Breathing a sigh of relief – for now

Published 12:36 am Friday, October 3, 2008

With the Boeing Co. long-awaited decision to assemble the 7E7 in Everett, Washington state can breathe a sigh of relief – for now.

In truth, the battle is far from over.

Twenty-eight states across the nation competed for the 7E7 project, offering tax incentives, free land, better labor relations and a less burdensome regulatory environment. Those competitors are still out there and they – along with several foreign countries – are constantly trying to convince Boeing and other employers to move out of Washington.

The fact is, while the “Battle for Boeing” got all the publicity, the 7E7 competition is a metaphor for thousands of employers in our state who are being courted every day by competing states and countries promising a better business environment. Simply translated, they are offering lower operating costs.

In recent years, Gov. Locke and lawmakers have taken several steps in the right direction by holding the line on taxes, prioritizing expenditures, maintaining economic incentives and reforming our state’s costly unemployment insurance system. They wanted to send a message that Washington state “got it” and was serious about improving our business climate and providing jobs. Those reforms, along with an olive branch from Boeing union leaders, played a key role in Boeing’s decision to assemble the 7E7 in Washington.

Unfortunately, lobbying has already begun to turn back the clock, cancel the tax incentives and repeal the unemployment reforms.

Even if those efforts ultimately fail, calls for more regulations and higher taxes threaten the business-friendly image that the Association of Washington Business (AWB), Boeing unions, Gov. Locke and lawmakers worked so hard to build. Above all employers need certainty, and calls to repeal competitive incentives send a powerful message to current and potential employers that Washington state is still hostile territory.

According to the U.S. Labor Department, Washington has lost 20 percent of its manufacturing jobs since the summer of 2001 – the highest percent in the entire nation. In addition, our unemployment rate has been among the highest in the country over the last couple of years and our economic recovery lags behind the rest of the nation. To make matters worse, the Washington Research Council found that Washington state is the fifth most regulated state in the nation, putting us at a competitive disadvantage.

We can no longer afford business as usual. If we are to keep our current employers and attract new ones, legislators must look for new ways to improve Washington’s business climate.

The 2004 Legislature needs to approve the Competitiveness Council recommendations. The council’s reforms include streamlining regulations, changing liability insurance laws and reforming the state’s costly workers’ compensation system.

Yes, we should celebrate our victory in the “Battle for Boeing.” But the battle for Washington’s economic future has just begun.

Don C. Brunell is the president of the Association of Washington Business.