Olympia Business Watch

Brunell: The human spirit is our greatest asset

 

Wounded soldiers. The Boston Marathon bombing. The Cleveland kidnappings.

With the steady stream of bad news, it would be easy to despair for the human condition, AWB President Don Brunell writes in his weekly column.

And yet the stories of courage, strength, determination and hope told by the survivors of those tragedies and others serve as a powerful reminder of the indomitable human spirit.

Brunell recounts a few examples, including Army Sgt. Brendan Marrocco. Marrocco, who lost his arms to a roadside bomb in 2009, recently underwent a 13-hour double transplant surgery.

Issaquah native Adrianne Haslet, a professional dancer, lost her left foot in the Boston attack. She's vowing to dance again and run the marathon next year.

And the three women kidnapped as young girls in Cleveland and held in captivity for a decade are showing awe-inspring strength and presence of mind.

"We face many challenges today," Brunell writes, "but rather than think of ourselves as victims, we should emulate those who confront tragedy and violence with courage, refusing to be beaten, determined to prevail."

Boeing launches website to provide updates on 787 battery

Want to know the latest information regarding Boeing and the current 787 situation?

Boeing has made it easy to follow the issue by launching a new website equipped with information and status updates as the company works through a recent technical challenge on its 787 Dreamliner.

The investigation into two incidents continues by authorities in the U.S. and Japan, with focus on the airplane's batteries and electrical system. The site provides information about these critical systems, the company's internal processes and its work with regulatory authorities to ensure airplane safety and performance.

It features weekly updates, links to the latest company statements, and detailed information about the airplane's systems, including video and infographics.

Find it at 787updates.newairplane.com.

Lawmakers about to find out why Frank Luntz calls Pete Carroll 'the best' motivator

Photo by @rodmarphoto via Instagram

If Frank Luntz is correct, Washington lawmakers are about to get the pep talk of their lives.

Pete Carroll, head coach of the Seattle Seahawks, is coming to Olympia this week to meet with Gov. Jay Inslee and members of the state House and Senate, TVW reported this morning. Carroll's schedule includes a speech on the Senate floor at 11:15 a.m.

Luntz, who is best known for his work in politics, thinks Carroll is a master motivator and the best in the business.

"He's the best communicator in pro football," Luntz told Washington Business magazine for a Q&A published last fall. "Nobody holds a candle to Pete Carroll when it comes to relating to people and motivating them, and getting them excited and passionate about what they do. Carroll is the best."

In addition to his work in politics, Luntz advises corporate clients -- including pro sports teams -- about communication. His client list last year included 17 pro sports teams.

Brunell: A hydropower renaissance

 

The Grand Coulee Dam in 1942/Photo: U.S. Bureau of Reclamation

Decades after the "Eighth Wonder of the Modern World" -- the Grand Coulee Dam -- was completed in 1942, the world is experiencing a boom in construction of new hydroelectric dams, AWB President Don Brunell writes in his weekly column.

From China's gargantuan Three Gorges project, with triple the power generation of Grand Coulee, to Peru's plans for harnessing the power of the Amazon river, world leaders are recognizing the value of clean, efficient hydropower.

The Laotian government is proposing a network of 11 dams on the lower Mekong River, similar to our Columbia and Snake River hydro network complete with a mammoth and controversial 1,260 megawatt dam on the lower reaches of the river.

Unlike the controversial Xayaburi proposal in Laos and China's Three Gorges dams, the Columbia and Snake River network did not cover millions of acres of farmlands and forest or displace millions of people, Brunell writes.

"We should realize that we have what the rest of the world is seeking: a reliable source of clean, affordable renewable energy."

Video Rewind: Heuschel, Sturdevant kick off AWB Lobby Lunch series

Mary Alice Heuschel, chief of staff for Gov. Jay Inslee, and Ted Sturdevant, the governor's policy director, spoke last week at our first Lobby Lunch meeting of the year.

As we noted in a blog post, they focused their remarks on job-creation and how the new governor intends to achieve his top priority.

We've rounded up a few video clips of the lunch session, beginning with Heuschel talking about the four "buckets," or areas of focus related to job-creation: education, health care, economic development and efficient, effective and transparent government.

Next up is Sturdevant discussing this year's legislative session priorities, including transportation, education (specifically science, technology, engineering and math, or STEM), health care, and clean energy.

And finally, Heuschel -- the former superintendent of the Renton School District -- explains how she ended up serving as Inslee's chief of staff. "You don't plan these things," she said.

Lobby Lunch: Gov. Inslee's priority is 'jobs, jobs, jobs'

Mary Alice Heuschel, chief of staff for Gov. Jay Inslee, speaking Thursday at AWB's first Lobby Lunch meeting of 2013. Photo: Dan Brunell/AWB

In case there were any doubts about where Gov. Jay Inslee intends to focus his energy during the next four years, Mary Alice Heuschel sought to erase them Thursday.

"Jobs, jobs, jobs and, by the way, did we say 'jobs?'" Heuschel, the governor's chief of staff, said when she spoke at AWB's inaugural Lobby Lunch meeting of the 2013 Legislative session. "That is the over-arching goal for the next four years."

To achieve the goal, Inslee's administration will bring "fierce focus" to four areas that Heuschel referred to as buckets:

• Education
• Health care
• Economic development
• Efficient, effective and transparent government

Ted Sturdevant, the former Departmentof Ecology director who now serves as Inslee's policy director, accompanied Heuschel at the meeting and elaborated slightly on how Inslee intends to create more jobs.

"What can state government really do to impact the economy in a good way?" Sturdevant asked. It can, he said, influence the education system, and shape the regulatory environment.

Regarding the regulatory environment, a topic of keen interest to most employers, Sturdevant expressed optimism that Inslee's fresh approach might produce some breakthroughs that have eluded officials for years.

Sturdevant, a veteran of state government, said it can feel like problems are insurmountable, and that some regulatory hurdles are simply the cost of doing business.

Ted Sturdevant, policy director for Gov. Inslee. Photo Dan Brunell/AWB

But Inslee's faith in the power of innovation has the potential to change that, he said, and he invited business leaders to work with the new administration to solve problems.

"Obviously, we are not always going to agree about what it means to improve the economic climate or improve the regulatory climate," Sturdevant said.

Business leaders should nevertheless engage in the discussion, he said.

Inslee's selection of Heuschel, the former superintendant of the Renton School District, is evidence of the new governor's desire to bring about change, he added.

"He's hoping that by bringing the right tools and the right leaders, the opportunity for change is real," Sturdevant said.

At barely two weeks into the new administration, neither Heuschel nor Sturdevant offered much in the way of specifics about what to expect. 

Heuschel did tell the audience not to expect a budget proposal from Inslee's office until after the next revenue forecast.

Sturdevant joked that he would be playing the "newbie" card for quite some time.

