Olympia Business Watch

Brunell: New federal regulations will boost the cost of gas -- again

President Obama wants to invest more than $20 billion on roads, bridges, highways and ports as a way to stimulate economic growth. At the same time, the Environmental Protection Agency announced new mileage standards and air quality rules that could raise the price of gas as much as 9 cents per gallon.

It's as if one part of the federal government was trying to rescue a floundering economy while another part tosses it a concrete block, AWB President Don Brunell writes in his weekly column.

"With our teetering economy, it's vital that Congress and the Obama administration carefully weigh any benefit of new regulations against their impact," Brunell writes.

State lawmakers play a role, as well.

Washington legislators want to increase the state's gas tax 10 cents per gallon, a move that would bring the total of state and federal taxes to 65.9 cents -- third highest in the nation.

There is no question that Washington needs additional money to repair roads, bridges and highways, Brunell writes. But how the gas tax is structured -- and how the money is spent -- will determine whether it harms or helps our economy.

Peterson: Act now on CRC or wait at least 10 years

 

Lynn Peterson, Washington's transportation secretary, speaks Thursday at AWB's Lobby Lunch meeting. Photo: Dan Brunell/AWB

A change in any element of the plan to build a new Interstate 5 crossing over the Columbia River will result in at least a 10-year delay, Lynn Peterson, Washington's new transportation secretary, said Thursday.

That's because removing any element of the proposed Columbia River Crossing  -- such as the controversial light rail line -- will require a new environmental impact statement, Peterson told AWB members at the weekly Lobby Lunch meeting.

The EIS alone would add millions to the cost of the project, Peterson said, and construction costs would likely double during that time.

Her comments came a day after U.S. Transportation Secretary Ray LaHood visited Olympia to lobby state lawmakers on behalf of the project, which has run into opposition from Vancovuer lawmakers who oppose extending light rail from Portland and putting a toll on the crossing.

If Washington state doesn't come up with its $450 million share of the $3.4 billion crossing, hundreds of millions in federal funding earmarked for the project will likely go to other projects LaHood said.

"It's time to fish or cut bait," he said.

Lobby Lunch: Is transportation package and DOT reform either-or proposition?

Rep. Judy Clibborn (D - Mercer Island) speaks to the AWB lobby lunch crowd on transportation issues as Sen. Doug Ericksen (R - Ferndale) looks on. Photo: AWB / Dan Brunell

Before she formally announced her $9.8 billion transportation funding proposal, House Transportation Chairwoman Judy Clibborn, D-Mercer Island, said she was hearing from all sides that it wasn't large enough.

Business, labor, and environmental groups all wanted more, Clibborn said Thursday at AWB's weekly Lobby Lunch meeting. But they all wanted more of different things.

After the proposal was unveiled, and the public found out that it included a 10-cent-per-gallon gas tax hike, the discussion changed.

"One of the reasons I wanted to roll it out is have the public say '10 cents! Oh my God!'" Clibborn said. "So now we're tempering our conversation around 'What can you really do?"

The public reaction may have brought the talk back to earth in Clibborn's view, but it was clear that Republicans see it differently.

Rep. Ed Orcutt, R-Kalama, said the reaction from his constituents has been, "Oh my God, no!"

Video Rewind: Rodney Tom, Ann Rivers and Richard DeBolt

Last week, our weekly Lobby Lunch series featured Senate Majority Leader Rodney Tom, D-Medina, Sen. Ann Rivers, R-La Center, and Rep. Richard DeBolt, R-Chehalis.

Transportation figured prominently in the discussion, which came the day after Rep. Judy Clibborn, D-Mercer Island, unveiled a $10 billion transportation funding proposal.

Also, as noted in a previous blog post, Tom suggested that Gov. Jay Inslee's choice to lead the state Department of Transportation may encounter a difficult confirmation hearing.

Here are some video highlights of the rest of the meeting, starting with DeBolt's observations about the 2013 session so far -- a session that he believes sees a "chasm of philosophies" in the House of Representatives that's as deep as he's ever seen.

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.

Lobby Lunch: Transportation secretary pick won't receive a rubber stamp

Sen. Rodney Tom, D - Medina, speaking at the Feb. 21, 2013 AWB Lobby Lunch. Photo: Dan Brunell / AWB

Lynn Peterson, the Oregon highway engineer chosen by Gov. Jay Inslee to lead Washington's Department of Transportation, won't necessarily cruise into the position, Senate Majority Leader Rodney Tom suggested Thursday at AWB's weekly Lobby Lunch meeting.

"You will see a confirmation hearing that is not a rubber stamp," Tom, D-Medina, said in response to a question from Larry Ehl, publisher of Transportation Issues Daily.

Peterson is known as an advocate for public transit and her selection has raised concern among those who believe Washington's economic health requires investment in things like highways, bridges and ports.

Tom said he wants to learn more about her background and her vision for the job.

"If the sole focus is on carbon reduction, that's probably not going to work as transportation secretary," he said, noting that the position has wide-ranging responsibilities and requires somebody who can take a "balanced approach."

That's particularly important, Tom said, if lawmakers hope to pass a major transportation funding package this year.

Video Rewind: Democratic Caucus leaders deliver Valentine's Lobby Lunch remarks

Our Valentine's edition of Lobby Lunch featured guests from the House and Senate Democratic Caucuses: Sens. David Frockt, D-Seattle, and Nick Harper, D-Everett, and Reps. Jim Moeller, D-Vancouver, Tami Green, D-Lakewood, and Kevin Van De Wege, D-Sequim.

Our blog post on the meeting focused on Moeller's comments regarding transportation, a subject that will be in the news this week if Rep. Judy Clibborn, D-Mercer Island, releases a funding proposal on Wednesday as expected.

But the legislators also touched on education, health care, and Gov. Jay Inslee's jobs plan.

Check out the full video below:

2013 Lobby Lunch Series: House and Senate Democratic Caucuses. from Association of WA Business on Vimeo.

Lobby Lunch: No need to fight over transportation dollars

Rep. Jim Moeller, D - Vancouver, addresses the crowd at AWB's Feb. 14 Lobby Lunch as Sen. Nick Harper, D - Everett, looks on. Photo: Dan Brunell / AWB

State Rep. Judy Clibborn, chairwoman of the House Transportation Committee, will be rolling out a major transportation tax package next week -- or possibly the following week -- Rep. Jim Moeller, D-Vancouver, said Thursday at AWB's weekly Lobby Lunch meeting.

