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Meeting Summaries

December 11, 2001
November 13, 2001
October 16, 2001
September 18, 2001
August 30, 2001

December 11, 2001
Washington State Convention & Trade Center, Seattle
Washington Competitiveness Council Report (Executive Summary)

November 13, 2001
REI Flagship Office, Seattle
Welcome and Introductions
Taxes and Fees Subgroup
Regulation and Permitting Subgroup
Physical Infrastructure Subgroup
Human Capital Subgroup
Performance Measures

arrow Welcome and Introductions

The meeting was chaired by Kerry Killinger, Chair, President and CEO of Washington Mutual, Inc.

Governor Locke made opening remarks and announced that Paul Isaki has been appointed as Special Assistant for Business.

arrow Taxes and Fees Subgroup

The Taxes and Fees Subgroup presented its draft recommendations to the Council.

Council members provided the following comments after the presentation:

  • The regressive impacts of Washington's tax system should be addressed.
  • The kind of return on public money and the wages being paid should be examined.
  • The benchmark analysis must compare similar communities; that is, Washington should be compared to similar states.
  • The public should be educated about the services that are provided with tax dollars. The public needs to understand that Washington can't save its way to prosperity.
  • The public should understand the cost of not doing something. For example, the transportation problem is estimated to cost Washington $2 billion in lost income annually.

arrow Regulation and Permitting Subgroup

The Regulation and Permitting Subgroup presented its draft recommendations to the Council.

The recommendations are consistent with three overarching elements:

  • The overall laws in environmental regulation are very important and the work group is not recommending a rollback of those laws.
  • The work group is not recommending any "big ticket" items.
  • The recommendations are short-term suggestions.
Council members provided the following comments after the presentation:
  • Management and use of the sole source aquifer in Eastern Washington need to involve action beyond the immediate boundaries. Washington may need to work with other states and the federal government on that issue.
  • One member expressed strong concerns about eliminating the ergonomics rule, as approximately 50,000 related injuries occur per year and reducing those injuries will ultimately save money.
  • One member expressed concerns about the permitting deadline language and will suggest some alternative language.
  • The Council should take time to find out why development of a 3rd runway at SEATAC airport took so long.
  • The Council should look at timelines and consequences and consider incentives.

arrow Physical Infrastructure Subgroup

The Physical Infrastructure Subgroup made a transportation presentation prepared by the Washington State Department of Transportation and presented its draft recommendations to the Council.

Council members provided the following comments regarding transportation:

  • Washington is a gateway to world trade. Trade creates more jobs than any other function. Success of trade depends upon transportation. Washington is currently paralyzed, and may lose its gateway status, as well as thousands of jobs. Eastern Washington is an asset to Western Washington. If Western Washington is paralyzed, Eastern Washington loses its ability to enjoy economic prosperity.
  • The Council needs to convey to the public what Washington's transportation needs are. The transportation statement should not insinuate that savings will generate the savings necessary
  • A sense of urgency is missing in transportation statement.
Council members provided the following comments regarding other infrastructure issues:
  • A telecommunications benchmark should be added to reflect the number of homes connected to
  • Funding for CERB, a program that funds infrastructure development, should be increased.
  • Washington needs a better state energy strategy.

arrow Human Capital Subgroup

The Human Capital Subgroup presented its draft recommendations to the Council.

Council members provided the following comments regarding the recommendations:

  • A large number of teachers will be retiring over next 4 years, and Washington will not have enough teachers. The Council's recommendations should emphasize getting people back into education.
  • Washington's university tuition is currently low to moderate. Higher tuition and higher financial aid are both needed. The Council should urge the Legislature to untie the universities' hands in terms of tuition setting.
  • Greater flexibility is needed to certify teachers with experience.
  • Laid off workers will need job training. Washington, and particularly its community colleges, needs to accelerate the process of retraining workers.

arrow Performance Measures

Phil Bussey, President of the Washington Roundtable presented updated proposed key performance measures.

Council members provided the following comments on the draft measures:

  • The benchmarks should measure business investment in the state.
  • The benchmarks should reflect comparisons with states are most similar to us in products, population, and other relevant criteria.