When asked about the timeline for filling key leadership jobs, Heuschel said Inslee's staff is working hard to make the right choices rather than "meet a deadline of yesterday."

On a personal level, Heuschel said she was surprised when Inslee asked her to be his chief of staff, and that it's been an exciting few weeks adjusting to the "firehose" of information that comes with the new territory.

"It's been quite an adventure," she said. "My definition of success has changed not only daily, but almost hourly." 

Workers' comp reform was a good start, but more work is needed

Kris Tefft, AWB's general counsel and government affairs director for workers' comp, testifies before the Senate Commerce & Labor Commitee Wednesday with Scott Dilley, left, from the Washington State Farm Bureau. Photo: Dan Brunell/AWB

The series of workers' compensation reform bills that lawmakers approved in 2011 brought some badly needed relief to Washington employers by slowing what had been a meteoric rise in industrial insurance rates.

But the 2011 reforms didn't solve all of the problems plaguing the state's workers' comp system.

Unless lawmakers take the next step, employers are facing a $110 million surcharge for each of the next 10 years as the state Department of Labor & Industries attempts to rebuild its depleted reserve fund, Kris Tefft, AWB's general counsel and government affairs director for workers' comp, told the Senate Commerce & Labor Committee on Wednesday.

Department of Labor & Industries officials are doing the best they can to rebuild the fund, Tefft said, but they are constrained in what they can do.

"We need the Legislature's help as employers if we are to avoid paying $110 million per year in higher taxes," he said.

Tefft's testimony came at the end of a hearing on a series of five bills that range from simple tweaks to the system to more substantive changes. They include: 

• Senate Bill 5112 - Allows claims representatives for retro employers and groups to schedule independent medical examinations and vocational rehabilitation assessments, subject to certain condidtions
• Senate Bill 5124 - Streamlines the way time-loss benefits are calculated for injured workers by replacing the current formula, which varies based on the worker's marital status and number of children to a standard two-thirds percent. 
• Senate Bill 5126 - Addresses a recent Supreme Court ruling by reaffirming that the state and self-insured companies can reimburse their benefit costs when a third party outside of the employment relationship causes a workers' injury on the job.
• Senate Bill 5127 - Removes the arbitrary age limitation on structured settlement availability, making it a voluntary benefit option that's open to anyone, not just workers age 55 and older.
• Senate Bill 5128 - Also deals with structured settlements, the bill streamlines the program in keeping with the legislation that passed in 2011 with a strong bipartisan vote.

The lead sponsor of all five bills is Sen. Janea Holmquist Newbry, the Moses Lake Republican who is also serving as chairwoman of the committee as a result of the shift in power from the Democrats to a coalition of 23 Republicans and two Democrats.

What employers need to know about legalized marijuana

A few days after Washington voters said 'yes' to legalized marijuana, the Seattle Police Department drew nationwide attention -- and a few grins -- with the release of "Marijwhatnow? A Guide to Legal Marijuana Use In Seattle." 

The handy guide answered questions for curious and potential pot smokers, but it didn't attempt to address any of the questions facing employers, such as: How does Washington's new law change a company's human resources policy? And what happens if an employee shows up at work high?

Greg Hendershott, a partner at Davis Wright Tremaine, provided some of those answers Wednesday during AWB's seminar, "Decriminalization of Marijuana and the Workplace."

(A webinar on the same topic will be held Jan. 15. Registration is available online.)

The short answer, Hendershott said, is that little has changed in the workplace as a result of the November vote.

Marijuana still is illegal under federal law. Employers can still test workers for drugs, including marijuana. They can still enforce drug-free workplace policies. And there is no duty for employers to accommodate medical marijuana use under Washington or Oregon law, or the federal Americans with Disabilities Act.

"Fundamentally, if you want to say nothing has changed, that's a pretty accurate statement," Hendershott said.

Export market holds huge potential for manufacturers

It isn't easy, and there are a number of pitfalls. 

But the growth potential in export markets is so big that it is vital for manufacturers to do business with the rest of the world.

That was the message that Janet Bauermeister, director and senior trade specialist for the U.S. Department of Commerce, delivered Wednesday during AWB's 2012 Manufacturing Summit in Seattle.

Janet Bauermeister, director and senior trade specialist for the U.S. Department of Commerce.

Bauermeister, who works in the U.S. Commercial Service office in Spokane, made the case for exports by providing some remarkable statistics, such as: 

• The middle class in India is expected to grow 10-fold by 2025. Other hot markets include Brazil, Columbia, Indonesia, Mexico, Morocco, Nigeria, South Africa, Turkey and Vietnam.
• Exports jumped by more than 11 percent in 2010 -- the first year of the recovery. This represented the fastest growth rate since 1997. (Source: Business Insider.)
• In Washington state, exports contributed to nearly half of the state's new jobs over the past 30 years.

Getting into exporting requires a fair amount of work, Bauermeister said. It includes finding the right market, developing the market and going to the market, often by attending trade shows.

"A lot like what you do in the U.S.," Bauermeister said.

The role of Bauermeister's office is to work with Washington businesses to help them identify potential markets and successfully export their products.

It's a good time to be doing that work, Bauermeister said.

Thanks to the National Export Initiative, which is working to reach the Obama administration's goal of doubling U.S. exports in five years, export assistance has received more attention than it typically does.

In fact, it used to be something of an afterthought.

 "Now, export promotion is the focus," she said.

Business owners who would like to explore exporting can find resources on the website export.gov. The U.S. Commercial Service has international trade specialists in 100 U.S. cities and 83 U.S. embassies and consulates throughout the world.

Additional resources can found through the U.S. Small Business Administration, the Export-Import Bank of the United States and the Export Finance Assistance Center of Washington. 

Brunell: What are we doing to our kids?

The short-term consequences are bad enough.

If Congress fails to avert the so-called "fiscal cliff" by the end of the year, 6 million jobs will vanish over the next two years, driving the unemployment rate to nearly 12 percent, AWB President Don Brunell writes in his weekly column.

Some of the changes awaiting midnight Dec. 31 include the end of last year's temporary payroll tax cuts will end, resulting in a 2 percent tax increase for workers, the end of some usiness tax breaks, shifts in the alternative minimum tax will mean higher income taxes, the end of the Bush tax cuts from 2001-2003 and implementation of taxes to pay for Obamacare.

But the long-term consequences of America's debt addiction are even more troubling.

If you paid out one dollar every second, it would take 496,000 years to pay off our $16 trillion national debt, Brunell writes.

Our children and grandchildren will pay the consequences for our generation's irresponsibility

Lieutenant governor candidates spar over spending, ethics

The final debate of the AWB Policy Summit began on a light note, with moderator Peter Callaghan noting the musical ties of incumbent Lt. Gov. Brad Owen, a Democrat, and his Republican challenger, Bill Finkbeiner.

Owen is the frontman in a band that plays in front of school children, while Finkbeiner recently released a music video with Nirvana co-founder Krist Novoselic.

