Olympia Business Watch

More Suspected Cases of Flu in Washington

Seven more people in Washington state are suspected of having the H1N1 virus, bringing the state's total this afternoon to 13. Health officials say all seven of the new cases are in the Seattle-King County area.

If there is good news to be found, Dr. David Flemming, director of public health in Seattle and King County told reporters that while he expects an increase in the number of cases in our state, "to date, the level of severity has been closer to the more typical influenza virus you would see circulating during normal influenza season."

The Washington State Emergency Management Division has updated its disaster Web page with information for the private sector about the flu outbreak.

And, if you're looking for interesting displays of data about the outbreak, be sure to check out Google's H1N1 world flu map. 

The CDC has also set up its own channel on YouTube with videos on an array of flu-related topics, ranging from symptoms of the illness to instructions for the use of disposable respirators.

Finally, if you're trying to communicate about safe coughing and hygiene habits, be sure to check out this video created by OtoRhinoLounsburgology Productions. Could be a light addition to an upcoming staff meeting.

Six probable H1N1 virus cases in Washington state

Last night, public health officials announced that there were six probable cases of the H1N1 virus in Washington state: three in King County, two in Snohomish County and one in Spokane County. Health officials said it will take a few days for the U.S. Centers for Disease Control to confirm the test  results.

It's worth noting that the name of the illness has changed slightly, and is now referred to as the H1N1 virus. Health officials are recommending that the outbreak be referred to by its scientific name, H1N1 virus. Pork producers questioned whether the term "swine flu" was appropriate, given that the new virus has not been isolated in samples taken from pigs in Mexico. People were questioning whether it is safe to eat pork products (the National Pork Producers Council says it is). The U.S. Chamber of Commerce actually has a somewhat humorous post about the new name - if there is humor to be found in any of this.

Yesterday, the World Health Organization raised its alert level from Phase 4 to Phase 5, indicating that a pandemic is imminent. According to the New York Times, Phase 5 had never been declared since the warning system was introduced in 2005 in response to the avian influenza crisis. Phase 6 means a pandemic is under way (see WHO chart below). WHO is the directing and coordinating authority for the United Nations system. The Times also developed this updated online flu tracker with global details.

Businesses and individuals should remain vigilant about good hygiene practices, especially handwashing. The Department of Health has excellent online prevention resources that are available in multiple language formats and large print, too. The CDC recommends these four simple tips to stay healthy all year long:

• Cover your nose and mouth with a tissue when you cough or sneeze.
• Wash your hands often with soap and water, especially after you cough or sneeze. Alcohol-based hands cleaners are also effective.
• Avoid touching your eyes, nose or mouth. Germs spread that way.
• If you get sick stay home from work or school and limit contact with others to keep from infecting them.

 

Keeping Tabs on Swine Flu

Although there are no reported cases of swine flu here in Washington state, it is an issue that employers should be monitoring as a preventative step.

AWB is involved in the state's emergency management system as the business liaison. That means you can count on us to provide you with the latest news and information about issues like the swine flu and ways you can protect yourself, your employees and their families. Here's how we're rolling out that information:

• On the AWB Web site: We have added links to the Emergency Management Division, Centers for Disease Control and the Washington State Department of Health to our own Web site (cleverly listed under "Links and Resources").
• In AWB's e-newsletter, Fast Facts: Each Monday, members receive this e-newsletter and we'll keep you up to date with current news and resources about the flu in that publication.
• On this blog: Watch for updates and additional links and resources in Olympia Business Watch as the situation changes and develops. 
• Action Alerts: AWB will e-mail members special alerts on the topic, should they become necessary.

The state's DOH has great fact sheets online in English, Spanish, Chinese, Korean, Russian, Vietnamese and large type. And while there are no cases of swine flu so far in Washington state, it's just good practice to put preventative measures into effect to keep workplaces as clean and germ-free as possible.

Washington's Worker Memorial Day Reminds Everyone That "Safety is Job ONE!"

Today, families and friends from 81 Washingtonians killed on the job in 2008 gathered for the annual Workers Memorial Ceremony at the Washington Dept. of Labor and Industries (L&I) in Tumwater.  It is a solemn and somber ceremony which helps to ease the pain of a lost one knowing that others care and remember.