And once it's out there, Moeller made it clear that he wants lawmakers line up to support it, rather than bickering about which parts of the state stand to benefit the most from it.

"There's no need to fight over who gets what," Moeller said, adding that the future of Washington's economy depends on a vibrant transportation network.

Joining Moeller at the luncheon were Sens. David Frockt, D-Seattle, and Nick Harper, D-Everett, and fellow Reps. Tami Green, D-Lakewood, and Kevin Van De Wege, D-Sequim.

One of Moeller's main interests with regard to transportation is the planned replacement of the Interstate 5 bridge over the Columbia River.

The so-called Columbia River Crossing project is expected to be one of several "mega projects" included in Clibborn's tax package, along with money for a new Highway 520 floating bridge, Spokane's north-south freeway and Highway 167 in Pierce County.

The proposal is expected to come out next Wednesday, although Moeller hinted at a possible delay, saying it would come "next week or the week following."

#awbday13 rewind: issue panel videos

Thanks to all who took time out of their busy schedules to attend AWB's 2013 Legislative Day Wednesday in Olympia.

We were grateful to have the support of TVW, Washington state's very own public affairs television network, at this event. Their team joined us for two issue panels and the governor's luncheon keynote remarks. We also blogged these sessions, plus others throughout the day, so if you missed out on the trip to Olympia, you can get caught up on things online.

Transportation Panel (blog post here)

 

Tax & Fiscal Panel (blog post here)

 

Gov. Inslee Remarks to 2013 Better Workplace Awards Luncheon (blog post here)

 Other issue area panels (video not available):

• Legislative Leadership (blog post)
• Employment Law Panel (blog post)

Lawmakers differ over when to seek new transportation dollars

Rep. Ed Orcutt, R - Kalama, (left) and Rep. Judy Clibborn, D - Mercer Island, speaking at AWB Legislative Day.

No one is arguing about whether Washington needs to spend more money to maintain and expand its network of roads, bridges, ferries and ports.

But the leaders of the Legislature's transportation committees aren't yet united on the question of when to ask voters to raise taxes to pay for improvements to the state's transportation infrastructure.

Speaking at the opening panel of AWB's 2013 Legislative Day, Sen. Tracey Eide, D-Federal Way, and Rep. Judy Clibborn, D-Mercer Island, said they believe lawmakers should move this year on a bipartisan transportation funding request.

But Sen. Curtis King, R-Yakima, and Rep. Ed Orcutt, R-Kalama, aren't so sure.

King, who serves as co-chair of the Senate Transportation Committee along with Eide, said he worries that such a request would fail this year. 

And Orcutt, the ranking Republican on the House Transportation Committee that's led by Clibborn, said he wants to place an emphasis on getting people back to work before seeking new tax revenue.

Orcutt also said he wants to see officials make better use of under-utilized rural roads before spending money to increase vehicle capacity in the congested Puget Sound region.

"I'm not saying 'no' to a transportation package forever," Orcutt said, adding, "I'm not sure right now is the right time."

How a hundred dollar bill can change the US economy

In Wednesday's speech given before members and sponsors at AWB's Policy Summit, UPS CEO Scott Davis talked about the founding of UPS. Company founder Jim Casey borrowed a $100 from a friend more than a hundred years ago to start the company that became UPS. Davis used the visual of a $100 bill to remind attendees that despite economic challenges and setbacks, companies can still excel. The same is true for our country. 

"I think that this country that I love is at a crossroads," said Davis. "I want our elected officials in Washington DC to start running this country the way we run our companies -- with real leadership, courage, discipline, and foresight."

Davis talked about the impending fiscal cliff and tax cuts that are set to expire in January 2013 unless Congress takes action. Davis is afraid that if Congress fails to come to an agreement, it will send the economy back into recession. He also talked about the trade imbalance and how trade can be a big driver of growth.

Boeing future looks bright but challenges loom on the horizon

Boeing employs 85,000 employees in the state and created 12,000 jobs here over the past 18 months. These are family wage jobs in engineering and manufacturing with good benefits. Boeing also contracts with 2,000 aerospace partners in the state and paid them 4.3 billion last year. So what's the problem?

The problem, according to Brett Gerry, vice president and assistant general counsel for Boeing Commercial Airplanes who spoke at AWB's Policy Summit Wednesday, stems from increased competition and the need for a skilled workforce.

"Over the next 20 years, demand for jets is expected to outstrip the gross domestic product and could mean 30,000 new airplanes entering service," said Gerry.

With advances in airplanes like the 787, which boasts lighter composite materials making it 20 percent more fuel efficient than previous models, it's easy to see this demand in the future. Other companies, aside from Boeing and Airbus, have been entering the marketplace making it more crucial for Boeing to meet the challenge in the marketplace.

Supreme Court says gas-tax lawsuit can proceed without tribes

The Washington Supreme Court sided with a coalition of gas station owners Thursday, ruling that a lawsuit the group filed over compacts between the state and some American Indian tribes can move forward even though the tribes are not a party to the suit.

The coalition filed suit in Grays Harbor Superior Court in 2010, arguing that the compacts -- which require the state to refund 75 percent of taxes collected at tribe-owned gas stations -- are unconstitutional.

But state attorneys argued successfully to have the case dismissed, saying it couldn't move forward without the tribes -- and the tribes could not be named as defendants because they have sovereign immunity.

AWB filed an amicus brief last year, urging the court to take up the case. The state, the brief argued, shouldn't be allowed to hide beyond the issue of tribal sovereignty.

"As representatives of one of the most taxed and regulated communities in Washington, AWB finds offensive the notion that state officers might act contrary to the constitution or contrary to state with respect to taxpayer money, but be insulated from any judicial check on that action simply because the illegality is with a sovereign entity within the state," wrote Kris Tefft, AWB's general counsel.

The court agreed, ruling 5-4 that the case should proceed.