"This is actually not a debate," Callaghan said. "This is Lieutenant Governor 2012: The Musical."

The debate later turned testy, though, when Finkbeiner made an issue of Owen's use of surplus campaign funds to pay for alcohol and lunch for his staff.

It drew an angry response from Owen, who said he bought alcohol to entertain officials guests at his home and he treated his staff to special meals as a reward.

"That's a legitimate use of surplus funds and he knows that," Owen said referring to Finkbeiner. He added, "Bill is making a big deal that some people used (surplus funds) for suits and fixing their car, but I didn't."

Accusations fly during auditor debate

The race for Washington state auditor, which began to heat up last week when candidate James Watkins launched a website chronicling a history of past civil litigation involving his opponent, state Rep. Troy Kelley, reached a full boil Wednesday during a debate at AWB's Policy Summit.

"This race got kind of interesting last week," moderator Peter Callaghan, columnist for The News Tribune, said at the start of the exchange.

With that, Watkins, a Republican, and Kelley, a Democrat, spent the better part of an hour questioning the fitness of their opponent to serve as the state auditor.

Watkins returned frequently to the website his campaign launched -- factchecktroykelley.com -- and allegations he first leveled at Kelley during a taping of the TVW program "Inside Olympia," including tax evasion and misappropriation of funds.

The website has attracted attention from voters, Watkins said. He said a man stopped him over the weekend and asked, "Are you the thief or are you the other guy?"

Does America have a 'quasi-parliamentary' system of government?

Ron Brownstein, one of the speakers at next week's AWB Policy Summit, thinks so.

Crosscut's David Brewster heard Brownstein speak recently in Seattle on the subject of political polarization, and he wrote about it this week.

Brewster lays out Brownstein's "sobering" perspective on the history of bipartisanship in Congress, its post-1988 demise and what it means for the future.

It's not an uplifting read. 

Brownstein believes that a purging of moderates from both major parties plus the end of the seniority system in Congress -- replaced by a system in which the party caucuses elect chairs -- contributed to a drift into a quasi-parliamentary system of government in which members are required to stand with their parties.

The good news is that this type of hyperpartisanship has occurred before in America and the country has broken out of it.

The bad news is that one time it took the Civil War to end it, and the other time Teddy Roosevelt bolted from his party and created a new one.

On a lighter note, Frank Luntz, another speaker at next week's Policy Summit, was quoted yesterday in a Washington Post article that took note of the way both political parties used deeply personal stories during their conventions.

"It humanizes and personalizes the politics, that it's not just about policy, it's also about people" Luntz said. "Whenever policy is put in people terms, that's when it succeeds."

Candidates to face off during Policy Summit

The primary is in the rearview mirror but the general election is rapidly approaching on the horizon. AWB is helping employers get up to speed on the issues and the candidates at its 23rd Annual Policy Summit, featuring three moderated conversations between candidates for lieutenant governor, secretary of state and state auditor.

Incumbent Democrat Brad Owen seems likely to face former Republican Senate Majority Leader Bill Finkbeiner. The lieutenant governor is the president of the Senate, and serves the state as acting governor in the absence of the governor.

Current secretary of state, Sam Reed, is not running for re-election. Thurston County Auditor Kim Wyman, a Republican, will challenge former Democratic Sen. Kathleen Drew. The secretary of state is the chief elections officer, chief corporations officer, and supervisor of the state archives.

Finally, the retiring state auditor Brian Sonntag will leave an opening for one of the two candidates to fill. Republican James Watkins seems likely to run against Rep. Troy Kelley, D-University Place, once the primary ballots have been certified. The state auditor promotes accountability, fiscal integrity and openness in state and local government.   

Media rewind: A round-up of gubernatorial, AG debate coverage

In case you missed the debates Tuesday, there are plenty of ways to catch up on the news.

Approximately three dozen print, television, radio and online reporters converged on the Bing Crosby Theater in Spokane this week to cover the first debates of the 2012 campaign for Washington governor and attorney general.

It was the sixth time since 1992 that AWB has hosted gubernatorial debates -- co-hosted with Greater Spokane Incorporated -- and the first time they were held in the spring.

Here's a look at some of the reports they produced:

• KREM: McKenna, Inslee meet in 1st debate in Spokane
• The Seattle Times: McKenna, Inslee meet in 1st gubernatorial debate in Spokane
• Associated Press: Inslee, McKenna face off in 1st gubernatorial debate
• The Spokesman-Review: Inslee, McKenna square off at Bing
• KXLY: Inslee, McKenna hold first gubernatorial debate in Spokane
• KOMO: McKenna, Inslee meet in Spokane for first debate
• Seattle P-I.com: Inslee vs. McKenna: Big differences revealed in debate
• The Politics Blog (The Olympian): Duh: Inslee backers think he won debate
• Washington State Wire: No Kayo in Round One, But First Inslee-McKenna Debate Offers Plenty of Contrast

Attorney general debate coverage:

• The Seattle Times: Dunn, Ferguson come out slugging in attorney-general debate
• Political Buzz (The News Tribune): Attorney-general candidates take gloves off in debte: Jay Inslee, Rob McKenna up next
• The Up Front Blog (KING 5 News): Spokane Warm-up Act Steals the Show

TVW's The Impact examines both debates:

 

Q13 Fox's C.R. Douglas reports from Spokane:

Governor, AG candidates meet on stage at AWB-GSI debates

Voters had their first chance Tuesday to see Washington's governor and attorney general hopefuls go head to head in a pair of debates sponsored by AWB and Greater Spokane Incorporated.

The first debate, between attorney general candidates Reagan Dunn, a Republican King County Councilman, and Bob Ferguson, a Democrat on the King County Council, was regarded by reporters as a lively contest.

Dunn emphasized his experience as a prosecutor, saying he was the only candidate with experience prosecuting criminals. Ferguson said Dunn frequently missed votes on the King County Council.

In the second debate of the day, Inslee and McKenna answered questions on everything from education and transportation to taxes and jobs.

The candidates agreed that more money should be spent on education, and they agreed that taxes shouldn't be raised to fund the increased spending.

But they disagreed on many other issues, including the federal health care law and whether the Legislature should need a two-thirds supermajority to raise taxes.

2012 gubernatorial, attorney general debates today in Spokane

Thanks to a lot of hard work from our partners at TVW, KREM television in Spokane and the Bing Crosby Theater, the venue is prepped and ready for Tuesday's attorney general and gubernatorial debates.

The attorney general debate between King County Councilmen Reagan Dunn and Bob Ferguson gets underway at 2 p.m.

The gubernatorial debate featuring former U.S. Rep. Jay Inslee and state Attorney General Rob McKenna begins at 3:30 p.m.

Both will air live on TVW, KREM and stream on TVW and KREM's websites.