Give labor unions credit. They established the first Workers Memorial Day in 1989. April 28 was chosen because it is the anniversary of the Occupational Safety and Health Administration (OSHA) and the day of a similar remembrance in Canada. Every year, people in hundreds of communities and at work sites recognize workers who have been killed or injured on the job. Trade unionists around the world now mark April 28 as an International Day of Mourning.

In Washington, it is a day when employers and government workers join union members in remembering Moms, Dads, Sisters, Brothers, Aunts, Uncles, Grandfathers, Grandmothers, Nieces, Nephews and just friends who lost their lives while working.  It is also a day when we remember people seriously injured on the job.

Speaking at the ceremony were Gov. Chris Gregoire; Judy Schurke, Director, Dept. of Labor and Industries; Don Brunell, AWB President; Rick Bender, Washington State Labor Council President; and Bill Johnson, President of the Washington Self Insurers Association.

The ceremony is a living reminder that "Safety is Job ONE!"

A Flawed Approach to Delaying Paid Family Leave

OBW readers are well aware of Washington's paid family leave program, the controversial 2007 law that is set to begin this October but, given its shaky political support, has never been funded or implemented.  Finally in the last week of session, the Legislature is looking at a bill to push the program out to some unspecified point in the future.  But as this white paper points out, that approach has some serious flaws that need correction. 

The biggest of the flaws -- continued linkage of the program to the workers' compensation trust fund, a linkage which, if acted upon, would trigger a tax increase on Washington employers and workers in the middle of a recession -- absolutely needs to be stricken as this bill goes forward.

Olympia Business Review - Episode 19: Brunell’s view on Washington aerospace study.

Don Brunell, president of the Association of Washington Business, gives his perspective on the Deloitte Consulting aerospace competitiveness study. According to the findings, aerospace investments are bypassing Washington state for the more cost-competitive states like the Carolinas, Kansas and Texas. The study cites strikes, high workers compensation and unemployment insurance costs, a lack of coordinated worker training and education programs and infrastructure as the main reasons why aerospace companies are not coming to Washington state.

Key words: aerospace, economy, unemployment insurance, workers compensation, competitiveness, worker training, education, unionization, union relations.

To subscribe via iTunes, click here. 

To subscribe to the RSS feed, click here.

To download this podcast, click here.

Hydro is Renewable Power! Nine of 10 Northwesterners Say So

According to a recent Northwest RiverPartners poll of 700 registered voters in Washington, Oregon and Idaho, 88% identified hydro as a renewable source of electricity which is very similar to how they view wind and solar.  More over 93% of those polled believe hydro power is an essential and important use of the Columbia and Snake rivers

Despite those overwhelming numbers, most hydro DOES NOT qualify as a renewable energy source in Washington under I-937--the state's so-called renewable portfolio law. Washington's congressional delegation and state legislators ought to note that 79% of those polled support designating hydro as a renewable resource.  So the question for Washington lawmakers is "Why Not change state law to recognize hydro completely as renewable?"

Two-thirds of the votes in the Pacific Northwest oppose breaching dams on the lower Snake River viewing dam removal as an extreme measure to improve salmon runs on the Columbia and Snake rivers.  Removing those dams would be eliminating 1,100 megawatts of non-greenhouse gas producing electricity which is enough to power a city the size of Seattle.

The poll was conducted by Davis, Hibbitts & Midghall, Inc., Portland.

Green Stimulus Money Costs More Jobs Than It Creates, Study Shows

This article is from CNSNews.

President Obama uses Spain’s green initiative as a blueprint for how the United States should use federal funds to stimulate the economy. His economic stimulus package,which Congress passed in February, allocates billions of dollars to the green jobs industry. 

But the author of the study, Dr. Gabriel Calzada, an economics professor at Juan Carlos University in Madrid, said the United States should expect results similar to those in Spain.  Every “green job” created with government money in Spain over the last eight years came at the cost of 2.2 regular jobs, and only one in 10 of the newly created green jobs became a permanent job.

According to Dr. Gabriel Calzada, an economics professor at Juan Carlos University in Madrid, the United States should expect results similar to those in Spain. 

"Spain’s experience (cited by President Obama as a model) reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created,” wrote Calzada in his report: Study of the Effects on Employment of Public Aid to Renewable Energy Sources.

The study shows the high cost of electricity due to the green job policy tends to drive the relatively most energy-intensive companies and industries away, seeking areas where costs are lower.

