Olympia Business Watch

AWB's Holiday Kids' Tree stands tall in Capitol Rotunda

If it seems a little early for the AWB Holiday Kids' Tree to go up in the state Capitol, it is.

With a special session of the Legislature starting Monday, Department of Enterprise Services volunteers and the coordinating staff at the Association of Washington Business had to shift into overdrive to get the tree up and decorated.

"We just needed to get it done prior to Monday," said Department of Enterprise Services volunteer Kari Moes while taking a break from handing ornaments up to another volunteer on a ladder.

About eight events are scheduled for the first day of the special session and security issues dictate there be no packages under the tree this year. "Everything's toned down a little bit for special session," said Moes. With the expected crowds and activity, an effort was made to keep the tree inside a relatively small footprint.

The 24-foot Noble fir tree was donated by AWB member Port Blakely Tree Farms. AWB also donated 5,000 new LED lights for the tree.Gov. Chris Gregoire will light the tree at 6 p.m. next Friday with the help of Senior Airman Samuel Lovelady, a Patrol Leader from the 627th Security Forces Squadron/Joint Base Lewis-McChord, along with his wife Dana, their daughter Kaydance (age 4) and son Samuel (age 2). And no holiday tree ceremony would be complete without a special visit from Santa Claus. 

For nearly a quarter century, the event has marked the end of AWB's annual Holiday Kids' Tree Project, which has raised a total of more than $320,000. So far this year, businesses and individuals have given more than $20,500.

Monies are distributed to representatives from rural fire departments to buy and distribute gifts and food to families in their communities.

"AWB has sponsored the Capitol's Christmas tree since 1989 and it is one of the best things we do each year," said AWB President Don Brunell.

If you would like to contribute, consider going online to make a donation. Monies accepted after Dec. 2, 2011 will go toward next year's program. A visual history of the tree program is available online.

Rago: Health care reform has launched period of 'convulsive change'

As he travels around the country talking about health care reform, it's common to hear expressions of frustration and even depression, Joseph Rago said Tuesday during the keynote address at our Health Care Forum in Seattle.

And yet Rago, who won the 2011 Pulitzer Prize for his series of Wall Street Journal editorials challenging the federal health care bill that eventually became law, said there are some good things that have come from the debate.

If nothing else, it has focused attention on an issue that has dogged businesses and the economy for a long time, Rago said during an informal keynote discussion with Jeff Gingold, a partner with Lane Powell and moderator for the forum.

Rising health care costs have wiped out any wage growth above inflation, and until America fixes the problem the country will not fully recover from the recession, he said.

Unlike some opponents of the Patient Protection and Affordable Care Act, Rago said he believes states would be smart to move ahead with establishing their own health insurance exchanges. If nothing else, they will collect federal money.

Gregoire lays out $2 billion in possible cuts, kicking off difficult budget debate

Gov. Chris Gregoire introduced a list of possible state budget cuts Thursday totaling a little more than $4 billion, including some $2 billion that she has tentatively chosen to include in her upcoming supplemental budget proposal.

They range from eliminating the Basic Health Plan and the Disability Lifeline medical program to cutting 15 percent from higher education and increasing class size by two students in Grades 4 through 12.

Gregoire made it clear she didn't like any of the options, but she also said lawmakers are running out of choices. The $2 billion in needed cuts must come from just $8.7 billion of the state's total $32 billion budget, Gregoire said, echoing what she told AWB members last month at our Policy Summit.

Critics attacked the governor's proposal, saying it should have included options for new taxes in addition to proposed cuts. Gregoire said she will turn her attention to revenue next, but she correctly noted that despite showing some signs of life, consumers and businesses both remain nervous about the economy.

"We need to restore consumer confidence in our state so people will spend," she said. "We need to restore business confidence so they will hire."

Brunell: Are we near the tipping point on minimum wage?

With Washington's minimum wage set to go above $9 next year, AWB President Don Brunell wonders in his weekly column whether it's about to reach the tipping point where it does more to harm workers than help them.

