Governor Gary Locke’s Remarks
Washington Competitiveness Council
December 11, 2001

Thank you to the members of our state’s Competitiveness Council, Sheila Martin, Dick Thompson and the co-chairs (Kerry Killinger, Bud Mercer, Alan Mulally, Norman Rice and Judith Runstad). This was a monumental task and you approached it with patience and dedication. I want to assure you that I share your urgency for change. I too, want to make Washington a better place to do business and to get a good paying job.

Who could have known how important, indeed urgent, your work would become after the tragic September 11 attacks?

What began as a search for ways to ensure Washington keeps its competitive edge in business and industry ends with the need to pursue both long-term advantages for our state’s business climate, as well as the new jobs we need right now to help our state weather this economic crisis. We will do both.

I’m going to put to your report to work. You’ve given me a lot of good ideas to consider, and we have prioritized your recommendations. We initially selected those recommendations that I believe will give us a running start in improving Washington’s business climate while protecting our great state’s quality of life. It will aggressively implement the key recommendations in each of the main areas you've addressed. This short session needs to prioritize what things we can accomplish, but many can be done administratively.

In consultation with you, we will assess our performance in implementing these initial recommendations. And we also will develop an action plan for considering your other recommendations.

The most important place where we can make a running start is in transportation. We can energize our economy now. And build a foundation for future economic success.

The council has concluded that the single most important thing we can do to keep our state’s competitive edge is to enact a long-term transportation plan that fixes the congestion choking our economy.

We know demand has outstripped investment. Investing in our transportation system now will put people to work and keep our economy moving for years to come. Improving our transportation system provides lasting economic development opportunities in rural and urban areas, cuts congestion, improves safety, and enables employers to be more competitive.

Therefore, I am proposing to the Legislature a plan we have hammered out by transportation leader and my office close to a 9-cent increase in the gas tax – phased in over three years – to support a 10-year, $8.5 billion construction program in every part of the state.

Highway projects are identified in my proposal. Among the projects we address are congestion on I-405 and SR 167, I-90 east of Snoqualmie Pass, I-5 in Southwest Washington, and SR 240 in Richland. We will extend HOV lanes on I-5 north to Everett. We will tackle other projects such as replacing four state ferries built in 1927.

And I support completion of the Tacoma Narrows Bridge, as well as investments on SR 16 that tie into the bridge project.

My proposal empowers regions like Central Puget Sound to approve local funding to accelerate major corridor improvements like 405, a new SR 520 bridge, replacement of the Alaskan Way Viaduct.

Without these transportation improvements, our state’s prospects for economic recovery and continued vitality are at much greater risk.

Just recently, Moody’s, a major investment service and bond rating firm, noted that any further delay on transportation projects threatens Washington’s long-term economic growth. That's not only jobs for today's workers, but also jobs for our kids.

I ask you, the members of this council, to stand with me in urging the Legislature to act on transportation now.

All these projects create thousands of good paying jobs as our economy works its way out of a severe economic downturn.

The state transportation plan I am proposing -- that we need your support to pass -- will sustain 20,000 jobs over several years (an average of 15,900 over 10 years) and pump millions of dollars into communities throughout our state of Washington. In the long-term, the transportation investment will become the economic underpinning for the state for the next 50 years. It will allow us to keep the jobs we have, attract new jobs, and keep trade flowing.

We’re experiencing tough times. So, creating new jobs is a high priority for my administration, and that is why last week we restarted $880 million in capital projects that were put on hold after the September 11 attacks -- because of uncertainty about declining state revenue.

I’m counting on the Legislature to approve my plan to refinance a $200 million shortfall in the capital budget -- and in a way that creates another $100 million for a wide of array of needed projects all across our state. This refinancing plan will support 4,200 new jobs.

Regulations and Permitting
Another place where we will make a running start is in streamlining the state’s regulatory system.

Your report sounds an alarm over bureaucratic red tape surrounding land-use regulation and permitting, and I am going to change the regulatory culture of agencies involved in permitting.

I remain firmly committed to environmental protection, but I am just as certain we can achieve greater streamlining, more objectivity standards, and greater predictability in our permitting and regulatory agencies.

Businesses should be provided greater certainty. When businesses come to us needing permits for new development, they are going to know what it will take -- what they must do -- to get their project approved. They are already doing this on siting power plants.

This does not mean, however, that we will throw the standards out the door.

We will establish clearer standards and guidelines so there won't be any unseen hurdles that stall the process.

I am going to reduce the time and money it takes to get permits by creating a coordinated system that speeds up permitting.

I am going to expand the state’s one-stop Master Business Licensing program to include local governments, which also will save time.

And I am going to establish clear, focused leadership that brings major reform and accountability to this state’s regulatory system.

Paul Isaki, who most recently served as my chief of staff, will take on a new role as special assistant for business and regulatory reform. He will be accountable for making the permitting system work faster, and with more predictability. And his focus will be on the Department of Ecology.

The days of endless process in the permitting of projects -- projects we need to create jobs in our communities -- must end.

Water Law and Water Storage
As you rightly point out in your report, our current system of water laws does not provide the tools we need to meet the demand for clear drinking water for a growing population, for business and agriculture, and for fish.

My office has been working with our legislative leaders -- leaders from both parties in both houses -- to address each of these issues. We made great strides last year. This year we are focusing on:

  • Finding water for growing communities
  • Fixing 'use it or lose it' policies
  • Identify funding for water infrastructure

Taxation is another place where I intend to take action now.

And the budget I will present to the Legislature next week will contain no general tax increases on businesses or individuals.

I also will propose to the Legislature two pieces of legislation that you have requested to improve the fairness of our tax system:

  • First, I will propose legislation to clarify the current law on the business and occupation (B&O) tax deduction of investment income.

  • Second, we will propose reforms in municipal taxation requiring uniformity and eliminating the possibility of double taxation of businesses by local governments.

  • Third, I have directed the Department of Revenue to continue working with stakeholders to achieve greater clarity in the parameters of the manufacturing, machinery, and equipment sales tax exemption.

Human Capital and Innovation
I could not agree more about the importance of education and technology to our long-term economic success.

I support giving state colleges and universities tuition flexibility, so they can offer competitive faculty salaries in strategically important fields.

I will continue tying university and college enrollment increases to high-demand fields, while ensuring scholarships are available to assist students from low-income families.

I will propose to expand enrollment at community and technical colleges for worker retraining to 8,700 students, an increase of 1,500.

I will allocate $750,000 in new funding from the WorkForce Training and Education Coordinating Board for the job skills program to train workers for newly located or expanded businesses. This doesn't require legislative approval.

I will not waver from my commitment to accountability for K-12 education reform.

Benchmarking and Follow-up
I am committed to measuring our progress on these initiatives and on keeping a close watch on our competitiveness.

And I will meet with all of you several times a year to discuss the progress we have made on your recommendations.

Conclusion and Challenge
Finally, we must put this agenda for competitiveness and economic vitality to work -- this message must be heard and we must respond with a renewed sense of urgency.

With your support and continuing interest, I am sure we can make Washington a better place to do business.
Thank you for your time, your expertise and your recommendations.

You have done our state a great service.
Related Links:
- Washington Competitiveness Council
- Washington's Strategy for the Innovation Economy
- Workforce Training and Education Coordinating Board
- Washington State Legislature
- Washington State Department of Ecology
- Washington State Department of Licensing, Master Business License
- Water 2002

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