"Sovereign immunity is meant to be raised as a shield by the tribe, not wielded as a sword by the State," Justice Debra Stephens wrote in the majority opinion.

The Washington Policy Center, which also filed amicus brief urging the court to review the case, blogs on the decision here.

Erik Smith at the Washington State Wire called the ruling a "major blow" to the deals that Gov. Chris Gregoire struck with the state's tribes.

The Associated Press covered the decision here, and The News Tribune's Jordan Schrader blogged on it here.

Rail shipping company’s gamble pays off

Jim Kleist, vice president of the Northwest region for Railex, near Wallula. (Photo: Daniel Brunell/AWB)

Starting a multi-million dollar rail distribution company just before the Great Recession hit doesn’t seem like a winning business model, but for Railex LLC it was the right opportunity at the right time. Not only has the company’s original idea of shipping potatoes across the country worked well, but Railex has since expanded to ship other produce and wine.

The company recently announced that it’s expanding its operation in Wallula to include a $20 million, 500,000-square-foot wine storage and distribution center for wine from Ste. Michelle Wine Estates (PDF) and other wineries. It will allow the company to store up to 10 times more wine and add an estimated 25 employees. 

First profiled in AWB’s Washington Business in 2009, Railex started by shipping potatoes and other fresh produce via a rail  hub in the Tri-Cities to Albany, N.Y. Railex secured lease agreements with Union Pacific Railroad and CSX Transportation to pull the rail cars across the country with little stopping and no disconnecting. As a result, it could safely ship spuds across the country in just five days.

Brunell: An example for us all

If there is one bright spot to be found from the recession, it is the increase in volunteerism it has prompted.

In communities all over the country, neighbors and volunteers have stepped in to pick up the slack when cash-strapped governments have been forced to reduce public services, AWB President Don Brunell writes in his weekly column.

In the Olympia-Lacey, a group of citizens recognized the need 25 years ago for a safe train station to replace the lean-to that served as the East Olympia Amtrak station.

The tipping point, Brunell writes, came after a train dropped off a man in a wheelchair one night in 1986.

"No one was there, the vandalized phones weren't working and he spent the entire night stranded," Brunell writes.

Crosscut recently featured the group of citizens who stepped up to that challenge by building and operating their own Amtrak station, with no help from the federal government or Amtrak.

They set an example for us all.

"Instead of complaining about problems, they -- and we -- should set about solving them with our time, skills and elbow grease," Brunell writes.

"Isn't that what America is all about?"

Transportation plan all about tolls, biding time

Any thought of going to voters with a major gax tax proposal was scuttled early in the legislative session, leaving lawmakers to ponder more modest fee increases -- and begin laying the groundwork for something bigger in a few years.

That was the message delivered Thursday by the leaders of the House and Senate transportation committees during AWB's weekly Lobby Lunch meeting.

The foursome -- Sens. Mary Margaret Haugen, D-Camano Island, and Curtis King, R-Yakima, and Reps. Judy Clibborn, D-Mercer Island, and Mike Armstrong, R-Wenatchee -- emphasized how well they work together despite party differences.

"Transportation isn't partisan," Clibborn said.

And they called on business leaders to join with them in backing the next major transportation initiative.

Whatever it is likely won't come until 2014. It's not wise to run a gas tax proposal in an off-year election, Clibborn said.

Whenever it arrives, it will almost certainly include a gas tax component -- although Armstrong would like to look for other funding options.

Brunell: GPS needs to control our skies, too

The GPS unit in your car is more advanced than the technology used by air traffic controllers.

That's something to think about the next time you're on a commercial airliner, AWB President Don Brunell writes in his weekly column.

It doesn't have to stay this way. Congress approved a new GPS air traffic control system known as NextGen in 2003, but it has yet to be fully implemented, partly because of the cost -- $40 billion -- and also due to bureaucracy.

Nevertheless, it's an investment well worth making, Brunell writes. Congestion and weather delays tied to the limitations of radar cost airlines and consumers almost $10 billion last year.

Some airlines are moving ahead. Alaska Airlines is using GPS to assist with landing at Juneau International Airport, and the company said it prevented 729 flight cancellations last year.

"This is an opportunity for the FAA to demonstrate that it understands the importance of efficiency, precise information and a timely response," Brunell writes, "in our air traffic control system and in our federal bureacracy."

Brunell: Good news, bad news about cars

Today's cars are safer, more fuel-efficient and emit fewer greenhouse gases than ever before. That's the good news, AWB President Don Brunell writes in his weekly column.

The bad news is that the state's highway system has relied for decades on gas taxes to pay for construction and maintenance.

When cars got 10 or 12 miles per gallon, there was plenty of money to pay for projects, Brunell writes. But now that they're more efficient, they use less gas -- so there is less coming in to pay for highway projects.

And the problem will only grow as alternative fuel vehicles become more popular.

So what's the answer?

First, alternative fuel vehicles must pay their fair share. Tolls and special HOT (high occupancy tolls) lanes must also be part of the equation. Finally, transit schedules need to be adjusted so that buses and ferries no longer run at times when they are virtually empty.

"The good news is we have the technology," Brunell writes. "The bad news is we take too long to study, approve and build anything."

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?"

Lawmakers look to tolling, fees to fund transportation

Three of the state's top lawmakers on transportation issues stopped by AWB today to talk about everything from Highway 520 and tolling to the ferry system and the need in the not-too-distant future for a new source of revenue.

Like other discussions in Olympia that involve money, it wasn't exactly an upbeat discussion.

"The good news is our budget isn't as bad as the other budget," Sen. Mary Margaret Haugen, D-Camano Island, said comparing the upcoming state transportation budget to general fund budget. "The bad news is we're broke, too."

Haugen, chairwoman of the Senate Transportation Committee, was joined by Sen. Curtis King, R-Yakima, the ranking minority member of the committee, and Rep. Mike Armstrong, R-Wenatchee, ranking minority member of the House Transportation Committee.

The state needs money, lots of money, to address all of its transportation issues. The statewide total is about $160 billion, Armstrong said. Look for this year's transportation budget to be in the range of $7 billion, he said.

Some of that money could from fees. A bill proposing a 25 cent surcharge on ferry passengers could help finance construction of new ferries, Haugen said.