Before we move ahead full steam with replacing traditional sources of energy generation with wind, solar and biomass, we ought to look at experiences in other countries around the world.  Build upon what is working for them, improve what is working for us and collectively move forward with proven technology which factories, businesses along Main Street and families in our neighborhoods can afford.

Don C. Brunell, President (DonB@awb.org)

 

The U.S. Postal Service: Is "Service" the Operative Word?

Picture what use to be:  On April 15, postal workers would stand outside the post office collecting tax return envelops and post marking them for April 15 so taxpayers could get their tax returns mailed on time. Cars would lined up for blocks in some cities especially the closer the clock got to midnight. It really became somewhat of a festive atmosphere with people actually coming into the post office to by stamps and mail their returns. Outside people would thank the jovial postal worker for saving their bacon.

It use to be a classic "WIN WIN" for the U.S. Postal Service and taxpayers.  It is what customer service is all about.

Fast forward to last night:  I arrived at the post office in Olympia just after it closed (roughly 6 p.m.).  A postal worker was posting signs on the doors and mail boxes telling people if they had a postage stamp on their envelops and dropped it in the mail slot, they would not be postmarked until APRIL 16---one day beyond the IRS deadline.  In response to questions from a gathering stunned crowd, the worker said budget cuts prevented the post office from providing its traditional April 15 service and the only alternative was to drive 30 miles to Tacoma or go to the postage metering machine and buy a 42 cent postmark.

So people started lining up at the machine and pealing off postage stamps from their envelops. You can only imagine the satirical comments which ensued.  The machine ran at a snail's pace and people using credit cards had a minimum $5 purchase.  After a half hour and having some kind Samaritan give me one of her excess 42 cent postmarks, I mailed my return with the April 15 postmark on it.  Yahoo! But by this time the line was now outside the building and people were getting a little testy.  That was 6:45 p.m.  I can only imagine what it was like between 10 and midnight.

If the recent switch in service at the U.S. Post Office is any indicator of what is to come with government, brace yourselves.  What the postal service proved last night is government runs on government's schedule and in government's way.  "Cut the budget and we'll whine and curtail service until we can get enough money to operate in our usual and customary way.  As for the customers?  Tough luck, we're in control here!"  Obviously what they forget is that extra money they want comes our taxes and does anyone have to be reminded of what a dent government takes out of our paychecks, during income tax season?

If elected officials and bureaucrats really want to focus on people's priorities and needs, they would reverse the paradigm and look at service from a "CUSTOMER'S NEEDS" point of view.  If that would have happened last night, can you imagine the attitude shift when the U.S. Post Office asks for yet another hike in postage rates?

Is it any wonder that UPS is beating the socks off the U.S. Post Office? 

Don C. Brunell, President (DonB@awb.org)

Employers urge Senate to return to original unemployment bill

Today, AWB joined more than 80 business associations, businesses and individuals in urging the Senate to reject House amendments to Substitute Senate Bill 5963. Read the letter sent to members of the Washington State Senate here.

Last Friday, lawmakers in the House altered the bill, which had originally gained the support of the broader business community in a deal that would have brought the state's unemployment insurance system back into conformity with federal law. The resulting amendments would increase insurance rates for businesses and give unemployment benefits to those who voluntarily quit their jobs.

As the letter to lawmakers points out, now is not the time to increase the stress on private employers, which are the backbone of our economic recovery.Washington businesses pay one of the highest unemployment insurance tax rates in the country -- a major factor in cost competitiveness.

Today's Yakima Herald Republic has a strong editorial on the UI issue, as well.

Higher Taxes on Energy Will Slow Recovery and Hurt Working Families

More Taxes Everywhere!  Who is it hurting?  US----families and employers working hard to provide jobs for people, pay their bills and taxes, and bring Main Street America back to prosperity from its economic doldrums.  And while it may be fashionable for politicians to wax on and on about taxing "BIG OIL," the question President Obama, those elected to Congress, and politicians at the state and local level should again be asking:  "Who really is hurt?"  Inescapably, the answer is US--the average American.

Higher taxes only slow job development and economic recovery.  Raising taxes in a time of economic decline is a recipe for disaster. President Hoover did it in the 1930s, President Carter did it in the 1970s and President Obama wants to do it now. Higher industry taxes could result in less energy security. They would be felt throughout the economy, discouraging business expansion, investment and job creation. They also lead to higher costs for consumers—taking money from American households

Here is what you can do about it.  A majority of Americans support domestic access, and the oil and natural gas industry should be encouraged to develop our nation’s vast energy resources. This would improve America’s energy security, create jobs and provide federal, state and local governments with more than $1.7 trillion in new revenues.

