Office of Governor Gary Locke
FOR IMMEDIATE RELEASE - January 21, 2004
Contact:  Governor's Communications Office, 360-902-4136

Gov. Locke Outlines Economic Development Priorities for 2004 Session, Addresses New Competitiveness Council Recommendations

Gov. Gary Locke today outlined his economic development priorities for the 2004 legislative session and discussed how the state is working to implement the latest recommendations of the Washington Competitiveness Council.



“We have made great strides in economic development in recent years, and we must build on that momentum,” Locke said during his weekly news conference in Olympia. “We can create more family-wage jobs in our state and help our businesses grow and expand. We are on the right track, but we must keep moving forward.”



Locke has proposed several key pieces of economic development legislation this session:



Encourage research and development in Washington – HB 2456/SB 6239 would extend tax incentives for research in specific technology areas and construction of research facilities. The incentives include sales tax deferrals and exemptions for qualified investments in research and development (R&D) facilities, and a business-and-occupation (B&O) tax credit for qualified R&D expenses. Qualified industries include advanced computing, advanced materials, biotechnology, electronic device technology and environmental technology. Accountability tools to measure the long-term effectiveness of incentives would be provided. The legislation would also extend the sales tax deferral to research facilities built by the universities and would eliminate the B&O tax on federal research grants to small businesses.


Encourage investment in rural Washington – SB 6240 would extend the sales tax exemption on construction of manufacturing and research facilities in rural areas as well as the B&O tax jobs credit. The legislation would also continue the B&O tax credit for help-desk enterprises in rural areas.


Help local governments attract and expand new businesses with investments in sewers, roads and other infrastructure – SB 5364 and HB 1281, proposed last year, would provide local governments willing to invest in their own infrastructure an opportunity to keep some of the state taxes generated when businesses take advantage of these improvements and locate or expand in local communities. State taxes retained by local governments are used to pay bond debt on infrastructure improvements.


Continue agriculture promotion efforts that support the state’s rural economy – Locke’s 2004 supplemental budget would maintain funding for the second year of the current biennium for the “From the Heart of Washington” program, which provides advertising and in-store labeling for Washington-produced agriculture products. The legislation would also continue funding for the second year for a state trade representative for China and Southeast Asia. The legislation would also increase funding for the Small Farm and Direct Marketing program.


Locke is also calling for action on budget items required in the state’s agreement with The Boeing Company for final assembly of the 7E7 in Everett, including:



Funding for an Employment Resource Center with state-of-the-art equipment to house the workforce development programs for the Boeing 7E7 Dreamliner and its suppliers located close to the assembly site.


Locke today also discussed the recommendations of the second round of the Washington Competitiveness Council. The council issued its final report to the governor this week.



“The council agrees with what we have been saying all along – that you can’t have successful economic development without investing in education, particularly higher education,” Locke said.



The Competitiveness Council comprises business, labor, education and government leaders from across the state. After initially convening the group in 2001 to examine Washington’s ability to compete in the global economy of the 21st century, Locke reconvened the council in October 2003 to continue its previous work and address higher education issues to further improve Washington’s competitiveness.



Competitiveness Council Phase II recommendations include:



Higher Education
Increase access to the state’s public colleges and universities
Improve efficiency of the higher education system
Secure sufficient funding to meet access, quality, workforce training and competitiveness goals
K-12 Education
Refine and clarify the Washington Assessment of Student Learning (WASL), particularly regarding the Certificate of Mastery, which students will be required to complete for graduation starting in 2008
Strengthen the state’s Learning Assistance Program (LAP) and stabilize allocations to school districts that need the most help
Research and Technology Transfer
Substantially increase state support for research and development (R&D)
Provide tax incentives for R&D and commercialization
Taxes, Regulations and Infrastructure
Create additional statewide and local funding solutions for transportation problems
Develop tools needed to continue the Priorities of Government (POG) budgeting process, pioneered by Locke in the 2003-05 budget, and ensure that this approach is used in the 2005-07 budget (Locke has already committed to this approach for the next biennial budget)
Amend the powers of the Office of Regulatory Assistance to include establishment and monitoring of permit timeliness benchmarks for permitting agencies
Support the extension of rural tax credits for construction of manufacturing and technology facilities in rural areas


Locke is taking steps to implement many of these recommendations – through legislation that he is proposing or supporting, executive order or agency directive:



Higher Education
Locke’s 2004 supplemental budget calls for increasing state-funded higher education enrollment by as many as 5,200 full-time students, providing the access that citizens seek, and the well-educated, well-trained graduates that Washington businesses need to remain competitive. Funding is provided for as many as 2,727 students in high-demand fields such as health care, computer science, math and special education instruction. The number of state-funded general enrollments also would be expanded by 2,500.
HB 2681/SB 6332, legislation requested by the governor, allows the state to negotiate contracts with institutions of higher education to provide additional management flexibility in exchange for institutional efficiencies and cost effectiveness.
Locke is also calling on the Legislature to enhance his Promise Scholarship program to ensure that low- and middle-income students with potential have access to higher education.


K-12 Education
Locke is proposing or supporting legislation to:
Refine and clarify the Washington Assessment of Student Learning (WASL), particularly regarding the Certificate of Mastery that students will be required to complete for graduation starting in 2008, allowing for retakes and alternative assessments;
Strengthen the state’s Learning Assistance Program (LAP) and stabilize allocations to school districts that need the most help;
Approve legislation supporting the development of charter schools, to especially help struggling students meet state standards; and
Allow school districts to collect levy amounts already approved by voters.
Taxes, Regulations and Infrastructure
Locke has proposed legislation that would extend rural tax exemptions and help local governments attract and expand new businesses with investments in sewers, roads and other infrastructure.
Locke’s administration is also working on developing regulatory performance measures for the other regulatory agencies similar to those developed by the state Department of Ecology.
Research
In addition to his proposed legislation to extend R&D tax credits, Locke’s 2004 supplemental budget proposes spending $3 million in university research funding to help attract federal funding.
Locke is also promoting the state’s Bio21 initiative – a public-private, non-profit partnership designed to further fund Washington’s research capacity in biotechnology and information technology. The initiative merges and builds on these two great strengths to cure diseases and promote medical breakthroughs. It establishes Washington as a global leader in computer and biological sciences.


The governor today also stressed that the majority of the council’s initial recommendations, issued in January 2001, have been implemented. The council’s top recommendation in 2001 was improving transportation, and, under the governor’s leadership, the Legislature passed a $4.2 billion transportation-improvement package last year and the governor signed it into law.

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