Ensuring that people can support themselves is a laudable goal. But as economics professor Bradley Schiller wrote recently in The Wall Street Journal, there is overwhelming evidence that higher minimum wages reduce the availability of jobs at the lowest end of the job market.

Part of the debate over minimum wage is about its purpose, Brunell says. Should it be high enough to support a family? Or is it a floor -- a minimum -- for unskilled people entering the job market?

Research suggests it's the latter. Most adults work at minimum wage jobs only for a short time; more than 70 percent of workers Dr. Schiller studied had moved onto higher paying jobs within two years.

That's similar to Brunell's own experience. He recalls busing tables and scrubbing pots for $1 an hour in the summer of 1963.

It may not have been a lot of money, but the family that owned the restaurant struggled at times to pay him.

"Eventually, they hit a tipping point," Brunell writes. "When they could no longer absorb additional costs they lost their business."

US gov't runs $1.3 trillion budget deficit in 2011

According to the Associated Presss today, the government ran a $1.3 trillion for the budget year that ended last month.  It is the third straight year it has operated more than $1 trillion in the red bringing the nation's debt to $14.8 trillion.

The 2011 budget deficit was the second highest on record. It's slightly ahead of the previous budget year's $1.29 trillion deficit but below the $1.41 trillion imbalance record in 2009. Our record debt is making it difficult for the U.S. government to borrow.

A decade ago, the government was running surpluses and trillion-dollar deficits seemed unimaginable. But those deficits now loom over tense negotiations in Washington.

Congressional lawmakers, led by Washington's Sen. Patty Murray (D), are under pressure to agree by Thanksgiving on where they can cut $1.2 trillion over the next decade. If they cannot, automatic cuts to Medicare, defense spending and other critical areas of the budget would go into effect in Jan. 2013.

As of this very minute, according to the federal debt ceiling clock, each U.S. citizen owes $47,508.  Even more troubling is that each taxpayer owes a whopping $132,165.

 

AWB pays tribute to Washington's top manufacturing companies

Sure, the housing market is lousy, but that hasn't stopped Monroe's Canyon Creek Cabinet Company from figuring out how to strengthen itself as a company -- and continue contributing to the community.

The company, named AWB's 2011 Manufacturer of the Year, has expanded into new product lines, including closet and storage products, continued its emphasis on green manfucaturing, and donated time and money to Snohomish County during the last few years.

All this at a time when the depressed housing market has forced other manufacturers to exit the industry.

Canyon Creek was recognized Tuesday during an awards ceremony in Spokane, along with six other manfacturing companies from around the state: Hobart Machined Products; Longview Fibre Paper and Packaging, Inc.; HOTSTART, Inc.; Spectralux Avionics; Sonderen Packaging, Inc.; and The Bogert Group.

The awards presentation was done in conjunction with the first-ever Inland Manufacturing Expo, sponsored by Greater Spokane Incorporated. McGladrey and UPS joined AWB as sponsors of this year's awards program.

More on the winners:

AWB president recognized for accreditation

AWB President Don Brunell, left, with Tom Donohue, president and CEO, U.S. Chamber of Commerce, receiving a plaque recognizing that AWB had, for the second time, been Accredited with Distinction

In June, AWB learned that it had been Accredited with Distinction by the U.S. Chamber of Commerce. The title is given to only a few chambers to recognize effective organizational procedures and community involvement.

AWB is just one of four accredited state chambers in the country.

Today, AWB President Don Brunell posed for a photo with Tom Donohue, the U.S. Chamber of Commerce president CEO, while he received a plaque commemorating the achievement during a U.S. Chamber event in Palm Beach, Fla.

"To be Accredited with Distinction is great news and a testament to our entire staff's hard work and professionalism," Brunell said in June. "It also underscores the value to our 7,500-plus employer members who look to us to represent their voice in the halls of Olympia, along with the U.S. Chamber back in Washington, D.C."

