Governor Gregoire addresses the Association of Washington Cities

June 18, 2008

*As Written*

Good afternoon, and thank you for the introduction.

It is great to be back in Yakima. Thank you Mayor Edler for hosting the 75th meeting of the Association of Cities.

I also want to take this opportunity to thank the Mayor and the rest of the city for giving us Ray Paolella (Pay-oh-YELL-la). I recently appointed Ray to the Eastern Washington Growth Management Hearings Board. I am sure he will do a super job.

I also really appreciate the great working relationship my administration has with individual cities and your association staff.

My budget and policy staff meets monthly with your executive director and legislative director. I also have quarterly meetings with your officers.

I�m always glad to spend some time with the men and women who are elected and appointed to lead our great Washington cities � large, small, rural and urban.

I spend at lot of time as Governor visiting our communities, and though I�m a lifelong Washingtonian, I�ve come to appreciate in a new way just how unique each city is, and what a unique sense of place each one possesses.

We share common problems and we work very hard together to come up with common solutions.
In fact, we have a lot in common � including our preferred snack:

A big bottle of pink Tums.

As I think many of you know, Washington�s economy is proving much more resilient than many parts of the country. There are a couple of big reasons for that.

One is the sheer diversity of our economy and the other is international trade. Ohio and Michigan combined have lost more than 600,000 jobs, (while we�ve added 215,000).

By diversity, I don�t mean just the broad types of businesses, but where they are located too � from wineries in Walla Walla and here in Yakima to aerospace manufacturers in Spokane�

�To solar-panel component makers in Moses Lake, start-up high-tech companies in Seattle; computer chip manufacturers in Vancouver, and wheat growers in the Palouse.

It�s a big reason Fortune Magazine ranks us among the top five states in the country for small business.

In terms of international trade � we in Washington accept that we are in a global economy. And the fact is, we embrace it and make it work for us.

That�s one of the reasons Forbes Magazine has called us among the top five states to do business.

Our exports rose to a record of nearly $67 billion last year. In fact, our exports have doubled since 2004.

Across the board, exports are up. Our growers are reaping the benefits of a weak dollar, and are also enjoying the benefit of worldwide demand for their products. We are the most trade-dependent state in the nation, and it shows.

So why are so many of us popping Tums?

Although Washington is in relatively good shape compared to the rest of the country, things are still tough out there for Washington families, businesses and our governments.

The price of gas is well over $4 a gallon, and we are not immune to the housing market downturn, although we still rank 49th of 50 states in the number of homes in foreclosure.

Tomorrow, we will hear the latest state revenue forecast, one of three we will get before we write and submit a new two-year budget this December.

We are the envy of other states with a budget surplus of $850 million. (California has a deficit of $20 billion.)

By the way, the voters of Washington approved my proposal to create a Rainy Day fund -- and Wall Street took note. They raised our bond rating, which translates to lower borrowing costs for schools and other infrastructure.

But clearly we will have some work to do to manage our way to a spending plan that continues to deliver the results that Washingtonians most need. But we have a solid foundation.

In fact, the Pew Research Center on the States recently ranked us � in a tie with Utah and Virginia � as the best managed state in the country � in terms of � for example --how we spend tax dollars, manage our infrastructure, and use our personnel.

But we have challenges, and so do you.

I see the headlines, and I�m well aware that you in local government are grappling with hard choices right now. And I know that you�re managing your way through them.

I want you to know that as usual, I�m ready to do what I can to help you.

There are things we can take a look at.

For example, over the years the Legislature and governors have given you the authority to seek modest tax increases restricted for specific purposes � such as a tenth-of-a-penny sales tax to pay for criminal justice and mental health needs.

Maybe there could be a case made to ease up on restrictions. Why do we in state government need to tell you how to spend taxes you raise? We may need to look at that.

I also very much support our effort to make it easier for the cities to access funding already available for infrastructure needs.

I�m referring to the recommendations from the Infrastructure Funding Task Force.

In short, we are trying to get rid of the �Easter Egg Hunt� all of you are forced to engage in. To get assistance now, you have to engage with 12 different agencies and 85 different programs.

This is time consuming and costly. Cities seeking funding for sewer and water projects and other needs shouldn�t need to have professional grant-writers on their staffs.

We need to simplify the application forms and consolidate the programs into fewer agencies, and we�ll keep working on it through the Legislature.

Working together, the cities, the Legislature and I have already taken significant steps to help our cities.

And today, I�ll take a few minutes to remind ourselves of some of our major accomplishments.

It took us a couple of years to streamline the sales tax, and I know the cities worked very hard to make it happen. The new system goes into effect next month and we are busy training the business community so they can comply.

We worked together three years ago to enact the financial assistance program for cities and counties with a small tax base. I understand the funding stream for this program is under stress because it depends on excess real estate excise taxes, and we�ll have to take a new look at this program.

On another tax issue, we all worked together to modify the Transportation Benefit District legislation so a local government has the ability to impose a $20 vehicle license fee to help pay for local road improvements. This is something local governments asked for.

Through our partnership with the Association of Sheriffs and Police Chiefs, and with your help as well, we have done a lot to keep the streets of our cities safer and take on some of the costs for that.

The Gang Task Force recommendations were adopted last session and the bill�s co-champion was Yakima�s own Representative Ross. This bill will give you additional tools to tackle gang issues at home.

We extended my Operation Crackdown to help local law enforcement track down and hold accountable sex offenders who violate the terms of their community supervision. We added $200,000 to this effort, on top of $100,000 last fall.

We have partnered with five cities around the state at a cost of nearly $500,000 to keep closer tabs on released sex offenders and hopefully reduce the risk of recidivism.

We are providing $5 million to pay for in-person verification that sex offenders are living where they say they are, and also to make sure every one of them has a DNA sample on file.

And we are spending about $300,000 to create a unified sex offender registry on the Web, which will be statewide and updated in real time.

There is no question that one of the biggest cost drivers in our budgets at the state and local level is the criminal justice system.

Two years ago, we worked together to pass offender re-entry legislation.

If we can help the offenders get the skills they need to succeed and transitional housing, we know from experience that fewer will cycle back through the system, saving us all money.

Three years ago we worked with King County and this association to enact legislation to help ease the expense of large annexations in King, Pierce and Snohomish counties.

So far, Auburn is the only city to take advantage of this legislation.

These are just a few examples of our work together.

I think it is time to stop and take some questions, but I want you to know that my door is always open to our cities. We have common challenges, and we can find common solutions.

I�ll do my part. I�ll keep working, across the aisle and across the state for our interests.

Thank You