Governor Gary Locke’s Remarks
Bellevue Chamber of Commerce Luncheon
December 17, 2003

Good afternoon. Itís always an honor to address this distinguished group. This Chamber has led the way in helping Bellevue businesses and building a great Eastside community.

By now you have all heard the news about the Boeing 7E7. We will be building the Dreamliner in Everett. Thatís great news for our state!

We worked hard to land the 7E7. In the near term, we value the good paying jobs with good benefits that the new program will bring.

But there was much more at stake than a few thousand 7E7 jobs, as important as those jobs are. The future of the aerospace industry in our state was at stake. If assembly of the 7E7 went elsewhere, other programs would likely follow. Tens of thousands of jobs would be lost. Our stateís economic future would have been significantly compromised.

What does this mean to other businesses? There are 68,000 aerospace jobs in Washington, 58,000 at Boeing. Each aerospace job supports nearly two additional jobs in our state economy.

A healthy aerospace industry helps all of our stateís businesses.

State taxes related to the industry totaled an estimated $500 million in 2002. This helps pay for government programs and services.

So every business and citizen in our state benefits from a vital aerospace industry. Thatís why we worked so hard to land the 7E7 final assembly work, and to keep Boeing in Washington.

That said, itís important that we also look past Boeing developments and focus on the larger issues of competitiveness and education.

In both areas, this was a great year for our state.

We did an exceptional job this year in improving our stateís business climate for all businesses.

The Competitiveness Council Scorecard issued at the end of the session tallied 32 bills that the Legislature passed and I signed into law this yearó32 bills that advanced the Competitiveness Council agenda.

Our centerpiece accomplishment: We passed a 10-year transportation improvement plan, with $4.2 billion in new transportation improvements across the state.

For Bellevue and the Eastside, the improvements include:

∑ $485 million for congestion relief and transit projects on I-405

∑ $102 million for:

o One HOV lane and one auxiliary lane in each direction of SR 520 between West Lake Sammammish Parkway and SR 202

o Complete interchanges at SR 202 and West Lake Sammammish Parkway

o Safety and congestion improvements on SR 520, SR 202 and Avondale Road

∑ Nearly $56 million for SR 520 bridge replacement & HOV projectófirst stage in replacing the bridge

∑ $15 million for two-way transit and HOV operations on I-90 between Bellevue and Seattle

I donít have to tell this group how welcome these transportation improvements will be!

We also made substantial progress in regulatory reform. The Department of Ecology, for example, set a goal to act on 90% of water quality permits within 90 days. Weíre on target to meet this goal.

We simplified municipal B&O taxation, and prohibited ďdouble taxationĒ of the same activity by two cities, giving greater predictability and encouraging investment in Washington.

We passed sweeping reforms to Unemployment Insurance, proposed by the business community. We passed Injured Workersí Compensation reform, proposed by my administration.

We put an exclamation point on the session with our efforts to keep the 7E7 production in Washington. We passed a $3 billion tax incentive package for the aerospace industry if the 7E7 is built in Washington. We showed that weíre passionately committed to keeping our great companies. This week, that commitment paid off in a big way.

We also continued to charge ahead this year in education reform. This past summer we saw very encouraging proof of success in our schools statewide. Our kids are making some of the greatest academic gains in the nation.

Our 4th and 8th graders scored above the national averages in both reading and writing. More Washington students are succeeding on Advanced Placement courses. Our state leads the nation in S.A.T. scores. The WASL scores released in August also showed great progress.

This was a good year. And itís essential to our stateís future that we extend our education improvements to all levels from preschool to graduate school. Itís essential that we continue to become more competitive.

Thatís why this fall I reconvened the Washington Competitiveness Council to focus more on higher education, education funding and business climate issues.

I met with the Council last week to hear their recommendations. The Council and I are in complete agreement on the need to harness higher education as an economic development tool. And I emphatically agree with the Councilís specific recommendations on K-12 and higher education and competitiveness issues.