President Obama recently sent Congress a budget proposal that included $400 billion in new taxes and fees on the U.S. energy sector—a plan that will put an economic burden on hard-working Americans and their families. As Congress considers this proposal, it is critical to look beyond political rhetoric and focus instead on the reality behind these new taxes.

Raising taxes is not the answer.  Stimulating the private sector is.  Remember the words of Hurricane Hazel McCallion, the 88-year old mayor of Mississauga, Ontario. McCallion has been Mississauga's mayor for 31 years, holding office since 1978 and in the last election received 92% of the vote. 

McCallion's secret to success is "look out for your people, keep taxes down and bring lots of jobs into the city."  Amen.

Don C. Brunell, President (DonB@awb.org)

Voters Sentiment Worst Since 2005: Taxes and Bad Economy Fueling Pessimism

 Washington Voter Mood: Historic Trends
“Would you say things in Washington State are generally headed in the right direction, or would you say things have pretty much gotten off on the wrong track?”

According to a Moore Information Survey released yesterday, voter sentiment is not good in Washington.  In its explanation, Moore says:

"Our recent survey of Washington voters finds the electorate in a sour mood, largely fueled by the state of the economy. Today, a 51% majority of the state’s voters describe things in Washington as headed “off on the wrong track,” while just 37% say things are headed in the “right direction.” The remaining 12% has no opinion. Historically, voter “mood” is directly correlated with the state of the economy – in good economic times, optimism soars, and in bad economic times, hopes fade.

Today’s sentiment is the most negative we have seen since January 2005 (35% right direction, 51% wrong track). The lowest point was in June 2003, when fully 65% of voters said things in the state were off on the “wrong track.”

Top of Mind Issue Concerns

As we are seeing all over the country, the top of mind concern among Washington voters today is the economy. In fact, in an open-ended question, fully 51% cite the economy or jobs as their leading issue concern today.

No other issue even comes close to this level of worry – the second highest mention is taxes at 9%, followed by concerns about education (8%), the budget deficit (6%) health care (5%), traffic/transportation (3%) and government waste (3%). The economy tops the list among all voter subgroups today.

Most Important Issue Facing Washington
“What, in your opinion, is the most important issue facing people in Washington State today?”

Study: What if Boeing left Washington?

That's the question the Washington Research Council sets out to answer in its new competitiveness brief. You can read their complete analysis here in a PDF. Among the findings:

• Boeing has a jobs "multiplier" of 3.96, meaning the company supports nearly four additional jobs in the state.
  
• The company’s departure would mean a permanent reduction
  of 285,000 jobs.
  
• Without the draw of aerospace employment, housing prices
  would fall by as much as 6.5 percent by 2030.
  
• Statewide personal income would decline by nearly 9 percent.

The Washington Alliance for a Competitive Economy (WashACE) funded the research, which looked solely at the impact of Boeing, and not the greater aerospace industry. For that, you can look to the Deloitte study rolled out last week by the Economic Development Council of Snohomish County.

Jobless rate nears 10 percent

More angst for the economic mill in Washington state this morning.

According to the Employment Security Department, Washington's jobless rate climbed to 9.2 percent in March, up from the revised 8.3 percent reported in February. By comparison, Oregon's rate jumped to 12.1 percent in March.

Among the ESD's findings:

• An estimated 344,069 people (not seasonally adjusted) in Washington were unemployed and looking for work in March.
• The state lost an estimated 20,000 non-agricultural jobs last month, seasonally adjusted. 
• The state lost 99,100 jobs from March 2008 to March 2009, a 3.3 percent decrease.
• Only the education and health-services sector (up 1.3 percent) and government services (up 0.8 percent) added jobs in the past 12 months.
• Nationally, employment declined by 3.5 percent over the past year.

Despite the sour news, some companies are finding ways to cut costs and keep the doors open without layoffs. The upcoming spring issue of Washington Business magazine will examine some of these companies and find out how they're making ends meet in this tough economy.

