Governor Gary Locke’s Remarks
Association of Washington Business Legislative Reception Luncheon
February 12, 2003

Good afternoon. It’s a pleasure to be here again this year.

Next year will mark the 100th anniversary of the Association of Washington Business. More than any other business organization in our state, AWB has played a major role in helping to shape and influence public policy that encourages economic growth. Thank you for your ongoing efforts and valuable contribution.

When I addressed the AWB policy summit last September, we faced a budget deficit and our state’s economy was struggling.

It’s been said that the more things change, the more they stay the same. Our budget deficit is $2.4 billion, and our state’s economy is still struggling.

But some things have changed. Since that September meeting, I have proposed my budget. We are taking steps to create more private sector jobs. Today I’d like to talk about the budget, jobs and what we need to do to make progress toward economic recovery.

The results-oriented budget I’ve proposed is a dramatic response to our deficit. Nearly every state in America faces serious economic challenges – 48 states are facing huge deficits. But we are the first state in the nation to tackle our problems head-on by re-examining how we govern—and fundamentally changing how we make choices in allocating our resources. Our Priorities of Government approach is becoming a model for other states to follow.

We exhaustively studied all that we do—examining some 1,400 state government activities. The budget proposal clearly states what we believe are the priorities of state government: education, jobs, healthy families, safe communities, and protection of vulnerable children and adults.

The proposal will let us do what matters most without a general tax increase. A general tax increase in these tough economic times will hurt, not help, our economic recovery. The way to get back on our feet economically is to live within our means.

Holding the line on our state budget is just part of the solution. Jobs are the key to economic recovery. We must do all we can to create and support jobs in our state. I have a seven-point plan to create jobs that I’d like to review. I know that reviewing a seven-point plan may sound a little like sitting down to a seven-course lunch. But I believe each of these points is essential to creating jobs now, and to our state’s economic recovery.

How can we create jobs now and in the future?

First, build a better Washington. The Legislature’s approval of my state construction budget will mean more than 13,000 new private sector construction and other family-wage jobs during the next two years. These are jobs building and renovating facilities on the campuses of our colleges and universities, our public schools and our prisons. The proposal sustains 11,000 jobs in the two fiscal years that follow. My proposal allows for $2.5 billion in new public works funding. Let’s take advantage of the low interest rates!

Today I again strongly urge the Legislature to approve my 2003 capital budget so we can create thousands of jobs for the people who need and deserve them. And so we can start building and renovating facilities that our state’s students and schools, colleges and universities need.

Second, intensify trade. We must capitalize on our competitive advantage in international trade. Trade creates jobs. Last year, our trade missions to Japan, Korea, China and Singapore were successful in helping Washington businesses sell products and services to some of the world’s most promising markets. We returned from Japan and Korea with immediate new sales for Washington businesses. In December we promoted Boeing airplane sales in China and promoted biotechnology in Singapore. China is already our 3rd largest export trade partner.

It is a huge market with great potential for the sale of Washington products and services.
Washington companies will play a major role in the 2008 Beijing Olympic games.

And Singapore is now interested in funding biotech companies in our state. We must continue to pursue these golden opportunities to create jobs in our state. In fact, we’re sending a delegation in a few weeks.

Third, improve our business climate. We’ve made substantial progress since the Washington Competitiveness Council issued its recommendations. We must continue to improve our business climate to stay competitive in attracting and keeping businesses.

The Department of Ecology set a goal to act on 90% of water quality permits within 90 days. We’re on target to meet this goal. Last year, for example, we approved a Safeway distribution center—the largest construction project in Safeway’s history—in less than 60 days without lowering environmental standards – a key recommendation of the Competitiveness Council.

I would also like to thank the AWB for its support of our shorelines agreement.

In the last 12 months, five national companies chose Washington over other Northwest states for major distribution facilities and hundreds of jobs: Target, WalMart, Safeway, Ferguson Enterprises, and Home Depot. Together, these five companies will create about 1,400 jobs here and many more from related industries like trucking and work at our ports.

