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.

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."

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."

Brunell: Withdrawing new EPA rule is a good start, but there's a bigger problem

President Obama's decision to order the EPA to delay implementing new industrial ozone emission standards is a temporary reprieve that will save U.S. businesses as much as $90 billion per year, AWB President Don Brunell writes in his weekly column.

The price tag is that high because, as the EPA admits, the technology to comply with its proposed rules doesn't exist yet. Industry would have been forced to invent it within the next few years, or shut down.

But critics charge that the EPA has shown a pattern of inflating the projected environmental and economic benefits of its proposed regulations, and failing to back up the claims with scientific evidence.

"Federal regulations add hundreds of billions of dollars each year to the cost of doing business," Brunell writes. "Federal law says agencies can add to that burden only when they clearly justify the need and show there is no workable alternative. There is a disturbing pattern that the EPA is ignoring that requirement."

 

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.

How best to save Puget Sound?

Everyone agrees that Puget Sound is worth saving. The economy depends on it. Recreation depends on it. It's what makes the region unique.

But figuring out how to imrpove the health of Puget Sound is fraught with challenges and tension, points that were underscored Tuesday by a four-member panel that discussed work underway to update the Puget Sound Partnership's original action agenda. The document was developed in 2008.

The panel consisted of Martha Konsgaard, chairwoman of the Puget Sound Partnership's Leadership Council; Gerry O'Keefe, the partnership's executive director; Sam Anderson, executive officer of the Master Builders Association of King and Snohomish Counties; and Sandy Mackie, a land use attorney at Perkins Coie and chairman of AWB's Land Use Committee.

Part of the problem, Konsgaard said, is raising awareness of the issue. "People want to save Puget Sound," she said. "But the challenge is they say, 'Is there a problem?' Many people don't know there is a problem."

The source of the problem isn't what it used to be, either. "The era of the bad guy and one chimney stack is over," she said. "It's really how we're living on the land."

Brunell: Poland's rise as a bastion of free enterprise offers a July 4th lesson

Plenty has changed since 1975, in Poland and America, AWB President Don Brunell writes in his weekly column.

The same year that Business Week began at Central Washington University saw the Polish people impoverished with no right to free speech. Lech Walesa, the founder of the Solidarity movement, was in prison, Karol Jozef Wojtla was archbishop of Krakow and Ronald Reagan was governor of California.

A few years later, Archbishop Wojtyla became Pope John Paul II and Walesa went on to win the Nobel Peace Prize and in 1987, President Reagan challenged Soviet leadership to tear down the Berlin Wall.

Since the fall of communism, Poland has embraced the free enterprise system and three years ago, they brought the Business Week program to a high school in Gdynia, Seattle's sister city.

Ironically, the United States is going in the opposite direction, Brunell writes. An increasing number of regulations are stifling innovation and  forcing jobs and operations offshore.

"As we celebrate our independence on July 4, we should remember what the Polish people know all too well," Brunell writes. "The key to a better life for all citizens is to protect the people's freedom to innovate and create."

Brunell: Under siege from the unchecked federal bureaucracy

Partisan wrangling has brought gridlock to Congress, but federal bureaucrats are finding ways to implement President Obama's programs without congressional approval, AWB President Don Brunell writes in his weekly column.

One example is the National Labor Relations Board, which is carrying out organized labor's agenda after Congress failed to approve union-backed "card check legislation.

Another example is the Environmental Protection Agency, which is systematically implementing its own version of cap-and-trade after the Senate rejected the president's plan.

The end-run around Congress by federal bureaucrats is costing taxpayers and employers trillions of dollars and adding to the national debt, which now stands at $14.3 trillion.

Congress needs to wake up, and regardless of party affiliation, take back control of the legislative branch of government, Brunell writes. "Congress sets policy and federal agencies enforce it -- at least that's how our separation of powers is supposed to work."

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."

Brunell: NLRB decision on Boeing plant is a dangerous precedent

During the 2008 presidential campaign, candidate Barack Obama promised organized labor that he would support their agenda. Now that he's failed to get the agenda through Congress, Obama has turned to regulation, AWB President Don Brunell writes in his weekly column.

The latest evidence of that is the National Labor Relations Board's move to shut down Boeing's non-union South Carolina production facility. The board, a supposedly neutral body that is in fact stacked with former union lawyers, claims that Boeing chose to locate a plant there out of "anti-union amicus" and that the decision violates federal law.

In truth, the move to South Carolina was a reasonable business decision that has created mor than 1,000 jobs and generated roughly $2 billion worth of investments, Brunell writes. And Boeing still has a strong presence in the Puget Sound, where its workers are among the best paid in America.

"Allowing the government or unions to dictate investment decisions and plant locations is a ery bad precedent to set," Brunell writes, "whether it be Congress, the president or regulators like the NLRB."