Aerospace Council Must Focus on Cost Competitiveness in This Legisaltive Session

The new state Aerospace Council, which Gov. Chris Gregoire asked the legislature to create, has a lot of work ahead of it to make Washington cost competitive and attractive to aerospace companies looking for a new locations or to upgrade current operations.  Lawmakers, who are set to adjourn later this month, have an opportunity to address some of those cost disadvantages before them leave Olympia.

Gregoire, who testified for the legislation yesterday in the state House, wants to confine the council to the aerospace industry.  Rep. Ed Orcutt (R-Kalama), a member of the House Community and Economic Development and Trade Committee told KOMO that he believes the council would not be necessary if the legislature would address competitiveness issues for all businesses in Washington. Orcutt voted to oppose the bill on those grounds.

The issue of location is not new. In the winter issue of Washington Business magazine, Boeing Commercial Airplane President Scott Carson told of a changing, more competitive world — a world where location is a choice. Translation: the company must move to where it can compete. Today, more than half of Boeing’s 163,000 jobs are outside Washington.

In testifying in support of the proposal, Boeing, AWB and the Washington Roundtable asked the Governor and legislature to fix the unemployment insurance system this session.  In particular, they urged them to reject the House amendments to SB5963 which would add more cost to employers who are sole contributors to the unemployment insurance system.

The location issue came to a head last week when a study by Deloitte Consulting and commissioned by the Snohomish Economic Development Council went public.  It concluded that aerospace investments are bypassing Washington in favor of Texas, Kansas, North Carolina and South Carolina. The key reasons keeping Washington from consideration include strikes, high workers compensation and unemployment insurance costs, a lack of coordinated worker training and education programs and infrastructure.

Many of these issues have been identified through the competitiveness work jointly commissioned by AWB and the Washington Roundtable starting in 1999. AWB and the Washington Roundtable partnered to form the Washington Alliance for a Competitive Economy (WashACE).  WashACE now encompasses many local chambers of commerce and trade and professional organizations, all of whom, are working to attract and retain jobs in Washington's private sector.

The big question is what will the labor union response be?  The Washington State Labor Council (AFL-CIO) said: "the Deloitte recommendations are nothing more than Boeing's legislative priorities.  Period."  So while the Boeing machinists union are part of the aerospace council, it appears the broader union organization may not participate.  If that is the case it is unlikely the unions will back off the costly House unemployment provisions....and that would be an undesirable launch for the new council.

Don C. Brunell, President (DonB@awb.org)

State Sales Tax Hike? Possibility

According to The Seattle Times, House Speaker Frank Chopp (D-Seattle) said there's better than a "50-50" chance lawmakers will ask voters to increase the sales tax to help backfill proposed cuts to state health programs.

A temporary sales tax increase "has numerous positive attributes to it. It's targeted, it's a fairly modest amount in the grand scheme of things, but it goes for some incredibly important core services, for hospitals, public health and nursing homes," Chopp told Times reporter Andrew Garber.

Senate Majority Leader Lisa Brown (D-Spokane) has been talking at news conferences and on her Web page recently about a ballot measure that would increase the state sales tax by three-tenths of a penny, or 0.3 percent, to help offset budget cuts. While the lawmakers hint that the 0.3 percent would be temporary, that is not clear. 

In 1981 when lawmakers faced a revenue shortfall, the state sales tax was raised from 5.5 percent to 6.5 percent and it was permanent.  They also extended the state sales tax to food for 14 months and it phased out as planned.

The state Department of Revenue estimates that a 0.3 percent increase in the state sales tax could raise about $644 million during the next two-year budget cycle.The state sales tax is currently 6.5 percent. In King County, it's 9.5 percent for most purchases, and 10 percent in restaurants and bars. Last week, a 0.5 percent sales-tax increase went into effect in much of King, Pierce and Snohomish counties to pay for expansion of Sound Transit light rail, express-bus service and commuter trains.

The latest polling data from Moore Information on a temporary sales tax increase to solve Washington's revenue shortfall would be a "tough sell" according to polling data from Moore Information.

Specifically, Moore asked voters if they would vote for or against a “temporary increase in the sales tax, from 6.5 percent to 7.5 percent, lasting two years, to ensure that education and other important state programs have adequate funding.” By a 56 percent to 39 percent margin, this proposal is opposed, and just 5 percent are undecided.

Don C. Brunell, President (DonB@awb.org)

Sales Tax Hike Would Be Tough Sell in Washington

The latest polling data from Moore Information on a temporary sales tax increase to solve Washington's revenue shortfall would be a "tough sell" according to polling data from Moore Information.