Stormwater tax returns: Deja vu in Olympia

It's back. Only now it's called a fee instead of a tax.

A proposal to levy a 1 percent fee on the wholesale value of pesticides, herbicides, fertilizers and petroleum products has returned to the Legislature this year following similar failed attempts the last two years.

Backers of the idea want to generate hundreds of millions of dollars in new revenue to fund stormwater cleanup projects throughout the state. No one is opposed to cleaning up Washington's water, but the targeted agriculture and petroleum-related businesses that would be hit with a huge new tax -- one that would raise $345 million over the next two years -- are crying foul, telling lawmakers that it's not fair to make them pay for what's really everyone's problem.

"SB 5604 unfairly singles out two industries, namely petroleum and agriculture, and forces them to pay for a societal problem," Grant Nelson, AWB's government affairs director, told lawmakers Thursday during a meeting of the Senate Ways & Means Committee.

Gov. Gregoire's Keynote Remarks at AWB's 2011 Legislative Day

(Recorded: Feb. 03, 2011) Gov. Chris Gregoire’s keynote remarks at AWB's annual Legislative Day luncheon. Topics include unemployment insurance, workers' compensation, state employee pensions and education.

Rewind: Video from Sen. Brown and Rep. Springer's visit

As noted on the blog yesterday, the Senate and House are taking different approaches to the debate over unemployment insurance. Here is a video clip of Sen. Lisa Brown, D-Spokane, describing the Senate's position (a two-bill approach) to AWB members.

Sen. Lisa Brown Highlights: Unemployment Insurance from Association of Washington Busine on Vimeo.

Rep. Larry Springer, D-Kirkland, told the same audience that House members are still hoping to address unemployment insurance with one bill - and be done with it for the session.

Rep. Larry Springer Highlights: Unemployment Insurance from Association of Washington Business on Vimeo.

A few other highlights:

AP legislative preview offers glimpse of the challenge facing lawmakers

Are taxes really off the table? And what does government reform really mean?

The leaders of the state's legislative caucuses answered questions from the state's press corps this morning during the annual Associated Press legislative preview, and their comments helped illustrate the challenges that lie ahead for them during the 2011 session.

The bipartisan panel seemed to agree that government reform is essential if lawmakers hope to address the estimated $4.6 billion shortfall in the 2011-13 budget, but they showed a reluctance to address some major elements of the budget.

When asked whether state employees should give up more and whether lawmakers should discuss doing away with collective bargaining, Sen. Lisa Brown, D-Spokane, said that wouldn't solve the problem. "Collective bargaining is not the fundamental cause for the situation we're in," Brown said.

Regarding the Basic Health and Disability Lifeline, the social service program formerly known as General Assistance - Unemployable, House Speaker Frank Chopp, D-Seattle, strongly defended the programs, saying thousands of people are depending on them.

On the Republican side, Walla Walla Sen. Mike Hewitt and Chehalis Rep. Richard DeBolt spoke up for levy equalization, which helps less affluent school districts. "This is one we know we will fight to the death on," DeBolt said.

Brunell: Electric cars will be a shock to the grid

Electric cars like the new Nissan Leaf and Chevy Volt may well be the future of the automobile, AWB President Don Brunell write in his weekly column. But they are not necessarily a panacea, in part because of their appetite for electricity.

Many view electric cars as a way to reduce greenhouse gas emissions, but the Edison Institute estimates that driving 10,000 miles in an electric car will use about 2,500 kilowatt-hours of electricity, or 20 percent more than the average home uses in a year.

That electricy must come from power plants, but many of the same activists who promote electric cars are working to constrict the generation of electricity, Brunell writes. Some of them shun hydropower, which supplies 70 percent of our state's electricity.

Ironically, the abundance of Washington's cheap, renewable hydropower was a major reason that German automaker BMW and partner SGL Group chose Moses Lake to make carbon fiber for its upcoming electric-powered Megacity commuter car.

There is little doubt that electric cars are the wave of the future, but there are trade-offs, Brunell writes. "Failing to deal with those trade-offs will only compound our growing problem of supplying adequate electricity to our factories, hospitals, businesses and homes — and cars."

 

Alaska Air listed among notable recession survivors

Sea-Tac-based Alaska Airlines is one of 10 companies labeled "Back From the Brink" by U.S. News & World Report.

"It's been a bumpy decade for most airlines," the article notes, citing spikes in fuel prices and a plunge in travel. But after suffering losses in 2006 and 2008, Alaska turned a profit last year and its stock price is up 135 percent over the last two years thanks to cost-cutting and other measures.

Alaska, an AWB member, is the only airline and the only Northwest company to make the list of notable recession survivors. Others include Ford Motor Co, E-Trade (the online brokerage with the talking baby television spots), Corning and Jo-Ann Stores.

The list identified companies that "stared into the abyss -- and backed away from it on their own power."

Specifically, the magazine looked for companies that ranked near the bottom on Standard & Poor's long-term debt ratings and quality rankings over the past two years, but whose quality or debt rating has improved recently.

It cast a dim view on companies that survived only because of a government bailout.

The listing is only the latest bit of good news for Alaska. The company is also winning praise for turning around its on-time performance, going from dead last a few years ago to among the top performers, according to The News Tribune.

And the airline was recently named one of the greenest in the country thanks to its fuel-efficient fleet and recycling efforts.

Boost in state oil tax will cost good jobs, refinery workers tell lawmakers

Keith Vanderbeek left a job in the mining industry a few years ago in search of more stability for his family. Now he's worried that a proposed boost in state oil taxes could cost him his job as a maintenance supervisor at the Tesoro refinery in Anacortes.

"We just couldn't afford it," Vanderbeek said of Tesoro, a relatively small player in the hard-hit oil refining sector. "There's no way we could afford it."

His family couldn't afford it if Vanderbeek lost his job, either.

"The house would be gone," said Vanderbeek, 44, who is married and has a 5-year-old daughter.

Vanderbeek and a few dozen of his colleagues from the Tesoro refinery converged on the Capitol Wednesday to plead their case with lawmakers who are still struggling to balance the state budget and adjourn the special session that began Monday.

