Olympia Business Watch

Welcome to the first day of session, Hewitt says, on Day 25

Now that the state Senate has voted to legalize same-sex marriage, maybe lawmakers will turn their attention to balancing the budget.

That's clearly the hope of Sen. Mike Hewitt, R-Walla Walla, who began his remarks Thursday at AWB's  Lobby Lunch meeting by welcoming everyone "to the first day of session!"

In fact, lawmakers are now four weeks into the session -- seven weeks if you count last year's second special session -- and there has been "very little movement on the budget whatsoever," Hewitt said.

Other issues, he said, have "totally taken time away from what we need to do in a short, 60-day session."

The lunch meeting not only followed the Senate vote on same-sex marriage, but it also coincided with the release of the House Republican caucus's education budget.

Rep. Richard DeBolt, who joined Hewitt and Rep. Joel Kretz, R-Wauconda, at the meeting, said that after years of proposing a separate, stand-alone education budget and getting nowhere, he's pleased to see it finally get a hearing in committee.

Washington manufacturers share concerns about workforce, power rates

Last year, staff from AWB and its nonprofit affiliate, the AWB Institute, toured the state, meeting in focus groups with representatives from dozens of manufacturing companies.

It was the first tour of its kind and it led to a new report, Challenges & Opportunities for Manufacturers in Washington State, and a first-ever manufacturing industry policy agenda, as well.

"We wanted to get first-hand knowledge directly from our manufacturers about what's working and where there are opportunities to help," said Amy Johnson, a consultant for the AWB Institute.

The meetings took place between August and October and included representatives from 70 small, medium and large manufacturers in Everett, Mount Vernon, Moses Lake, Pasco, Spokane and Vancouver.

Among the findings outlined in the report:

• Power rates must remain competitive. Manufacturers are concerned about rising electricity rates as a result of the Initiative 937 renewable energy law, and say that changes are required in order to remain competitive with other states.
• State and federal regulatory issues must be addressed. While regulations and oversight are necessary, manufacturers report that Washington's current regulatory environment makes it difficult to expand or locate here.
• Jobs are going unfilled due to a shortage of skilled workers. The training system has failed to keep up with today's increasingly high tech and automated manufacturing industry. Also, younger workers lack a work ethic.
• Tax incentives play a vital role in the growth of Washington's manufacturing sector and must be protected.

Brunell: What a relief - power's back on

We flip a switch and the lights come on. Normally, we don't give it a second thought.

Until the power goes out.

In his weekly column, AWB President Don Brunell writes about the hard work and coordination needed to restore power after a triple-whammy snow storm, ice storm and wind storm hit western Washington earlier this month.

More than 280,000 Puget Sound Energy customers lost power and repair crews were in the field around the clock for five days, Brunell writes.

Still, it wasn't as bad as the 2006 windstorm that knocked out power to 1.5 million customers, almost half of them served by PSE.

The utility learned from that storm and will undoubtedly study its response to this one.

"While the final analysis of the 2012 storm will be months in coming, PSE and other affected utilities responded well," Brunell writes. "It's a relief to have the power back on -- and to know we have dedicated, skilled and knowledgeable people working around the clock in massive emergencies."

 

AWB releases its newest Washington Business Week video to help launch the 2012 summer program

Washington Business Week launches its 37th summer program with one-week camps at Western and Central Washington universities, Gonzaga and Pacific Lutheran.  It will also continue its Poland and Alaska programs as well.

To help launch the 2012 summer program, AWB commissioned Linda Coldiron, Coldiron Communications, Vashon Island; and, Cardinal Media, Poulsbo to produce the 8-minute video which is attached to the bottom of this posting.  It is a must watch!

It all starts on June 24 at Western and shifts to Gonzaga on July 8.  On July 22, it begins at Central Washington, the site of the original Washington Business Week program in 1976, and the Washington phase of the program ends with the Pacific Lutheran camp starting on August 5.

The Alaska Business Week program is a joint venture between the Alaska State Chamber of Commerce and Washington Business Week and will July 15-21 at University of Alaska, Fairbanks.

Four years ago, Washington Business Week initiated the Poland Business Week program in Gdynia.  Last year, it spread to Gdansk and Boleslawowo. Poland business leaders, the mayors of Gdynia and Gdansk and the U.S. Embassy in Warsaw have put their energy behind the program along with Boeing.  This year, the Boleslawowo session is scheduled to start on July 8 followed by Gdansk on July 29 and Gdynia on August 19.

Since its inception, more than 50,000 high school student and teachers have participated in the summer sessions alone.  Since the Association of Washington Business hatched the program in 1976, the program has added pathways for health care, manufacturing, energy and now agriculture along with the traditional business program.

Business Week is a not-for-program 501(c)(3) organization designed to let high school students and teachers learn about and experience America's Free Enterprise system.  It is funded through tuition and contributions.   AWB remains the founding sponsor and our members form the nucleus of the funders.

The enrollment process is now underway for high school upperclassmen to register and attend. 

Congratulations Judy

According to the Tukwila Reporter, the Southwest King County Chamber of Commerce honored Judy Coovert of Printcom, Inc., earlier this month.

Judy, who serves on AWB's executive and finance committees, is the Association of Washington Business (AWB) membership committee co-chair along with Gary Strannigan, Safeco Seattle.

At the Chamber's annual award luncheon, Coovert took home the Business Advocate award for demonstrating outstanding commitment to advocacy on behalf of business rights. Coovert is an active member of the Burien Economic Development Partnership and AWB named an award after her for Coovert’s volunteer work.