Debate Moderator Austin Jenkins preparing for the attorney general and gubernatorial debates.

Debate media partners KREM2 and TVW preparing to broadcast the debate live.

 

 

 

There really isn't a bad seat in the Bing Crosby Theater.

 

 

 

AWB and Washington gubernatorial debates are a quadrennial tradition

With the first debates of the 2012 campaign season just about to kick off Tuesday at the Bing Crosby Theater in Spokane, we thought it timely to reflect on AWB's involvement in these events.

The Association of Washington Business sponsored its first gubernatorial debate in 1992. It was held at Semi-ah-moo Resort near Blaine and featured Republican state Attorney General Ken Eikenberry and Democrat Mike Lowry.

It was the first debate between the candidates and a news report said it highlighted their differences on health care, growth and the environment, schools and taxes.

Twenty years since the Eikenberry-Lowry contest, the AWB debate -- co-hosted this year with Greater Spokane, Inc. -- has become a tradition.

Here's a look back at the debates through the years:

1992: In the fall of 1992, Washington state was facing a $1 billion shortfall, The Seattle Times reported. Lowry said higher taxes might be necessary, while Eikenberry took a no-new-taxes pledge and spoke of reinventing government.

Consumer confidence falls amid concerns about jobs

According to Bloomberg, consumer confidence fell to a four-month low in May amid concerns about few jobs for the remainder of this year. Consumer confidence drives economic recovery creating jobs along the way.

The share of Americans expecting fewer job opportunities in the next six months climbed to the highest level since November, raising the risk that consumers will limit spending--not a good pattern.

Even a 30-cent decline in gasoline prices, in all places except the West Coast since early April failed to brighten spirits, showing that more progress is needed in the job market.

The Conference Board’s index decreased to 64.9 this month from a revised 68.7 in April, figures from the New York-based private research group showed today. Home prices in 20 cities dropped in the 12 months ended in March at the slowest pace in more than a year, according to another report.

 Bloomberg reports home prices in 20 U.S. cities fell 2.6 percent in the 12 months ended in March.  It is the smallest decrease since December 2010, according to an S&P/Case-Shiller index of property values.  Homebuilders are reporting their most-improved spring selling season in seven years, propelled in part by record-low mortgage rates.

Now if we can just get people back to work. 

Brunell: Italy's anti-competitive policies lead to economic ruin

After years of ever-increasing employee benefits, lifetime job security and little or no competition, Italy's economy is in serious trouble, AWB President Don Brunell writes in his weekly column.

If it collapses, it will trigger an economic crisis that will reverberate throughout Europe and the global economy, dwarfing the problems facing nearby - but much smaller - Greece.

Blame for the crisis rests on a complicated system called "la casta" that's designed to insulate the country from the demands and stresses of a free-market economy. It adds so much cost and bureaucracy to society that it's nearly impossible to fire anyone or start a new business.

Prime Minister Mario Monti's government is attempting to institute economic reforms, but its running into opposition. The hospital pharmacist guild, for example, is threatening to cut off the nation's supply of Viagra if Monti goes ahead with his plan to open 5,000 new pharmacies.

It's a cautionary tale for those who seek to replace our free-market system with government controls and protectionism.

"We don't need to speculate on where that road leads," Brunell writes. "We know."

Brunell: Export-Import Bank fuels trade and job growth

The Export-Import Bank of the United States isn't well known outside of the nation's capital, but it's an important part of the economy, AWB President Don Brunell writes in his weekly column.

What began with one loan to Cuba in 1935 for the purchase of U.S. silver ingots has grown into a substantial source of government-backed financing that supports export sales for thousands of U.S. manufacturers, including Boeing.

It operates at no cost to the taxpayer and in fact is returning money to the U.S. Treasury.

Unless Congress reauthorizes the bank soon, though, it will run out of funding ability, derailing pending sales of U.S. manufactured products and harming companies big and small.

President Obama has called for a doubling of U.S. exports by 2014 and recently asked Congress to reauthorize the bank and raise its lending cap, Brunell writes.

It makes sense for the nation, and especially for trade-dependant Washington state.

Brunell: Rising gas prices threaten our economic recovery

Just as the economy is starting to move again, rising gas prices threaten to put on the brakes, AWB President Don Brunell writes in his weekly column.

AAA is reporting gasoline prices are at the highest point ever for this time of year and experts are predicting $4.25 per gallon by late April.

The rising gas prices lead to higher costs for virtually everything we buy because just about everything that's produced uses refined petroleum somewhere along its journey to market.

The spike is due to a host of factors, including the seasonal shut down of refineries so they can switch from their winter fuel blends to the more costly summer blends mandated by EPA.

In addition, several refineries have closed, the recent fire at BP's Cherry Point refinery further reduces supply, and Iran has cut off oil supplies to England and France.

There is no quick fix to any of these problems, but there are things that America can do to reduce the chance that this happens again.

Perhaps the most important thing, Brunell writes, is for political leaders from President Obama on down to understand the link between a stable energy supply and a strong economy.

Signs of life in 2012 governor's race

Although the 2012 November elections seem as distant as clear skies and 70 degree temperatures, there has been a fair amount of state political news of late. In particular, the race for governor. 

Last Monday, Democratic gubernatorial candidate Jay Inslee released his economic plan at events in Seattle and Spokane. According to Inslee, it's the first of several policy announcements to come from the campaign. Education is reportedly the next issue he will address in a second briefing plan.

In an interview with KING 5's Robert Mak Sunday, Inslee touted the plan's focus on key industries like life sciences, green energy, agriculture and aerospace. The plan also touts tax relief for small businesses, offering a B&O tax credit for small businesses that hire new employees and B&O relief for start-ups in biotech, clean energy and information technology.Inslee would also offer tax credits for investments in aerospace manufacturing and research. Alhtough Inslee's plan does not offer specifics on the price of these proposals, he told Mak:

"In the long run their cost is zero. In the short run, we're going to target them and make sure they're not any larger than the state budget can handle."

Watch the full interview by Mak with Inslee here:

Over at MyNorthwest.com, reporter Linda "The News Chick" Thomas recently interviewed both candidates (read/listen to the Inslee profile here and today's conversation wtih Republican Attorney General Rob McKenna here). Both conversations provide insight into what has motivated them personally and glimpses what they each hope to accomplish as governor.

Then today, pollster Stuart Elway released the findings from his latest poll on the race, which finds McKenna with a nine-point lead over Inslee (margin of error is plus/minus five). The poll of 405 registered voters found 45 percent of respondents would "definitely" or "probably" vote for McKenna, compared with 36 percent for Inslee.

For us at AWB, it's all part of the run up to what will be the first formal debate between the two candidates for governor on June 12 at the Bing Crosby Theater in Spokane.

AWB has a long history of hosting a debate for the state's top office holder, dating back to 1992 between candidates Mike Lowry (D) and Ken Eikenberry (R).