October 16, 2001
Seattle Stadium Exhibition Center
Welcome and Introductions
Budget and Fiscal Context
Reports by Workgroups
Strengths, Weaknesses, Opportunities, Threats
Benchmarking Report
Breakout Groups

arrow Welcome and Introductions

The meeting was chaired by Judy Runstad of the law firm of Foster, Pepper and Shefelman

arrow Budget and Fiscal Context

Marty Brown, director of the Office of Financial Management presented a summary of the state budget and fiscal outlook.

arrow Reports by Workgroups

Four subgroup representatives presented preliminary summaries of issues and recommendations. Link to presentations for each of the following four subgroups:

arrow Strengths, Weaknesses, Opportunities, Threats

Martha Choe, director of the Office of Trade and Economic Development, summarized OTED's analysis of six key industry "clusters" in Washington in the context of the strengths, weaknesses, opportunities and threats of each.

arrow Benchmarking Report

Phil Bussey, president of the Washington Roundtable, presented a draft set of benchmarks developed by a Competitiveness Council workgroup to measure Washington's business climate competitiveness over time.

arrow Breakout Groups

The Competitiveness Council broke into the four subgroups:

  • Taxes and fees
  • Regulation and permitting
  • Physical infrastructure
  • Human capital and innovation

September 18, 2001
University of Washington
Discussion of Current Events and Impacts of Terrorist Attacks
Discussion of Process
Process Suggestions for Moving Forward
Presentation of Case Studies

arrow Discussion of Current Events and Impacts of Terrorist Attacks


  • For many business leaders, priorities have changed.
  • For retailers, there is much uncertainty surrounding the fourth quarter.
  • Businesses will experience increased costs.
  • Industries will now be looking to government for additional support.


  • A Council member suggested possible postponement of the meetings until next quarter, given the current economic environment.
  • Other members noted that the initiative is more important now than ever before. Efforts should not be thwarted by the terrorist attacks.
  • Washington still has issues to resolve. The challenge is to get more of the Council members to actively participate in the competitiveness effort, despite the current economic environment. Business is important enough to continue to pursue competitiveness issues.

Other comments:

  • The transportation issue is very important and transcends all sectors of the economy. The state Council should issue a strong statement on transportation and not "reinvent the wheel."
  • The state must find a better way structurally to deal with the transportation issues as they relate to competitiveness.
  • Equally relevant to the state's competitiveness is telecommunications infrastructure.

arrow Discussion of Process

Final product in December may include:

  • Legislative proposals
  • Proposed administrative changes
  • Governor actions without administrative or legislative changes
  • Strong statements on some issues (such as transportation)

Proposed Council subgroups:

  • Taxes and fees
  • Physical infrastructure
  • Human capital and innovation
  • Regulation

Other issues that transcend some or all subgroups:

  • Affordable housing
  • Globalization
  • Urban/rural divide
  • Quality of life
  • Concern over loss of focus on small businesses

arrow Process Suggestions for Moving Forward

  • Assess the needs and challenges of the top 10 employers in Washington.
  • Identify what the state wants to be and where it is going.
  • Identify assets, then identify what assets can be moved forward. That is, identify what sectors or industries Washington wants to nurture (e.g. biomedical).
  • Cultivate those industries that will likely be in Washington in the future by looking at companies that are already growing and thriving.
  • Create opportunities and ensure that they are spread throughout the state.
  • Identify a state plan that could be offered to the marketplace.
  • Identify guiding principles for the Council.
  • Nurture and protect our existing businesses.
  • Market Washington's attributes.
  • Assess what kinds of businesses are likely to locate here in the future.
  • Assess issues through case studies:
    • Live case studies.
    • Pilot programs or beta testing.
    • Studies based on exit interviews.
  • Assess how various factors impact ongoing daily business.
  • Avoid duplication with other efforts (e.g., taxes).
  • Identify a strategic plan: goals, action items, implementation.

arrow Presentation of Case Studies

The following case studies were presented to the Council as examples of past and current siting and expansion challenges of businesses.

  • Alaska Airlines reservation call center: new facility sited in Boise, Idaho
  • Capital One Financial Services: new facility sited in Federal Way
  • Boise Cascade: new facility sited at Satsop Industrial Park
  • US Gypsum Corporation: new facility sited in Oregon
  • Luxel Corporation: retention and expansion project in Friday Harbor
  • Genie Corporation: expansion to Moses Lake
Council members asked to meet in subgroups to identify process for moving forward.