These companies chose Washington for many reasons. Washington has always been a great place to do business – with a great environment, a trained workforce and a prime location.

And we’ve been working very hard the past few years to make our state even more competitive. We’ve reduced the B&O tax on businesses, cut red tape, and streamlined regulatory processes. While national organizations have criticized our tax system, we’re among the best in the management and administration of the tax system.

I think you’ll agree that we don’t want efforts at regulatory reform to make us slower and less responsive to businesses’ needs. For example, when the Legislature changes the small business tax credit, we must be able to change the rule immediately so that businesses can use it to calculate their tax credit.

When a tax law changes, we must get a new rule out as quickly as possible. When the legislature changes the eligibility requirements for property tax exemptions or the senior citizen deferral program, we must amend the rules as quickly as we can to get information out to those who want to take advantage of the exemptions.

But some of the bills now being considered—to require a rule to wait through a legislative session before it can take effect – would slow us down, possibly for up to 18 months.

When it comes to red tape, that doesn’t cut it.

We must continue doing all we can to improve the business climate in Washington. And we will.

Fourth, provide local tools. We need to give Washington communities more effective economic development tools to help attract and keep businesses. Our Constitution prohibits many incentives that other states use to attract businesses. I am proposing a new funding tool allowing local governments to finance the critical infrastructure that businesses are looking for in making location and expansion decisions. Our proposal will help attract at least $400 million in private sector investment.

We also need to continue supporting tools that work well. The Community Economic Revitalization Board program has attracted a British Columbia manufacturing company to Blaine, a grass seed cleaning operation to Odessa, and a technology center to the Port of Chelan County. This program has created thousands of jobs for rural areas. But it still does not have a permanent, stable funding source. So I’m submitting legislation to provide permanent funding to keep this program going. It’s a strong source of good jobs for rural families.

Fifth, promote technology. We must promote Washington’s emerging technology strengths. We are pursuing the development of more emerging industries.

For example, state government is a partner in the Northwest Energy Technology Collaborative. The Collaborative will promote Washington’s clean energy industry, a potential multibillion industry.

We are also promoting bio-information (bio-tech with computer sciences) by providing seed funding to coordinate private sector and university partnerships in biotechnology and information technology. And we’re supporting development of technologies for converting agricultural waste into valuable materials otherwise made from petroleum and chemicals. These are just three good examples of how we can creatively develop and diversify our economy for a prosperous future.

Sixth, strengthen the education/job skills connection. We must continue to create jobs with investments in education, especially by supporting industries of the future like biotechnology and software. I’m proposing $20 million in higher education funding to expand enrollments at our colleges and universities by more than 1,500 students. These new enrollment slots are dedicated exclusively to such high-demand fields as engineering, computer science and health care. Our state’s businesses continue to need these critical skills.

I don’t want Washington companies to have to hire people from out-of-state to meet their needs. I want Washington citizens to have the first chance at filling these good paying jobs.

We’re also providing funding to retrain more than 7,200 unemployed workers.

Seventh and finally, “the other Washington” must step up. We must continue to push Congress and the President for an economic stimulus package that helps our state’s workforce.

Just a fraction of what President Bush wants by way of a tax cut could be put to use on programs that create jobs NOW.

As we pursue this plan and work to create more jobs, we still need an efficient transportation system to attract and retain businesses. The transportation crisis is too important to ignore. We still need to fix our deadliest roads and highways. And making improvements to Washington’s roads, public transit, and ferries will also bring more family-wage jobs—thousands of them.

Our state’s transportation problems must be solved in Olympia. The longer we wait, the more it will cost. Let’s do it now!

I am confident that if government and business continue to work together and focus on our true priorities, better days are ahead. Together, we can make sure that Washington continues to be a great place to live, work, raise a family—and to do business.

Thank you.

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