The debate will give AWB members and supporters from both campaigns an opportunity to hear in person the positions and perspectives of both candidates before a live audience. This year, Northwest News Network correspondent and TVW host Austin Jenkins will serve as moderator for what should be a lively debate about the future of Washington state. 

President's State of Union speech didn't address economic growth to create jobs or excessive regulations costing jobs

The fallout from Tuesday's State of the Union address continues. Tom Dononhue, president of the U.S. Chamber of Commerce, told the Fox Business channel it was a political speech "full of taxes and taxes, regulations and regulations, stimulus and stimulus. It doesn't address the two fundamental questions at hand and that is how do we drive growth into the United States to the extent that, number two, it creates jobs?"

"I heard a lot about how we were going to regulate things, how we were going to constrain things, how we were going to tax issues. But I didn't hear anybody say 'and here's what we're going to do to move forward, to liberate the free enterprise system in this country to put people back to work.' It was all about what government was going to do and what the president was going to do with the arm of government to see what he could do to put people back to work. But that's not gonna help," Donohue concluded.

Jay Timmons, president of the National Association of Manufacturers, responded: "The President deserves credit for highlighting manufacturing on a national stage, but presidential leadership requires more than speeches. President Obama had a chance to set a bold manufacturing agenda in motion, and he missed it."

"On regulations, for example, the President touted his Administration’s efforts to rein in some regulatory excesses and costs—$10 billion in savings over the next five years. But, Boiler MACT, Utility MACT, Cement MACT and the Cross-State Air Pollution Rule, to name just a few of this Administration’s rules, would impose costs that dwarf the savings highlighted by the President.

"And on labor, the President never mentioned the aggressive actions that the National Labor Relations Board took in the past year. If President Obama wants manufacturing to lead the economy, federal agencies cannot swoop in and tell manufacturers where they can do business."

Timmons concluded: "It’s 20 percent more expensive to manufacture in the United States than it is among our major trading partners — even after excluding the cost of labor. The best way to create an environment to increase manufacturing employment in America is to lower the cost of doing business through pro-growth tax rates, sensible legal policy, reasonable regulations and affordable and secure energy supplies."

The Association of Washington Business is Washington's state chamber of commerce and manufacturing and technology association as recognized by the U.S. Chamber of Commerce and National Association of Manufacturers, respectively.

Gregoire's staff lays out governor's final session agenda

Snow and ice did not deter the governor -- or rather, the governor's fiscal and policy leaders -- from kicking off AWB's 2012 Lobby Lunch series last week. 

Joining AWB members for lunch in Olympia last Thursday were Gov. Chris Gregoire's budget director, Marty Brown, and her legislative director, Jim Justin.

Brown, a longtime fixture in Olympia politics, did not mince words about the gravity of the challenge before lawmakers this session. While Brown believes the next revenue forecast will likely not be significantly different, caseload numbers are likely to shuffle the internal workings of putting together the supplemental budget. (State caseload figures are due out Feb. 10; the revenue forecast follows on Feb. 16.)

"This is tough. There is not an easy path to get this stuff done," said Brown. "There's a lot of uncertainty -- not so much in Washington state but...in the world economy. And our economy is not necessarily dependent on those things, but the consumer confidence that occurs with changes in Europe, activities of Congress, really is a key to our recovery."

Businesses are not back to full speed yet, Brown said, and any economic gains made through private sector hires are being offset by cuts in state and local governments.

"I don't see a real turn around, I don't see a real quick decision-making process here," Brown said, "but I also don't think [lawmakers] are going to stay long, either."

Given the legislative landscape, Justin characterized Gregoire's final policy agenda as a "fairly aggressive, broad" list of proposals for a 60-day session, offering thumbnail sketches of the governor's priority legislationn. The package includes 17 bills, though three of the six aerospace bills, Justin noted, were passed during the December 2011 special session.

Brunell: Buying American products creates American jobs

With continued high unemployment, growing deficits and a sluggish economy, it's easy to think that a solution is out of reach.

But that's not the case, AWB President Don Brunell writes in his weekly column. By choosing to "Buy American," individual consumers can make a real difference.

Buying American is not anti-trade, but rather about consumer choice, Brunell says. He notes the case of Anders Lewendal, a Bozeman, Mont. contractor profiled by ABC News for building a home using only American-made materials.

Lewendal says that using just 5 percent more American products in construction projects would create 220,000 jobs. And yet the cost of his "all American" home was just 1 percent higher than homes built with materials manufactured offshore.

Former Cheers actor John Ratzenberger has become the face of the Buy American movement, and he's sounding the alarm about the shortage of skilled American laborers and craft workers that results from buying products from overseas.

It's not too late to turn things around. The Buy American movement shows that opportunities abound, Brunell writes. Even in the most dire situations.

Gregoire asks business for help with tax simplification, education reform

Gov. Chris Gregoire called on the business community Tuesday to help pass her final legislative agenda, which includes an element designed to help small businesses: tax simplification.

Gregoire flatly disputed claims from the state's largest cities that they will lose millions of dollars in revenue if the state takes over collection of business and occupation taxes, comparing her proposal to the sales tax.

The state currently collects sales taxes and apportions money to local governments.

"These horror stories of how they're losing money? No they're not," Gregoire said. "We will give it back," she said, adding "I think it's the right thing to do for the small businesses of the state of Washington."

Gregoire also asked business leaders to support her proposed half-cent sales tax hike and to help persuade lawmakers to pass her education reform agenda, which she called a prerequisite for raising taxes. And she highlighted one way that her administration trying to lessen the regulatory burden imposed on business.

Sen. Kastama makes the case for a sustainable budget

Cutting programs and raising taxes might solve the state's immediate budget crisis, but it won't do anything to address the long-term problem.

Namely, expenses are rising faster than income.

Sen. Jim Kastama, D-Puyallup, explains the situation and -- and offers some solutions -- in a video to constituents. It's one of the best explanations we've seen for the state's seemingly never-ending budget woes.

He proposes eliminating some programs that have yet to be funded, addressing health care costs and making government more efficient. Whether or not you like those ideas, he makes a compelling case for doing something different.

"Even if we pass more taxes or make the cuts this year, the long-term projection in the state budget basically has to be dealt with, or else we will be in deficits every single year for the next five years," Kastama said.

Brunell: Thank goodness for farmers

With the holiday season nearly upon us, AWB President Don Brunell gives thanks to America's food producers, a group that leads one of the few bright spots in a persistently glum economy.

America's agricultural exports reached a record $127 billion this year and they are expected to grow another $2.3 billion in 2012, Brunell writes.

The sector got another shot in the arm last month, too, when Congress ratified new free trade agreements with South Korea, Columbia and Panama. Tariffs and trade barriers will fall as a result, and Washington state stands to be one of the biggest beneficiaries.

The trade agreement immediately wipes out a 24 percent tariff South Korea imposed on Washington cherries, reducing prices by 75 cents per pound.