Workers from two other refineries were expected to make similar visits Thursday and Friday.

Their message: The state's five major refineries employ 5,000 people either directly or as contractors at an average wage of more than $100,000.

But the nation's refining industry is particularly vulnerable because of reduced fuel consumption, and is poised for a major contraction.

Any increase in the tax burden now could be devastating to Washington's refineries, which already pay far more in taxes than other states.

"I think (Anacortes) would almost turn into a ghost town," said Glenn Hoffman, a 52-year-old data base administrator at Tesoro. "I'm highly concerned."

Gregoire leads coalition calling for Boeing to land Air Force tanker deal

They're calling it a once-in-a-generation opportunity to create new American jobs.

A coalition aimed at rallying support for Boeing's bid to build the next generation of Air Force aerial refueling tankers kicked off Monday with a press conference in Washington, D.C.

Gov. Chris Gregoire, chairwoman of the U.S. Tanker 2010 Coalition, said there has been enough delay in the military's effort to build the new tanker, and she called on the Pentagon to award the $35 billion deal to Boeing.

"It's important that we keep Americans at work," Gregoire said. "Awarding Boeing the contract to supply our next fleet of tankers will ensure work for 40,000 to 50,000 people across the country."

The coalition consists of Gregoire and a bipartisan mix of governors from eight other states where Boeing would work on the tanker. Its list of supporters includes the Washington Aerospace Partnership, a coalition of more than 100 businesses and organizations, including AWB.

Time to open up transit lanes to private buses and shuttles

State Sen. Mary Margaret Haugen summed up the logic behind Senate Bill 6570 rather succinctly at a hearing on the bill this week.

"To me, a bus is a bus is a bus, and nobody cares what color it is," said Haugen, D-Camano Island.

The legislation, sponsored by Haugen and supported by AWB, would open up transit and high-occupancy vehicle lanes to private buses and shuttles, and make it easier for private transportation companies to use public park-and-ride lots.

As it is, there are some transit-only lanes in the Seattle that exclude private vehicles, and shuttles making return trips with no passengers on board -- known in the industry as "dead-heads" -- are not permitted to use HOV lanes.

Also, public park-and-ride lots are difficult for private companies to use, leading some -- such as Microsoft -- to lease space from churches in order to provide shuttles for employees.

If the goal is to get cars off the road -- reducing both congestion and pollution -- it just makes sense to open up the lanes, supporters testified during a hearing Thursday. It shouldn't matter whether a vehicle carries the logo of a private company or public transportation agency.

"Our services need to be seen by the people of the state of Washington as part of the solution," said Gladys Gillis, CEO of Starline Luxury Coaches. Her company provides shuttle services for many large Seattle-area employers, including Starbucks, Amgen, Premera Blue Cross and Boeing.

Video after the jump.

Good News, Bad News for Columbia River Crossing

It was a mixed bag this week for citizens in southwest Washington following the Columbia River Crossing project. First, the good news.

On Tuesday, President Bush issued an order elevating the I-5 improvements to "high priority" status, a rating that has been extended to just 20 other projects in the last five years. The priority was requested jointly by the Oregon and Washington Departments of Transportation and is supposed to help expedite decisions by officials reviewing federal and state environmental review requirements related to the project.

The bad news? The Federal Highway Trust Fund, which provides a third of the funding states use for projects like the Columbia River Crossing, faces bankruptcy next year unless Congress acts this year to resolve the crisis. According to Kathie Durbin's piece in the Columbian, the fund was supposed to finance about $40 billion in transportation projects next year, but gas prices have put a huge dent in federal gas tax revenue. The fund is facing a $3.2 billion deficit in 2009.

U.S. Sen. Patty Murray, who chairs the Senate Appropriations Transportation Subcommittee, shared the news at a state labor convention in Vancouver earlier this week but did not, apparently, offer specifics on how this might affect the Crossing. According to the Columbian, Gov. Gregoire expects the federal government must provide more than the $400 to $600 million estimated for the project's bridge and highway improvements. And Washington and Oregon are expected to contribute between $401.5 million and $715 million each for a project that could total upwards of $3.5 billion. But with declining gas tax revenue in our state (and Oregon), this could generate a perfect storm for lawmakers come January with many of those same dollars already committed to other projects.

As AWB's Don Brunell noted in a column this past spring, "while the cost of the project is high, the cost of doing nothing is even higher." Leadership is needed now to ensure the future economic vitality of both states and the communities along the Columbia River.

Brunell on Bridging the Columbia

Today's Columbian carries AWB president Don Brunell's column, a timely reminder of the importance of the I-5 bridge connecting Washington with Oregon.

Currently, we have two sets of bridges spanning the Columbia River on I-5 and I-205 — that’s it. ... they will eventually have to be upgraded, rebuilt and replaced.

...Capacity is an issue as more people and cargo cross the I-5 Bridge. The side-by-side spans, with three lanes in each direction, are the only remaining drawbridges on I-5. Periodically, they have to close when tugs, barges and large pleasure craft need to pass. So, the I-5 bridge complex itself causes traffic delays. Fortunately, that is not the case on I-205.

As Brunell points out, the Portland-Vancouver metro areas has experienced tremendous population growth, with more expected. Failing to provide for increased capacity has clear competitiveness consequences.

Columbia River Crossing (CRC) ... estimates that five major sectors of the Northwest economy are impacted by the I-5 Bridge: Wood products; transportation equipment and steel; agriculture and food products; high tech; and distribution and wholesale. These industries make up 30 percent of the region’s economy but account for 70 percent of the freight tonnage.

AWB has been working with its Oregon counterpart to advocate for the CRC project.

2008 AWB Session Review and Voting Record

We've just posted the 2008 Legislative Review and Voting Record to our website. AWB members will soon receive them with the May/June issue of Washington Business, which is in the mail now. Take a minute to review how your legislators voted on business issues in 2007 and 2008.

In the Senate, Republican Senators Jim Honeyford and Linda Parlette scored 100 percent in 2008.

Top ranking House members with 2008 scores of 96 percent were Republican Representatives Larry Crouse, Joel Kretz and Lynn Schindler.

Gov. Chris Gregoire received a 2008 score of 29 percent.