Specifically, Moore asked voters if they would vote for or against a “temporary increase in the sales tax, from 6.5% to 7.5%, lasting two years, to ensure that education and other important state programs have adequate funding.” By a 56% to 39% margin, this proposal is opposed, and just 5% are undecided.

Moore's analysis revealed:

"Not surprisingly, the most notable differences in opinion about the sales tax increase are by party and region. Regionally, Seattle residents are divided about the sales tax increase but there is majority opposition elsewhere in the state, with Eastern Washington residents most widely opposed. By party, Republicans are widely opposed, and there is two-thirds opposition among Independents, but Democrats are in favor. Age also plays a role in sentiment about a sales tax hike – a majority of younger voters (age 18-34) are in favor but there is majority opposition among voters age 35 and older. Among the most frequent voters (voted in all four of the four most recent elections), this proposal is opposed."

Data reported are from a telephone survey conducted April 4-5, 2009 by Moore Information, Inc., among a representative sample of 500 voters in Washington State. Potential sampling error is plus or minus 4% at the 95% confidence level. Party distribution: 40% Republican, 46% Democrat, 14% Independent/other.

Canada's Sixth Largest City is Debt Free and Run by an 88-Year Old Hockey Playing Mayor--Hurricane Hazel McCallion

 

Alaska has its "Hockey Mom Governor", Sarah Palin,  who became the Republican vice presidential candidate in 2008.  Canada has its "Hockey Playing Mayor"  She is 88-year old Hazel McCallion and she is the mayor of Mississauga, Ontario, a suburb of Toronto.  She is a former professional hockey player who grabs her skates, hockey stick and puck and still hits the ice almost every day in the winter.

Mississauga is the sixth largest city in Canada and is debt free with $700 million (Canadian) in reserves. McCallion has been Mississauga's mayor for 31 years, holding office since 1978. She is affectionately called Hurricane Hazel  and in the last election received 92% of the vote. 

Mississauga is now the fourth most populous incorporated municipality on the Great Lakes, surpassing both Milwaukee and Cleveland over the last decade. From 2001 to 2006 the population continued to increase 9.1%.  Mississauga also boasts one of the largest corporate/financial districts in Canadawith major international companies having their Canadian headquarters located in the region including Microsoft, Wal Mart, General Electric and Pepsico.

Her secret to success is "look out for your people, keep taxes down and bring lots of jobs into the city."  She has a great sense of humor, boundless energy and doesn't plan to retire.  This is a mayor to die for.

Don C. Brunell, President (DonB@awb.orb)

Forbes Puts Washington in Top 10 for Average State Tax Burden

According to Forbes, Washington ranks as the 8th highest state for average state tax burden in the nation. We rank behind Vermont, Hawaii, Connecticut, Minnesota, New Jersey, New York and Massachusetts.  Rounding out the top 10 are Washington, Wyoming and Pennsylvania. 

The Forbes report was released at the end of March.  It shows Washington's average tax burden per person is $2,553 compared to Vermont's $3,861, Connecticut's $3,596, Massachusetts' $2,953 and Pennsylvania's $2,223.   Forbes states:

"Federal taxes and worries about the IRS make sense in April. But as April 15 approaches, citizens in many places have quite a bit to worry about from their state governments as well. Based on U.S. Census Department numbers, Forbes calculated the highest individual state tax burdens based on property, individual income, sales, alcoholic beverages, tobacco, motor vehicles, hunting and fishing, motor fuels, death and gift taxes, as well as insurance premiums." 

Specifically about Washington, Forbes says:

"Thanks to California, the West Coast has a reputation for heavily taxing businesses. Washington, however, likes to spread the burden around, making it the leading Western state for taxes. There are low property taxes in the state, and no personal income tax, but just try and buy something. Sales taxes--which come out to $2,181 per person--account for 85% of personal taxes paid."

While some may use the high sales tax burden as fodder to reignite the effort to pass a state income tax, it is important to remember that 54% of the initial state and local taxes collected in Washington (including unemployment and workers compensation insurance) come from business.  

These are difficult times for Washington employers, families and those we elect to office.  Carving up a smaller revenue pie is acrimonious and hard.  Hopefully, we will position our Main Street businesses to lead us back to prosperity and the sooner, the better for all of us who want to work, live and raise our families here. 