It also phases out South Korea's 45 percent tariff on most apple varieties over the next 10 years and immediately eliminates that nation's 18 percent tariff on frozen potatoes.

"So while our nation and state struggle with record budget shortfalls and a skyrocketing federal deficit, it is good to start this year's holiday season with some good news," Brunell writes.

 

AWB Health Care Forum underway

James Capretta, a fellow with the Ethics and Public Policy Center, kicked off AWB's forum on health care reform today with an overview that described the numerous questions that remain unanswered about how federal health care reform will actually work, and how the government will pay for it.

Most people won't notice any impact as a result of the law until 2014, and the long delay between its passage and implementation carries important political and substantive implications, Capretta said.

Already, the Obama administration has pulled the plug on a long-term care provision of the law known as as the CLASS Act that was supposed to save $70 billion, he said.

Other elements that were supposed to help pay for the law are failing to meet expectations or are under threat, including planned taxes on medical devices and rich benefit plans known as "Cadillac" plans.

Medical device manufacturers are fighting the planned tax on their products, and labor unions want to repeal the Cadillac tax, which isn't scheduled to take effect until 2018.

McKenna, fresh from campaign kickoff, shares his 'New Direction' with AWB

On Tuesday, Rob McKenna reportedly served up "some familiar Association of Washington Business-style bromides" regarding government regulation.

That's how the Seattle P-I.com described part of the attorney general's breakfast speech kicking off his 2012 gubernatorial campaign, anyway.

On Wednesday, McKenna stopped by AWB's office in Olympia for a lunchtime visit with some of the state's business leaders, and he took aim at the remark.

"I just have to point out that people who write things like that have never been in a position to deal with the regulations that we're talking about here, as all of you have, as I have been as private legal counsel to small businesses and large companies," McKenna said. "This is not an abstract or hypothetical or idealogical issue. It is real and it has to be addressed in a real fashion."

McKenna makes it clear how he would address the problem in one of three white papers that lay the foundation for his campaign. The first of the papers, A New Direction for Job Creation in Washington State, offers a detailed list of proposals aimed at reducing unemployment.

They include an examination of regulatory policy, as well as competitive tax reform, ending the state monopoly on workers' compensation and liability reform.

But just as he did Tueday in his kick-off speech, McKenna spent much of his time Wednesday talking about education issues.

Brunell: Deadbeat Illinois serves as a warning

The budget crisis is so bad in Illinois that the state has simply stopped paying its bills, AWB President Don Brunell writes in his weekly column. And this is after lawmakers pushed through huge tax increases.

Why should we care what happens in Illinois? Because it's a warning to us all.

Illinois is by no means alone in its fiscal crisis. The recession revealed systemic weaknesses in cities and states across the nation -- weaknesses that were masked initially by a strong economy and later by federal stimulus money.

Still, the borrowing and spending continues. And it's largely our fault. "We all want cuts, but not to our program," Brunell writes. "We call for fiscal restraint from our elected leaders but howl when our ox gets gored."

The solution, he writes, is to once again audit tax incentives and eliminate the ones that aren't paying for themselves, attracting new investments or creating or preserving jobs. Next, lawmakers need to jettison non-essential services or turn them over to the private sector.

And most importantly, lawmakers must streamline Washington's costly, complex and overlapping regulations.

"Simply put," Brunell writes, "the cost of permits is out of whack in Washington state and it is killing employers in the private sector, non-profit groups -- even other essential services like first responders, hospitals and schools."

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.

 

Brunell: Will America still aspire to space greatness?

Given the country's $14 trillion budget deficit, coming up with the $18 billion needed to launch a test flight of NASA's new space launch system could be a challenge, AWB President Don Brunell writes in his weekly column.

And that's just the beginning. The total price tag for the rocket program that would eventually carry U.S. astronauts to Mars is currently estimated at $35 billion, and it could cost more than $60 billion for an accelerated program.

Why spend the money?

For starters, the U.S. space program has solidified America's leadership role in the world, fostered incredible advances in science and technology, produced thousands of innovations and products we use in our daily lives, and inspired millions of American youth to pursue careers in science and math, Brunell writes.

In addition, we have a clear lead in space. So as other nations emphasize innovation as they attempt to attract research and development, America already has the space technology and R&D here.

Finally, reaching beyond our planet to the stars has long been part of our greatness as a nation.

Our struggles with debt and China's ambitious space agenda are prompting Brunell to wonder, "Do we as a nation still aspire to greatness in space and beyond?"

Brunell: The reality of world competition for America's factory owners

The story of FormFactor, a one-time California company that moved to Singapore in order to survive, illustrates the challenges facing businesses in today's cut-throat global competition.

The company founder didn't want to move his operation out of America, where he made his fortune, but he found himself competing with a Korean company that copied his device and started making it cheaper, AWB President Don Brunell writes in his weekly column.

When Singapore's Economic Development Board offered tax holidays, free property for a plant and headquarters and substantial grants for equipment and materials, he had little choice but to accept the deal.

His company was rapidly headed toward extinction and U.S. officials brushed him off his request for assistance.

As U.S. officials look for ways to restore jobs, they need to consider the reality of today's global economy, Brunell writes. And they need to make decisions carefully, based on economics not politics.

 

Rasmussen: America is in the midst of major change

Americans are deeply frustrated with their government and they're driving the country slowly but surely toward fundamental change.

That was the message Scott Rasmussen, founder and president of Rasmussen Reports, delivered Wednesday during AWB's annual Policy Summit.

It's unclear where things will end up. And it's unsettling, Rasmussen admitted. But he believes it's also a healthy part of American democracy.

Rasmussen, who is one of the nation's leading pollsters, has earned a reputation as someone who knows where the country is heading because he gauges the mood of average Americans rather than the so-called political class.

Americans today are frustrated with the economy and no longer view the downturn as a normal business cycle, he said. Rather they see it as a sign that something has gone fundamentally wrong.

In fact, they distrust the whole economic and political system to the extent that his polling shows most Americans not only think Congress is corrupt, but their own congressman or congresswoman is corrupt, he said.

Gregoire: Now more than ever, we must work together

Gov. Chris Gregoire blasted Congress for "failing to do what needed to be done in August," and she called on Washingtonians to work together to solve the state's budget problems during her luncheon address Wednesday to AWB members.

"Now more than ever, we can only get through the challenges ahead if we work together," Gregoire said during AWB's annual Policy Summit.

Her comments came after last week's news that state revenue projection dropped another $1.4 billion, raising the estimated budget shortfall to nearly $2 billion.

The forecast brought immediate talk of a possible special session of the Legislature, but Gregoire said she doesn't intend to call lawmakers to Olympia before the next forecast in November. Later in the afternoon came confirmation that Gregoire will call lawmakers back to Olympia in November for a 30-day special session.