Economic Stimulus Through Public Works Spending

Carter Wood at the National Association of Manufacturer's ShopFloor blog looks at Governor Gregoire's Seattle Rotary Club speech yesterday calling for increased spending on public works as a form of economic stimulus.   

His verdict?  Deja vu.

Olympia Business Review - Episode One: 2008 Legislative Preview

Since it is the first day of session we thought it would be great to launch our new podcast, Olympia Business Review. With this podcast, we will be talking to AWB staff, members and public officials about anything and everything that affects our states economic climate. The world of business and politics is our oyster.

In this first episode, Dan sits down with Gary Chandler (AWB Vice President of Governmental Affairs) and Richard Davis (AWB Vice President of Communication) to discuss some of the issues facing business in the 2008 legislative session.

Issues covered: Budget, Property Taxes, Family Leave, Climate Change, Transportation, Health Care, and the so-called "worker privacy act."

To open in a new page, click here.

Secretary of State Has Eyman's Number (for the transportation initiative)

Tim Eyman just emailed me (and thousands of others).

ReduceCongestion.org, the Reduce Traffic Congestion Initiative, was assigned initiative number 984 today (so much for the conspiracy theory that we keep filing initiatives until we get a 'cool' number).

I'm sure someone could make something of I-984 calling to mind '1984,'  and initiative backers of all stripes have resorted to "newspeak,"  but ... I'll pass.

Eyman has improved the initiative - the newspeak temptation is hard to resist. Here's how he describes it.

we've made three excellent improvements:

1)  Better accountability:  ReduceCongestion.org now empowers the State Auditor to identify and establish performance benchmarks using best practices to optimize traffic light synchronization and emergency roadside assistance that state and local governments will be measured on.  The State Auditor's office will track and monitor and regularly report to the public on the progress on these and other relevant issues.  Sonntag is also tasked with tracking and monitoring the revenues into and expenditures out of the "Reduce Traffic Congestion Account" and reporting to the public regularly to ensure greater transparency, accountability, and compliance.

2)  Better funding:  the extremely positive feedback from supporters and elected officials to our measure's increase in revenue for transportation has inspired us to bump the percentage of dedicated vehicle sales tax revenues from 10% to 15% to further reduce traffic congestion.

3)  Better taxpayer protection:  there's been talk of simply charging people extra just to drive on existing highways, freeways, roads, and streets, including adding Global Positioning System (GPS) devices or transponders to vehicles or other methods.  If citizens are double-taxed, then any tolls or charges will be dedicated and deposited in the "Reduce Traffic Congestion Account."

I reckon we'll hear more later.

MORE  The Spokesman-Review doesn't think much of it.

New Year, New Initiative

And that's the last "new x, new y" theme I'll use.

Chris Mulick reports on Tim Eyman's latest transportation initiative.

Tim Eyman plans to push an initiative this year that once again will focus on spending more of the state's transportation dollars on congestion relief....

Eyman said the measure:

"* Opens carpool lanes to everyone during non-peak hours (midday and evenings on weekdays and all day and all night on weekends -- peak hours defined as Mon-Fri 6-9 am, 3-6 pm) -- which reduces traffic congestion and increases traffic flow;

* Requires cities and counties to synchronize traffic lights on heavily-traveled arterials -- which reduces traffic congestion and increases traffic flow; and

* Increases funding for emergency roadside assistance (to clear out accidents faster) -- which reduces traffic congestion and increases traffic flow."

I'm on Eyman's email list as well (not that I'm suggesting it's a small and exclusive club). Here's more from his morning missive.

ReduceCongestion.org, the official campaign name (C1PC will be filed with the Public Disclosure Commission this week) for the Reduce Traffic Congestion Initiative, will be filed with the Secretary of State's office in the Capitol Dome in Olympia at 10 am, January 14th, the first day of the 2008 legislative session and the first day initiatives to the people can be filed.  Petitions for ReduceCongestion.org will be sent out to everyone in mid-February.  We'll then have until early July to raise the funds and gather the 224,880 voter signatures to qualify ReduceCongestion.org for the November 10th, 2008 ballot.

And they're off.

UPDATE No need to wait for the 14th. This just in from Eyman.

It turns out that unlike previous years, the first day to file initiatives to the people is DIFFERENT than the first day of the legislative session.  So day after tomorrow -- Friday, January 4th -- at 11 am (NOT 10 am as indicated below), Jack, Mike, and I will be filing our 2008 initiative described below.  It'll be at the Secretary of State's office in the Capitol Dome in Olympia.

And Joe Turner at The News Tribune has this on the initiative.

Here's the poison pill that will align almost all of officialdom against Eyman: He wants to divert existing state sales tax into a special anti-congestion account.

That, of course, means money that now goes to public schools and welfare moms and prison operations would be used to pay for traffic stuff. Most legislators and governors don't like that.

Establishment opposition hasn't hurt Eyman much in the past, though.

Roads & Transit

The next issue of Washington Business, coming next week to a mailbox near you, has a brief overview of the biggest transportation and tax issue on the November ballot. The $18 billion roads and transit package (it's a contested number, it seems) will shape regional - inevitably, statewide - transportation plans for years, if not decades. Sunday, the Seattle Times ran an excellent overview by Andrew Garber.

Garber quotes a number of key legislators urging support for a compromise package that excites few, if any. Sen. Ed Murray's comment is typical and apt.

State Sen. Ed Murray, D-Seattle, a vice chairman of the Senate Transportation Committee, said he doesn't want to be "one of these people who makes perfect the enemy of the good."

It's been a long time coming.

The roots of the proposal go back at least seven years. ...

The thinking was there would never be enough support for a massive statewide tax increase to pay for Seattle-area mega projects such as replacing the Alaskan Way Viaduct and the Highway 520 bridge.

So, in 2002, the Legislature created the Regional Transportation Investment District, which set about developing a three-county roads package.

At the same time, Sound Transit was pursuing a separate effort to expand its light-rail system.

State lawmakers began to worry about taking two big tax proposals to voters in separate ballot measures. Last year they decided to tie the two together, arguing that would increase the odds of passage for both.

There's more than a little polarization. The Eastside Transportation Association, the Sierra Club, and others are, well, skeptical, though hardly of like mind. But as David Postman pointed out last month, there's a lot of money on the pro side.

