Governor Gary Locke’s Remarks
Northwest Food Processors Association Annual Convention
January 21, 2004
Thank you John, and good afternoon everyone. I am honored to be here again at your annual convention. And it’s great to share the program with Governor Kulongoski.
I want to begin by thanking the Association. Thank you for nine decades of outstanding work representing the interests of food processors in the Northwest. Thank you for your tireless advocacy. And thank you for your collaboration in keeping the food processing industry strong.
It’s important that we keep this industry strong because it is vital to our region’s economy. Food processing is Washington state’s third largest manufacturing employer. This industry provides more than 32,000 jobs in Washington state, and 65,000 jobs in our three states combined.
I’ve had the opportunity to visit many of the 174 food and beverage processing plants in Washington state. I have seen major investments in new technology. I have seen clear evidence that our food processing industry is determined to compete globally. New products, new production processes, new technology and skilled workers—all to make sure food processing remains one of Washington’s key industries.
I have also seen how important this industry is in the everyday lives of our citizens. Equally important, this industry is central to the thriving agriculture industries of Washington, Idaho and Oregon. In my state, agriculture employs nearly 200,000 people directly. It is Washington’s largest employment sector. And a thriving agriculture industry depends in large part on a strong food processing industry.
My administration has been committed to a vibrant, healthy food processing industry. And together, we have worked in partnership to honor this commitment successfully.
We have made great progress over the past several years in keeping this industry competitive.
In Washington, we’ve made progress in keeping taxes reasonable.
My administration proposed consolidation and simplification of B&O taxes, which resulted in a 58% reduction in the fruit and vegetable processors’ wholesale B&O rate.
We also expanded manufacturing machinery and equipment sales and use tax exemptions to include rebuilding, repairing and cleaning of equipment.
When some called for repeal of sales tax exemptions for the purchase of manufacturing machinery and equipment, we said “No!” And we prevailed.
I also signed legislation creating a 100% sales tax exemption on the construction of warehouse space more than 200,000 square feet.
And last year my Priorities of Government budget proposal was passed by the Legislature. We avoided a general tax increase during tough economic times. Now our state is on the rebound.
We’ve also made progress in unemployment insurance reform. A major overhaul as proposed by a coalition of businesses, including food processors, was passed in 2003.
And we opposed legislative proposals that would have been damaging to the food processing industry.
We’ve made progress in worker training. We provided $1.2 million in funding for incumbent worker training in the food processing industry over four years.
We’ve made progress in water conservation and reuse. Under recent legislation, processors have an exclusive water right to treated wastewater from processing plants.
And we’ve made progress in ensuring adequate and affordable energy to meet demand. We streamlined the permitting process for new power plants.
During the energy crisis of 2001, we re-opened a closed power plant to provide electricity to Bellingham Cold Storage during the energy crisis. And we opposed the breaching of the Snake and Columbia River hydroelectric dams. We need to focus on other ways to enhance wild salmon runs to the same degree breaching would achieve.
We have all been partners in this progress, and we have done a great job of keeping the food processing industry strong for our states and for the region.
But we can’t afford to rest on our laurels.
Our regional food processing industry continues to face intense business pressure. Global competition has increased. We are still recovering from tough economic times. Too many of our plants have been forced to close already, and others struggle to avoid joining them.
We must continue to improve the business climate in our states. In Washington, manufacturing and agriculture are major components of a balanced economy. We need these industries and the jobs they provide. We will continue to support their prosperity and growth.
We must continue to invest in a skilled workforce through partnerships like the Eastern Washington Agriculture and Food Processing Partnership. What a success story!
Thanks in large part to this Association, this public-private partnership worked to close the skill gap in food processing and farming. Skill standards were developed for job categories in the industry. Customized training was delivered for more than 700 workers in 32 companies. And the workers who received the training also received wage increases due to increased productivity.
Let’s write more success stories like this one!
Our higher education system in Washington is committed to working with industry to meet skills standards.
The Consortium of Rural Eastern Washington Colleges has a grant to coordinate curriculum and provide customized training in agriculture-related fields. Walla Walla Community College has specialized training centers for viticulture, farm equipment, and turf management. Wenatchee Valley Community College is coordinating with Washington State University with a Tree Fruit Program specializing in industry needs.
Programs like these work in closing the skills gap. And everyone wins—training is directed specifically at industry needs and workers become more productive and are able to earn higher wages.
Let’s better develop agriculture and food processing industry clusters in our region. Let’s continue forging public-private partnerships that bring together state and local government, business, education and communities.
Working together in these clusters, we can continue to effectively develop a first-rate workforce. Together we can improve infrastructure. Together we can create a strong and sustainable economic foundation for the food processing industry, and continue to compete successfully.
As our economy grows, demand for energy will also grow. We must ensure that the Northwest has sufficient and affordable power. Power to light our businesses, our homes, and our schools. Power to drive our economy. Power to make sure that our key industries like food processing stay in business.
Similarly, we must make sure that there is adequate water for people, fish, farms and businesses. My proposed capital and operating budgets include funding to continue improving our programs in conservation, re-use, flow enhancement, and storage. We will have sufficient water to meet our goals and needs if we manage it efficiently and wisely.
We live in challenging economic times. Global competition is fierce. But I believe if we trust in our natural strengths and creatively collaborate with the right partners for the common good, we will succeed. The key is partnership—bringing the right people together for powerful results.
And that’s what the Northwest Food Processors Association is all about. I congratulate you on all that you have achieved over the years. Keep up the great work! Let’s continue to make sure that the food processing industry stays strong here in the Northwest for a long, long time.