"It's not a small, supplemental budget where you tinker, it is a new budget," she said.

Rosensweig: Exports will be economy's locomotive

There is about a one-third chance that the economy will enter a "double dip" recession, so business leaders should prepare for that possibility, Jeffrey Rosensweig told AWB members Wednesday at the start of the 22nd annual Policy Summit.

But Rosensweig, director of the Global Perspectives Program at Emory University in Atlanta, said economists believe it's more likely that it will grow at about a 2 percent or 2.5 percent annual rate.

And he added that all of the grim economic news misses some fundamental strengths going forward, including America's growing population and predictions that the nation's debt-to-GDP ratio will stabilize or decline in the next few years.

Rosensweig noted that America's population is growing about 2.5 million per year and it's the only wealthy country in the world with a growing population. That makes it harder to lower the unemployment rate. Even if the economy grows 2 percent per year, it's just absorbing new workers -- and not bringing the unemployment rate down.

State revenue outlook nosedives again - down $1.4 billion

Washington's state budget picture took another turn for the worse Thursday when chief economist Arun Raha announced a new revenue projection $1.4 billion lower than the previous forecast.

The bad news, which comes despite strong aerospace, software and agriculture sectors, had been telegraphed well in advance. But that doesn't mean it will be any easier for lawmakers to address, either later this year in a special session or in January when they are scheduled to convene.

A special session seems likely. Marty Brown, the governor's budget director, said Gov. Chris Gregoire held conference calls with legislative leaders, adding that she was "very uncomfortable" waiting until January.

Whenever they meet, AWB President Don Brunell said lawmakers must put aside partisan differences and concentrate on actions that will spur small- and medium-sized employers to start hiring again.

Despite strong employment growth at Boeing, which has more than seven years of commercial orders on its books, and a rebound in software publishing employment, Thursday's report showed that Washington's job market added just 8,300 jobs in June, rather than 13,600 that had been forecast.

Nationwide, there are still more than 6 million fewer jobs than at the start of the Great Recession, Raha said.

Brunell: Boeing's prospects are bright ... for now

Amid all the bad economic news of late, Boeing has supplied some welcome good news, AWB President Don Brunell writes in his weekly column.

The company has completed flights tests of its long-delayed 787 Dreamliner, and despite the delays the 787 remains in strong demand. Boeing Commercial Airplanes Chief Jim Albaugh says there are 830 orders for the 787 from 52 customers, and the plane is sold out through 2019.

Boeing is adding workers and Arun Raha, the state's chief economist, expects hiring to continue for the next couple of years.

So, thing are looking up -- but all that could change, Brunell says.

He cites the National Labor Relations Board claims against Boeing over its decision to build a second production line right-to-work South Carolina, and competition from manufacturers in China, Brazil and Canada -- in addition to rival Airbus -- as notable challenges facing Boeing.

"To survive in this aggressive global marketplace, Boeing needs certainty and stability at home, with its workforce and with government regulators," Brunell writes. "Without it, Boeing's future prospects are uncertain."

 

Welcome, Business, to Poland

This is Week 2 of Year 3 of Washington Business Week in Poland.  I am fortunate to be in Gdansk this week as one of 10 company adviser to 100 Polish high school students who all speak English. Included in the 10 Americans are two teachers--one from Monroe and the other from Vancouver (WA).

Last week, Poland Business Week was in Gdynia, where it started in 2009 thanks to a sister city relationship between Seattle and Gdynia.  This year it is in Gdnyia, Gdansk and Tczew---all in northeastern Poland bordering the Baltic. Next year, it may spread deeper into Poland, which until the Berlin Wall fell, was ruled by the iron-hand of communist dictators.

Poland Business Week is the same Washington Business Week started at the Association of Washington Business in 1975 and has spread to 26 states, Australia and now Poland.  AWB remains the founding sponsor and hundreds of AWB members help fund WBW.

The Polish government and business community hosts and welcomes Americans and embraces Washington Business Week as a way for its country to develop young entrepreneurs.  They believe their future is in free enterprise and our market-based system.

You see it everywhere, and unlike many places in America, construction is happening here....and they want more.   As you fly into the Gdansk/Gdynia airport, the first thing you see is a new terminal being completed.  Once in the terminal building the one thing you can't miss is the big sign:  "Gdynia, here one does business."  They want American private investment---as evidence that the sign is in English, not Polish.

More on Gdansk/Gdynia and Polish Business Week as the week progresses. 

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

 

 

 

 

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?'"

 

Brunell: Taxpayers should cut up Uncle Sam's credit cards

Candidates for political office generally have to pay vendors up front for campaign material. No cash, no campaign ad.

It's too bad the same principle doesn't apply once they're elected, AWB President Don Brunell writes in his weekly column.

Once they're in Congress or the Oval Office, the allure of Uncle Sam's credit card -- and the pressure to "bring home the bacon" to constituents -- leads to a debt binge.

National debt isn't new, Brunell notes. But what is new is that we're not repaying our public debts; we're simply getting new credit cards to pay off the old ones.

Elected officials will have no choice but to drastically cut spending even if they do raise taxes. With an election looming next year, that's likely to result in the least productive Congress since President Truman's "do-nothing Congress" of 1948.

Living with a balanced budget means making tought choices, Brunell writes. But it's better in the long run because U.S. citizens -- and their children and grandchildren -- won't be saddled with a mountain of crushing debt.

Raha: Don't panic, economy will improve by year's end

When you see bad news from the second quarter economic reports, don't panic, Arun Raha, Washington's chief economist, told AWB members this morning.

Things will improve by the third quarter and especially by the fourth quarter of the  year, he said. That is provided there isn't another high-impact, low-probability shock to the system along the lines of this spring's Middle East unrest and the earthquake, tsunami and nuclear crisis in Japan.

"Right now, we're still recovering but at a slowing pace," he said.

Some positive signs:

• For the second month in a row, home prices rose in Seattle. (Raha quipped that he doesn't care about home prices in Seattle, just New York -- where he still has a house for sale.)
• Auto sales, which were recovering before the supply chain interruption in Japan led to a drop, should bounce back when the supply recovers. Americans are driving older cars on average than they have in years, and there is growing pent-up demand. "We are driving around in old cars," Raha said. "That, historically, has always corrected itself as us going out and buying new cars."
• Employment is poised to pick up as labor productivity growth begins to decline. "We've squeezed everything we can out of our existing workforce," Raha said.

Even though the economy is at a point where it ready to break free, it's being held back by weak consumer confidence. "Demand has come back really slowly," Raha said.

Governor signs workers' comp reform bill - will rates go down?

That's the question the Associated Press leads off with this morning, noting Governor Gregoire's signing Wednesday of HB 2123, the second of two major workers' compensation reform bills passed during the 2011 legislative sessions. 