A report by Wendell Cox released today by the Heritage Foundation echoes some of the themes the Eastsiders have been sounding for years. But to say transit's not the solution is not to say that transit's not part of the solution. So, we get to the unexciting compromise, which just might be the only answer.

Rich Roesler's Spokesman-Review blog points to new pro roads-and-transit ads today.

UPDATE Bad link to Cox's report fixed.

100th Anniversary of UPS Celebrated in Brunell Column

Don's column in the Columbian celebrates another of Washington's entrepreneurial pioneers, Jim Casey, a founder of United Parcel Service.

Here's Don:

Most people don't realize Jim Casey started what is now the Microsoft of package shipping, United Parcel Service, a 100-y ear-old company employing 427,000 workers in more than 200 countries worldwide.

Casey was just 19 years old in 1907 when he partnered with Claude Ryan and borrowed $100 to start a delivery company headquartered in Seattle's Pioneer Square.

Over the next century, UPS transformed the way the world does business,

he company that made "Brown" a household word is now a $42.6-­billion business with its iconic brown delivery trucks and drivers clad in brown uniforms.

By going head-to-head with postal services around the world, UPS forced those government monopolies to be competitive. Many were heavily subsidized by taxpayers, and the United States was no different. Our Congress had committees in both houses that oversaw postal operations and often propped up the postal service with government subsidies. The mail delivery system was inefficient, and many were convinced there was no profit in delivering packages and letters.

UPS proved that when there is competition, innovation flourishes and money could be made.

It's a good column and a timely reminder of the power of entrepreneurial vision realized in a free market system.

Tolls for 520 Bridge - And a Whole Lot More

The U.S. Department of Transportation wants the state to put tolls on the SR-520 bridge. Here's USDOT's short press release naming Seattle and four other cities as grant recipients. Transportation Secretary Mary E. Peters makes her thinking clear.

“Many politicians treat tolls and congestion pricing as taboo, but leaders in these communities understand that commuters want solutions that work,” Secretary Peters said.

Tolls, never popular, are nonetheless inevitable. That's the focus of my column today.

The Seattle PI has a good roundup of state-regional responses to USDOT's announcement. Everyone seems delighted. Of course, we may see more of this.

Crosscut Looks at Tolling

With a vote on regional transportation in the offing, this Crosscut series on tolling ought to attract considerable attention in the Puget Sound area. (The link takes you to the home page, which features the series under the heading "No Exit: Pay Toll Ahead.)

Paying More to Drive - Get Used to It!

People better get used to paying higher tolls. They are on the East Coast. People in Washington would go as far as saying New Yorkers pay through their teeth.  They do take a bite out of your pocketbook.

Whenever I'm on the East Coast or in Texas, I make sure I have dollars and quarters.  In New York, Philly and Baltimore, I make sure it is at least a $20 bill. For example, if you drive the interstate between Baltimore and Philadelphia, you'll fork over more than $2O in tolls. They are preparing to pay even more as they rebuild and widen the interstate.

 

Over the weekend in New York City, we took a cab from Bronx to the Queens.  The cabbie stopped at the toll bridge and he handed the attendant a $5 bill and got fifty cents back.  I asked:  "Isn't that toll a little high?"  He said, New Jersey and New York are getting ready to double the tolls to cross over and under the Hudson River to replace inadequate and aging bridges and tunnels.  He said some are talking about doubling the fees, which would mean commuters would pay $12 to go between Jersey and Manhattan. Finally, he said the cab and limo companies are switching to more fuel efficient cars with gas hovering at $3.50 a gallon  in the City.  Even with the higher gas prices, the driver said, government is running farther behind on gas tax collections.  Fuel efficient cars mean less gas taxes collected even though there are more cars on the roads and highways.  It is a Catch 22.

 

When I told him people in Seattle and Tacoma had sticker shock from the new $3 Tacoma Narrows Bridge toll and tolls that could be $5 or $6 to cross Lake Washington, he laughed and answered "get used to it!" 
Incidentally, the tolls on the East Coast don't come off once the construction bonds are retired.  They are permanent.

Catching Up

Just a few days left before the curtain falls on the 2007 legislative session. Last minute stuff is happening.

The Seattle Times makes the case for phasing out gainsharing.

It looks like voters will get a chance to decide on a Constitutionally-protected rainy day fund.

And a Sonics departure seems highly likely.

There's still not enough money for the 520 bridge.

And, while your waiting to cross the bridge, don't use a hand held cell phone.

Treasurer Talks Tolls

Sunday's PI headlined  State Treasurer Michael Murphy's conclusion that for the SR 520 numbers to work, tolls would have to be imposed on I-90 as well.

State Treasurer Michael Murphy rejects the finance plan for the proposed rebuilding of the Evergreen Point Bridge and won't bankroll the project unless lawmakers levy tolls on the Interstate 90 crossing as well as the new bridge.

His thoughts on this are not trivial, as he's the guy who would authorize any bond sale.

State Treasurer Michael Murphy rejects the finance plan for the proposed rebuilding of the Evergreen Point Bridge and won't bankroll the project unless lawmakers levy tolls on the Interstate 90 crossing as well as the new bridge.

Today, the PI editorial board wades in.

State Treasurer Michael Murphy is absolutely correct to say the state doesn't have nearly enough money budgeted to replace the Evergreen Point Floating Bridge.

But they don't appear to be endorsing the twin tolls. Instead, they ... well, I'm not sure.

... sooner or later, we, as a region, must resolve our transportation philosophical differences before we prioritize projects (and the funding plans). The fact is we can't have it all; we need to make difficult choices.

First, this conversation has to get beyond "more." ... if we cannot afford more pavement, the alternative is a regional strategy that promotes smarter and more effective ways to move people and goods.

That's all they wrote.

Viaduct Controversy Hits the Economist

A nasty report in the venerable Economist. No one looks good.

Seattle's tunnel has become a trip to political hell. All aboard.

Tough audience.

Lobby Lunch Podcast - Transportation

A great lobby lunch discussion Thursday on Transportation. Guests were Senators Mary Margaret Haugen and Dan Swecker and Representatives Fred Jarrett and Judy Clibborn. All but Sen. Haugen were able to join us for the podcast discussion.