Don C. Brunell, President, (DonB@awb.org)

Prominent National Economists Counter: Higher Taxes Don't Stimulate Economic Recovery

A few weeks ago, a group of 20 economists (nearly all from Washington's public colleges and universities) signed a letter to Washington lawmakers stating that higher taxes would help economic recovery. 

They wrote: Tax increases are less problematic because individual consumers, especially those with higher-incomes, are unlikely to reduce consumption by the full amount of the tax increase.

Implementing deep cuts in government spending and declining to raise revenue through tax increases is not an effective strategy to guide Washington State out of this recession. The best strategy is to continue our long-term investments in education, health care, community vitality, and economic security.

On Sunday, the Washington Policy Center sponsored an ad in The Olympian signed by 30 prominent economics professors from across the nation countering that higher taxes are NOT good for economic recovery.  Here is what they had to say:

"Despite some news reports, not all economists believe increasing taxes is the best way to overcome Washington's state budget deficit,  In fact, we believe that raising taxes during a recessionary period is contrary to responsible economic policy and instead will thwart the state's economic recovery. Leaving earnings in the hands fo individuals and businesses is the best way to help grow the private sector, creating jobs and lead to higher levels of consumption. 

Increasing taxes at this time will shift necessary from the private sector to the public sector, thereby depriving private enterprise of the source of true economic growth and making Washington state even less competitive fore new businesses and jobs.  Higher taxes will depress the short-term economic growth needed to bring Washington out of the recession and will reduce prosperity in the medium and long term.

Amen!  AWB believes it is the private sector--Main Street businesses providing jobs and tax revenues which will drive us back to prosperity.

Don C. Brunell, President (DonB@awb.org)

 

Boeing Orders Plunge in March While Deliveries Increase

There is some good news and troubling news for Washington's economy coming out of Boeing today; however, even the good news is tempered by growing global economic concerns. 

According to The Seattle Times today,  Boeing Co. said Thursday it received orders for just six passenger and freight jets in March, down sharply from the same month a year earlier, as the global economic slowdown keeps battering aircraft demand. During the same month last year, Boeing booked orders for 99 jetliners. 

A major concern is Boeing net commercial orders for 2009 stand at a negative (-4) aircraft.  Since the beginning of the year, there have been 24 737s and 4 777s ordered, but 32 787 orders have been canceled.

Now to the good news side, Boeing said it delivered 121 commercial aircraft in the first three months of 2009, up 5 percent from the first quarter of last year. Fifty of those deliveries occurred in March.

Don C. Brunell, President (DonB@awb.org)

Alaska Lawmakers Considering Retaliatory Oil Tax

According to a March 31 article in the Anchorage Daily News, a bill imposing a nearly $16 a barrel surcharge on North Slope crude destined for Washington state was introduced in the Alaska House earlier this week. 

Alaska House Speaker Mike Chenault, R-Nikiski, calls his bill a retaliatory measure and openly said his bill aims to prevent the Washington legislation from passing. "We've looked at the issue of how can we protect Alaskans from paying for their (Washington's) state government," Chenault said. "This is a counteractive measure to get them to stop."  He has 26 co-sponsors in the House which is composed of 40.

Washington currently exempts fuel exports from its 37.5 cent fuel tax. The measure would lift the exemption on the approximately 2.4 billion gallons of fuel exported annually to eight other states. The measure would raise about $500 million a year for statewide transportation projects, according to a Washington analysis.It would generate about $7.7 million a year from Alaska, according to Washington's analysis.

According to the Anchorage daily newspaper, Washington Rep. Jeff Morris, D-Mount Vernon, said it was discussed in a mix of revenue-generating options but does not stand much of a chance to make it into law."It's pretty unlikely that it will move. We would need a two-thirds majority to get a tax increase through, which is tough," Morris said.

While Alaska is a primary source of crude oil for a handful of Washington oil refineries, Washington is a primary supplier of containerized products to Alaska and Seattle is the key stop for the Alaskan cruise ship industry.  Last year Washington's legislature flirted with a $100 per shipping container tax.  Alaska lawmakers passed resolutions opposing the container tax.  It died when lawmakers left Olympia last year. 

For many years, Washington and Alaska have had great relationships and are mutually dependent upon one another.  As both states scramble for tax dollars and to revitalize their economies, hopefully the latest dust-up will settle and fade into the sunset.

Don C. Brunell, President (DonB@awb.org)