Timmons: 'Manufacturers want to create jobs'

Manufacturing in the United States continues to offer some of the best-paying jobs, but increasing regulatory burdens and skyrocketing business costs are rapidly threatening to erode the industry and our nation's competitiveness according to Jay Timmons, president and CEO of the National Association of Manufacturers.

Timmons was at Suncadia in Cle Elum Sunday to address members of the Conference of State Manufacturing Associations. AWB, the state chamber of commerce and manufacturing association, hosted the event; AWB President Don Brunell is the current chair of COSMA.

In an interview, Timmons shared his optimism about the industry, but was pragmatic about the challenges facing manufacturing and the country's businesses as a whole. While keeping one eye on the other Washington and the debt crisis ("it's a perfect example of the mess in Washington [D.C.]"), Timmons was frank about the vulnerability of our country's manufacturing industry.

"Other countries are salivating at the prospect of taking away our mantle of economic leadership, so they’re offering incentives, they’re making the regulatory regimes in their countries less burdensome, they’re lowering taxes –- they’re doing everything right while we’re doing everything wrong."

Both Democrats and Republicans in current and previous administrations and sessions of Congress share in the blame, in Timmons' eyes, for the state of the nation's competitiveness climate. Continued increases in corporate taxes, energy and regulatory costs have made it 18 percent more expensive to do business in the United States than in other parts of the world, and that's after you take out the costs of labor, he added.

"But those other costs that we can impact from Washington [D.C.] and the states are the things that are driving up costs of doing business and making manufacturers make decisions they don’t want to make.They’re patriotic Americans. They want to create jobs here in this country, they want to manufacture products here in this country, but unfortunately, they’re being forced by our own federal government to look elsewhere in order to be competitive."

I-1053 legal challenge could make voters ask 'What's the use in voting?'

Voters could not have been more clear last fall on Initiative 1053, The Columbian editorial board wrote yesterday in response to the legal challenge brought this week against the measure.

In Clark County, home of Rep. Jim Moeller -- one of the dozen Democratic lawmakers who signed on as plaintiffs -- the initiative passed with a 71.3 percent approval, the paper writes.

The Columbian brings up the statistic after noting that Moeller's Web page includes this statement: "A big part of my job -- by the far most important part -- is listening to what Vancouver and othe Clark County folks have to say regarding the issues before us."

On I-1053, the people have spoken. Loud and clear. And with respect to a supermajority vote of legislators to raise taxes, they have spoken several times.

Is Moeller listening selectively, the paper asks?

Every time lawmakers overturn the will of the people, they risk alienating them -- possibly to the point that voters give up.

The paper concludes with this warning: "Legislators who disagree certainly have their right to pursue a legal remedy, but that doesn't make them right. And they do so at their own peril, as voters justifiably ask: 'What's the use in voting, if our voice will just be ignored?'"

 

Sterling Financial CEO talks turnaround with business paper

California's North Bay Business Journal published an interesting Q&A with Sterling Financial CEO Greg Seibly over the holiday weekend in which Seibly describes the bank's turnaround. 

Spokane-based Sterling is the parent comapny of Sonoma Bank, which explains the interest from a Santa Rosa, Calif.-based business newspaper.

Seibly, who will take part in a panel discussion about the future of capital at AWB's Policy Summit in September, described how Sterling successfully navigated through an October, 2009 order by regulators to repair its balance sheet, and how it turned a profit in the first quarter of the year.

He predicted more consolidation in the banking industry -- in part because of the burdens of regulatory costs -- but he also described a "sense of guarded optimism in the West" regarding the long-term health of the economy.

Check out the full interview here.

Seibly will join Phyllis Campbell, Pacific Northwest chairman for JPMorgan Chase, and Matt McIlwain, managing director of the Madrona Venture Group, for a panel discussion Sept. 21 at the Policy Summit  titled "Where will the Money Come From?" Dick Davis will serve as moderator.

Details about the Policy Summit, including the agenda, a list of speakers, and how to register, are avaible online. The Policy Summit is on Twitter at @awbsummit. The 2011 hashtag is #awbsummit11.