Nickels Channeling Reagan?

Who'd have thought it?

The Times this morning reports on the latest chapter in the never ending saga that is the Seattle tunnel/viaduct controversy. This jumps out:

Nickels said a new elevated freeway would create a wall between Seattle and its waterfront.

He said his message to Gregoire is "tear down this wall."

Echoing this, of course, but perhaps it's really more like this.

The P-I reports that we're down to only one viable proposal, and it's not Nickels's tunnel.

The state Department of Transportation on Tuesday rejected a four-lane tunnel, one of the two Alaskan Way Viaduct replacement options voters would pick from in a March advisory vote, saying it would be unsafe and couldn't handle traffic adequately.

Now the election itself could be doomed.

Gov. Chris Gregoire, who had been skeptical of the new tunnel option, said Tuesday that the state DOT's findings show "it is clear that the electorate in Seattle will be presented a ballot with only one option that works."

"Today, we need to move forward with the one option that meets safety standards and is fiscally responsible: the elevated structure," she said in a written statement.

Somehow, I doubt it's over just yet.

Viaduct v. Tunnel

For those who can't get enough of the Seattle tunnel versus viaduct controversy, yesterday's Seattle Times story by David Postman and Andrew Garber will make a fascinating read.

But don't stop there. Postman's blog has additional info.

This Looks Like a Bad Idea

State Sen. Mary Margaret Haugen has proposed a tax on shipping containers. The News Tribune has the story. The senator has a well-deserved reputation as a champion of adequate infrastructure financing, but this is the wrong approach.

Here's the text of an e-mail to Alaska retailers that AWB president Don Brunell received from his Alaska counterpart, Wayne Stevens.

To all Alaska Retailers,

The State of Washington is considering a container fee for all containers coming in and going out of the State of Washington. The fee is $50 per 20 foot equivalent container. Most of the containers our customers use are 40 footers so the fee would be $100 per container. The fee would be for both inbound and outbound and therefore would be $200 per container for a round trip. Your shipping companies would have to pass these fees on to you.
I would urge you to contact your new governor, Sarah Palin. Urge Governor Palin to contact Washington Governor, Christine Gregoire, and let her know the impact it will have on your bottom lines and cost of goods to your consumers. We will be contacting our state representatives as well to try to defeat this bill.

AWB opposes this legislation, as do Puget Sound port officials and others concerned with the state's competitive position in international trade.

More on the Rising Cost of Procrastination

 We're all familiar with the cost of delay. With big highway projects, small percentage increases often amount to millions of dollars. A 24 percent increase, (see update below) however, hits the threshold requiring substantial change in existing plans. The Seattle Times explains what happened:

Cement prices spiked. Steel prices rose, largely because of competition from new skyscrapers and roads in China. A flurry of megaprojects, and the post-hurricane reconstruction of New Orleans, triggered a labor shortage that may continue for years.

The Washington State Department of Transportation recently substituted a more-realistic inflation rate of about 3.5 percent for its previous figure of about 2.4 percent, which outside experts had challenged as too low.

The new figures account for more environmental work, notably at Highway 2 in Everett, where road trestles cross the wetlands of Ebey Island, and at the new "Cross-Base Highway" in Pierce County.

Many projects on the books will be scaled back, some dramatically. More votes on transportation finance are planned for this year.

MORE: The P-I has an op-ed today that helps explain why so little gets done quickly.

Gregoire had an opportunity to refute the freeway-building mantra by demanding a more fiscally and environmentally sound strategy for moving people through downtown. She could have put the public's health ahead of politics and told us the truth: Highways have fouled and impoverished this country's urban environments, choked Puget Sound with pollution and bankrupted government.

How refreshing had she met the assertion by the state Department of Transportation that demand for automobile capacity will continue to increase with this challenge: "We can't afford more highway lanes. They're burdening taxpayers and poisoning the planet. You transportation experts, tell me how to reduce car trips."

And why we're waiting, costs and congestion increase and commerce leaves.

UPDATE: The Times corrected a math error this morning (1/3/07). The news is worse than we thought:

Projected costs for major projects have risen 31 percent above earlier estimates, not 24 percent as reported in the paper.

No cheap shots about the WASL math test here. This stuff happens. A 24% boost in costs was bad enough. But 31 percent! Astonishing.

MORE: The News Tribune reported last month on the impact in Pierce County. It's the same story - higher costs and extended completion dates - but I had missed this:

Blame China, state transportation planners say.

The surging price of oil and steel account for part of the higher cost estimates, and many economists point to China’s rapid development and thirst for both materials as a big factor in driving up those commodity prices. For Washington, that means higher prices for asphalt and all the steel components that are used to build bridges and freeway overpasses.

Another globalization challenge.

Still More on Viaduct v.Tunnel

I'm going to need a new label for this. There's going to be much more on the viaduct v. tunnel debate over the next few months. Today The Seattle Times reports that some Seattle City Council members are balking at the public vote proposed by Gov. Gregoire. They say, among other things, the advisory vote might not be decisive. And leaders of the Downtown Seattle Association and Seattle Chamber of Commerce, both supporters of the tunnel, agree.

The governor wanted a vote by April.

Times editorial writer Joni Balter coins a new verb to express her frustration with the way too many issues hit the ballots before voters get good information.

The last thing anyone in Seattle wants is another beautiful idea, oversold, under-explained and started without enough money to finish the job. Pursue your tunnel, mayor and council, but do it straight up with facts and clear information about where the money will come from, who will pay and for how long.

Don't monorail us.

At the P-I, opinion columnist Ted Van Dyk takes the governor to task for calling for a vote.

I was disappointed last week when Gov. Chris Gregoire took a duck-and-cover posture on replacement of the Alaskan Way Viaduct and bucked the matter to voters. She appears to have contracted Olympia Disease, the symptoms of which are chronic spinal weakness among politicians facing political risk. Gregoire and Nickels went eyeball-to-eyeball on the viaduct issue. Gregoire blinked. Her non-decision will make future transportation decisions more difficult.

That's too harsh. I'm with those who call it a pragmatic punt.