In fact, Iím already working to implement many of these recommendations. I will continue to pursue executive orders, agency directives, and legislative agreements to make these things happen.

We have a very good start in education reform. But from preschool to graduate school, education requires more dedicated, permanent, and stable funding. We need to come up with funding solutions now.

Our education system will supply the first-rate workforce we need for a thriving, competitive state economy. A strong public education system prepares our children for a lifetime of achievement. And higher education should be viewed as a powerful economic development tool.

Think of all the companies and technology that have been spawned by just the University of Washington alone! Kidney dialysis, ultrasound, and the Hepatitus B vaccine were developed at the UW. PC operating systems and search engines for the World Wide Web were pioneered there too.

We must better harness higher education to help drive economic growth. We are home to some of the most innovative companies and accomplished universities in the country. We should be performing better in training people to work for these companies. Boeing, Microsoft, Starbucks and our other great companies hire the best and the brightest. We should make sure we educate and train them right here in Washington.

Many Washington companies need workers with post-secondary vocational credentials. But they canít find them. Weíre not producing enough! The Workforce Training and Education Coordinating Board performed a statewide survey of employers in 2001. They found that many had difficulty finding qualified applicants.

The Workforce Board estimates that currently only about 73 percent of the available jobs can be filled with qualified workers. Thatís a workforce gap of 6,700 workers. This gap will grow in the next few years.

Yet we keep turning away more and more students from our colleges and universities because of a lack of funding. Despite rising tuition, tuition only covers a part of the costs of educating students. The state pays the rest. Without more money from Olympia, colleges and universities wonít admit more students. We wonít produce an adequate workforce for the future, for the innovation economy.

We canít tell our kids to just wait a few years. Wait until the economic recovery is complete. Wait until we have more revenue available before attending college. We canít ask them to wait for the college and training they need right now. Especially when all those good jobs are going to people from out of state!

And companies obviously canít wait to fill their hiring needs for 2-to-4 years while our students attend college.

Itís painfully clear that we must focus now on higher education enrollments and funding, and on training for high demand fields.

The supplemental budget proposal Iíll unveil tomorrow increases state-funded higher education enrollment by as many as 5,200 full-time students. More than 2,700 of these slots are funded for high demand fields such as health care, computer science, math and special education instruction.

We are doubling the grant award levels for Promise Scholarship recipients, helping to make higher education affordable for more than 7,000 Washington students.

My proposed $92.6 million Capital Budget will create family-wage construction jobs now and help build badly needed facilities at our state colleges and universities.

Additionally, Iím proposing improvements in our Learning Assistance Program so we can help more kids with their reading, math and writing. More help for at-risk kids.

We must look to the future and guarantee that we are creating an environment where the industries of the future will thrive. The goods and services that will be sold in the future are being developed today. We must make sure that Washington continues to be a place where innovation flourishes and where innovators want to live and work.

Thatís why I support a continuation of the research and development tax credits that are due to expire in 2004. This is an investment in competitiveness and an investment in our future.

Our state should partner with local communities to fund the infrastructure they need for new and growing businesses. Tax increment financing is a tool that is used in 48 other states to allow growth to pay for itself. The additional tax revenues that state and local governments collect when businesses grow can be used to pay for the infrastructure needed to attract them.

My EDGE proposal provides a state match to local governments willing to invest in the future using this tool. We hope to get that passed this coming session.

Our stateís economic development is a shared destiny. We cannot afford a development imbalance. We cannot succeed without engaging the full potential of our state. We will only succeed together, playing to all of our stateís strengths. Rural and urban, business and agriculture, manufacturing and high-techówe are all part of the complex equation by which our state will prosper.

As I said, I am approaching the legislative session with education and business climate priorities in mind.

We need the help of our business community. I ask you to join me, working together to better our state. Together, we can make sure our state continues to be a great place to live, work and raise a family.

Thank you.

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