transaction.

I'm working to develop bipartisan solutions for water. We cannot expect to have a healthy economy if we don't have enough water to protect our environment and still serve a growing population.

And I'm proposing additional steps to make sure we have a trained workforce ready to step into a revitalized economy.

Our department of Licensing is working with local governments to expand the state's Master Business License program. This is a program that allows businesses to obtain licenses from a number of state agencies simultaneously over the Internet, with one form and one fee.

The City of Bellevue took part in a pilot project to extend that program to local governments, and that pilot was very successful. Busy people trying to get a company up and running appreciated not having to stand in line at the city after they've already registered with the state. So we are expanding that program to offer it to more local governments and more state agencies.

Right now, Washington is in a serious economic downturn, and it is going to take time to recover. But there really is a lot we can do right now to ease the suffering.

I'm ready to work with the Legislature in the final weeks of this session to fix our transportation system, to enact the Washington Competitiveness Council recommendations and to take other steps needed not only to create new jobs now, but also to position us for the future.

Thank you. And with that, I’ll take any questions you may have...

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Related Links:
- Bellevue Chamber of Commerce
- Washington Competitiveness Council