August 30, 2001
Casey Building, Seattle University
Governor's Comments
Comments on Process
General Comments
Competitiveness Council Issues

arrow Governor's Comments

  • Quality of life begins with a good paying job.
  • We must determine how the state can support competitiveness but retain environmental principles, smart growth, strong education, etc.
  • The state must embrace partnerships with the business community.
  • The Competitiveness Council must identify a concrete number of changes that would make a difference to the business community.
  • The commitment by government is demonstrated by the participation of political leaders in the Council.
  • The Council needs to target key sectors, share case studies and identify other issues that will impact all businesses.
arrow Comments on Process

The Council should:

  • Take a very large issue and focus it.
  • Identify the areas it can influence.
  • Identify one or two issues to tackle.
  • Be aware of other efforts to avoid duplication (e.g., Department of Revenue's tax study).
  • Target small "wins" at first.
  • Find some solutions that do not require legislative approval.
  • Form subgroups to focus on specific areas.
  • Utilize only unbiased information.
  • Identify appropriate measurement criteria for competitiveness.
  • Gain public involvement through testimony to subgroups (at public hearings or in written testimony).
  • Determine how to "sell" its answers.

arrow General Comments

  • The Council should focus on productivity rather than just lower taxes.
  • On one hand, Washington needs to recruit and expand businesses in the state. Washington needs long-term investments, such as transportation and education. On the other hand, the state needs short-term steps to avoid more business departures.
  • The Council should first address first maintaining health of existing businesses in Washington, and then focus on attracting new businesses.
  • The state needs to be innovative and nimble to take on challenges quickly and yet be stable and predictable. The state needs to reach out for new models to accomplish both.
  • Washington's businesses compete on a global stage, and therefore need to be competitive in a global sense.
  • Businesses in Washington can contribute to their own competitiveness by "clustering" to share infrastructure costs. The state can provide a catalyst for that to happen.
  • Washington needs to foster awareness and understanding in the public. Not all businesses feel welcome in the state. Residents and businesses need to work together to help profitable growth for all. The Council can create a picture of what it means to be successful in the long run. The public must understand they can't get something for nothing.
  • Washington's business and occupation (B&O) tax is regressive. Perhaps the Council should look at a more sustainable profits tax.
  • Businesses are interested in three things: (1) profitable growth, (2) operational efficiency (margins) and (3) use of assets. If businesses succeed, everyone wins.
arrow Competitiveness Council Issues

The state needs to be able to assess when it is "competitive". A "yardstick" of competitiveness would be valuable, especially to the Legislature. Measurement can be the development or identification of key performance measures. The Council should identify important industries, target them and create measurements to meet needs of the target businesses that define this region.

The Competitiveness Council should focus on the following issues:

  • Fiscal crisis, the need for resources and the lack of appreciation (short-term investment as well as long-term viability). The fiscal outlook reduces the availability of funding for infrastructure and causes pressure for tax increases on business. Input on the "bow wave" effect of decisions should be evaluated in the decision-making stage.
  • Transportation (delays erode competitiveness) and other infrastructure development.
  • High-tech infrastructure, especially the availability of Internet access.
  • Affordable housing, especially for lower-wage positions in urban areas.
  • Harnessing university research and strengthening ties between universities and businesses.
  • Training of a skilled workforce through post-secondary education and workforce training.
  • Regulatory burdens such as land-use permitting, water rights and supply, zoning issues and multi-jurisdiction issues. Many of these processes could be concurrently accomplished. A nexus between rules and regulations is needed. There is a problem with rules adopted in one place and implemented somewhere else without the resources to do so.
  • Government responsiveness and timeliness in processing applications, permits, etc. State agencies need a change in culture from regulatory to service agencies.
  • Ergonomics rules.
  • Workers compensation and the associated costs.
  • Unemployment insurance.
  • Energy-related issues.
  • B&O issues for start-up companies and business expansion. Also, local government uniformity.
  • Rural/urban divide.
  • Economic diversification and infrastructure in rural areas.
  • Creation of jobs.
  • Statewide minimum wage, which is not appropriate given diverse living costs. Also true for teachers' salaries.