In 2009, AWB established the Judy Coovert Award to honor people who volunteer, lead, give back to employers and their communities, and who just go the extra mile.  "Judy is the example and is recognized around the Northwest for her work," AWB President Don Brunell said. "She is a jewel!"

Judy and her husband, Jim, own and operate Printcom, Inc., in Burien.  

Washington has work to do when it comes to its labor and employment regulatory policy

Last year, the Washington State Legislature passed workers comp reforms over the strong objections of labor unions and made some less divisive unemployment insurance changes. Those changes were critical to avoiding large increases to in workers' comp rates and UI taxes in 2012.

Because of the deep budget crisis in our state, the legislature is foregoing major employment law legislative changes this year. So how do we stack up nationally following those changes?

The U.S. Chamber of Commerce just released it annual 50-state review of each state's employment laws and regulations and assigns states to three categories: Good, Fair or Poor. More on that in a minute.

Lisa Rickard, president of the Chamber's Institute for Legal Reform and head of the Workforce Freedom Initiative, said the study examines each state to determine whether its labor and employment regulatory climate is conducive to job creation and new business formation. The most recent report was issued on Jan. 23.

If all states were to improve their regulatory climate to the levels discussed in the report, the effect would be a one-time boost of 746,462 jobs. Moreover, the rate of new business formation would increase by 12% resulting in the creation of 51,590 new firms each year across the country. In Washington State, the Chamber says 17,847 new jobs would be added and 12,167 new businesses.

However, Washington is ranked as a "POOR" state for labor and employment laws and regulations. There are 15 poorly rated states including California, Oregon, New York, Montana and Nevada. There are 15 states rates as "GOOD!" Included in the best category are South Carolina, Kansas, Oklahoma, Texas and Idaho---all direct competitors for Washington businesses and jobs.

Factors contributing to Washington's poor showing include:

• Numerous labor and employment mandates that exceed federal standards;
• Daily overtime rate on public construction contracts;
• Very high wage ceiling for income subject to unemployment insurance taxes;
• States minimum wage in excess of the federal minimum wage;
• Relatively high number of restrictions on employer inquiries into applicant and employee history; and,
• No right-to-work protections.

More than a decade ago, the Association of Washington Business, Washington Roundtable and Washington Research Council formed the Washington Alliance for a Competitive Economy (WashACE) to address the state's overly stringent regulatory climate.

As part of that effort, WashACE published comparative costs for all 50 states regarding nearly 60 key cost categories. The most glaring disadvantages for Washington are labor and environmental regulations which more than often exceed federal standards.

On the cost side, Washington has the nation's highest minimum wage and workers' compensation benefits paid as WashACE published in the 2012 Competitiveness Redbook. We also have the third highest unemployment insurance assessments on employers and fifth highest unemployment payments.

So while the 2011 Legislature started addressing the costs and impacts of the state's unemployment and workers' compensation, it was put on ice by this year's legislature as they struggle to close a $1.5 billion budget hole. Nevertheless, the problem remains for future legislatures and a new governor to address. Those costs and restrictions will force jobs and business opportunities out of state or offshore which is not what we want for our state's future.

In its conclusion, the U.S. Chamber warns: "While the recession is technically over, millions of Americans are still out of work and the rate of new job creation has remained at historically low levels compared with past periods of economic recovery. Any policies that can reverse this trend should be on the table for discussion"........and immediate ACTION!

Don C. Brunell, President (DonB@AWB.ORG)

Lawmakers say they can work on budget and chew gum

Sen. David Frockt and Rep. Larry Springer said Thursday that lawmakers are making progress toward balancing the state budget, despite charges from critics that they've been distracted by other issues such as abortion and same-sex marriage.

Most of the work is occurring behind closed doors at this stage of the 60-day session. But the legislators told AWB's weekly Lobby Lunch meeting that budget writers in both the House and Senate are hard at work.

"Not to be flip, but we actually work on a lot of things," said Springer, D-Kirkland. "We're all segmented. I think it's a misplaced concern to worry about that. Whether we are making significant progress on the budget sort of depends on who you ask, but I can tell you it's not for lack of trying."

Producing the budget will be especially hard this year because all the cutting in previous years leaves lawmakers with no easy choices, Springer said. Even so, the House is committed to producing a balanced budget that does not anticipate any new revenue, he said.

In other words, they won't make cuts with the expectation that programs will be restored later through a voter-approved sales tax hike, as Gov. Chris Gregoire has proposed, or some other plan that emerges from the Legislature.

"You have to assume that a revenue package will not pass," Springer said.

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.

Mandatory paid sick leave bill would hurt business and workers

Representatives from businesses large and small spoke out Tuesday against a proposal that would make Washington just the second state in the country to require employers to provide workers with paid sick leave.

For small employers with narrow profit margins, Senate Bill 6229 would add signficantly to the cost of doing business, forcing some to eliminate other worker benefits -- such as health insurance -- to make up the difference.

For large businesses, even those that already provide workers with paid sick leave, the bill would be an administrative burden and could conflict with existing labor contracts.

For example, Boeing's recent landmark agreement with the Machinist's union does not include an include a waiver for the proposed state law, meaning the contract and the state law would be at odds, Carolyn Ladd, a Boeing attorney, told members of the Senate Labor, Commerce & Consumer Protection Committee.

Proponents of the bill said it's needed to make sure that sick people don't report for work at restaurants and elsewhere, spreading disease.

But business owners said there are already ways to accommodate sick workers and protect public health without adding an expensive state mandate.

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.