Taken together, SB 5801, which establishes a statewide medical provider network for the treatment of injured workers, and HB 2123, which trims costs and improves several long term disability structures within the system, are projected to lower the state's workers' comp costs by $519 million in 2012, and just over $1.1 billion between 2012-2015.  The Department of Labor & Industries hailed the bill signing as "historic" on the agency website. 

Washington employers, stung by a disturbing trend of annual high rate increases the last few years, are eagerly anticipating the rate relief this new legislation promises.  I am quoted in the AP piece saying we hope the implementation of these reforms leads to years of more stable workers' comp rates for employers and the workers who pay into the system. 

It's not that rates will go down or won't necessarily go up in 2012 -- the Department of Labor & Industries hasn't embarked on the rate-setting process yet -- it's just that if rates increase, it should be much more mild than the high double-digit increases that were assured had the Legislature done nothing this year.

L&I Director Judy Schurke put it very succinctly in this comprehensive interview with TVW's Austin Jenkins shortly after the legislation passed, speaking specifically to savings from the controversial "claim resolution structured settlements" component employers backed in HB 2123:

"I think we would have in perpetuity had double digit rate increases without this change."

This graphic shared Monday with members of the state Workers' Compensation Advisory Committee shows L&I's timeline and various inputs for adopting the 2012 rates.  The agency expects to propose the rate on September 20 and adopt the final rate after public hearings on November 30.

For more information on the 2011 workers' comp reforms, take a look at this short powerpoint presentation.

Brunell: Jobs for college grads growing at a snail's pace

The nation's ongoing struggle with high unemployment is hitting recent college graduates particularly hard, AWB President Don Brunell writes in his weekly column.

He notes a recent New York Times report that just over 55 percent of 2009 graduates younger than 25 are working in a field requiring a college degree, and nearly a quarter of them are not working at all.

At the same time, there is evidence that America's unemployment rate may not be cyclical, but rather a sign of a new "structural joblessness," Brunell writes. In other words, the number of people unemployed indefinitely is up irrespective of economic times.

One answer to the problem is for government to unshackle the private sector and let it create new jobs. Brunell quotes Martin Regalia, the chief economist for the the U.S. Chamber of Commerce, who says that new government regulations and mandates are stifling job growth.

 "Regalia is correct," Brunell writes. "Unless America empowers the private sector to invest and create new products and jobs, our nation will continue to deal with an anemic job market."

Supreme Court: No Job Protection for Medical Marijuana Patient

Yesterday, the Washington Supreme Court issued a long-awaited decision in a case asking whether an employee may be fired for medical marijuana use under the state law authorizing qualifying patients to use the drug.

Employee Jane Roe, suing under a psuedonynm, was fired from Teletech, a Colorado-based call-center company with a location in Bremerton, after failing a drug test.  She failed the test because she used medical marijuana with a doctor's referral under the state's Medical Use of Marijuana Act (MUMA), passed by the voters in 1998.  

After her termination, Roe sued, claiming MUMA implicitly protects an employee's off-site use of medical marijuana, and that her termination was a wrongful discharge in violation of public policy supporting medical marijuana use.  Roe's suit was strongly supported by the American Civil Liberties Union.  Teletech was represented by AWB board member Stoel Rives LLP.

In an 8-1 decision written by the newest member of the court, Justice Charles Wiggins, the Supreme Court flatly rejected both contentions.  Analyzing the statute, the court reasoned that while it allows a defense against criminal prosecution for marijuana possession, nothing in the plain language or obvious intent of the law suggests employers would face legal liability for refusing to accommodate marijuana use by employees.

Brunell: Dams are the Northwest flood busters

If not for the extensive series of dams along the Columbia and Snake rivers, the Northwest would be experiencing the same massive flooding that's occurring along the Mississippi River, AWB President Don Brunell writes in his weekly column.

The historic flooding could end up resulting in the highest flooding since since the $16 billion claims following Hurricane Katrina, Brunell writes.

In 1948, before the dams along the Columbia and Snake were completed, a levee broke on the flood-swollen Columbia, killing 16 people and wiping away the city of Vanport in what is now North Portland.

"Those who want to remove the dams from the lower Columbia and Snake rivers don't talk about how those dams prevent widespread devastation," he writes. "But we should all remember that without those flood busters, we'd be in a world of hurt."

Brunell: Rising price of gas no mystery

As the price of gas passes $4 on its way to $5 a gallon, the finger-pointing in Washington, D.C., has reached a frenzy, AWB President Don Brunell writes in his weekly column.

As if on cue, the Obama administration has launched another investigation into charges that speculators are manipulating prices.

But the reason for the recent spike in prices is obvious: It's a simple case of supply and demand.

The principle driver of gas prices is the price of crude oil, Brunell writes. "When the price of crude oil jumped from $68 a barrel last year to $115 this year, gasoline prices spiked accordingly."

And why is the price of crude oil rising?

"The unrest in Libya and Egypt, coupled with strikes by oil workers in Yemen, Oman, Gabon and Ivory Coast, has cut production. Less supply means higher prices."

The United States has enough oil reserves to power the nation for 300 years without OPEC, but much of the nation's untapped reserves are located in places hat have been put off limits by the government or are too costly to develop.

"Suffering at the hands of of foreign oil suppliers while we're sitting on 300 years worth of untapped oil reserves is like a family starving with a basement full of food," Brunell writes.

Layoffs, then closure for iconic Tacoma food processor

After 93 years, a Tacoma food processing company is closing its doors. 

Pinnacle Foods Group LLC announced this week it will stop production of the Nalley's South Tacoma facility by June 25. According to published reports, 139 of the plant's 160 workers will be laid off. Production is being transferred to a Pinnacle-owned Armour Canned Meats plant in Fort Madison, Iowa.

While several factors may have contributed to the plant's closure -- including a decision to move production closer to the source of their famous chili ingredients -- certainly last year's move by the Legislature to nix a tax exemption didn't help matters.

Years ago, the Legislature approved a B&O tax exemption for processors of perishable meats, including Nalley's. The exemption was challenged and brought before the state Supreme Court in 2005, and again Nalley's -- and about 125 other companies -- retained its standing under the exemption.

Last year, the cash-strapped Legislature rescinded the exemption in an effort to collect more revenue. (In this case, about $18.8 million over five years.) That, in turn, raised the tax rates for some of the exempted companies, including Pinnacle. 

Was it the only factor in Pinnacle's decision to close the Tacoma Nalley's? No.

Was it another consideration for a company operating in an already difficult economy? Research on competitiveness would say yes: When you take away those exemptions, you increase taxes, which means less money for re-investment, expansion and jobs. In the case of Nalley's and most every other business, that's a big consideration for many employers barely keeping the doors open these days. 

For a company already on the edge, losing a tax exemption may be the final straw.

Nalley's should serve as reminder to lawmakers that attempts to raise revenue by closing exemptions could have the unintended consequence of reducing jobs -- and lowering state revenue.