Is the Governor listening? Boeing's concerns extend far beyond transportation

By Jason Mercier, Evergreen Freedom Foundation

While forcing the state’s largest employer to flee Washington will help alleviate our transportation gridlock, it is not the recommended way for Governor Locke to fulfill his promise of making transportation his top priority.

Consider the emphatic plea of Boeing CEO Alan Mulally attempting to get the attention of the House Labor Committee and Governor Locke during his testimony on January 16, 2002, regarding the state’s anti-business climate.

"In every one of these categories, those top six, the state of Washington was not competitive . . . in every one of those areas, the state of Washington is not competitive. Let me say it again. In every one of these areas the state of Washington is not competitive."

The top six areas Mulally was referring to are: transportation, taxes, energy, education, unemployment insurance, and regulations.

Resolving Washington’s anti-business climate is so important to Boeing, Mulally felt compelled to voice his frustrations with the state’s lack of business competitiveness three times in a row.

He also went out of his way to make sure the legislature and Governor understood that though transportation was a top concern of Boeing, it was not the catch-all of the state’s business climate problems.

Mulally made it quite clear that if the legislature and Governor stop their efforts at transportation, Boeing will head to a more competitive state.

"[I]f we can’t produce products and services and we can’t be competitive doing it, it’s ok, it should go to somewhere else. We believe in market-based economies. We believe in capitalism. We believe that the producer of products and services should go to the people that make products and services that people want around the world and they can do it more efficiently than some one else."

Translation: address the state’s anti-business climate or we’ll leave and take our jobs with us.

If the state’s largest employer is struggling to remain competitive in Washington, it isn’t hard to realize the fate of smaller businesses.

Now that the problems have been identified it’s time for the Governor to put his tough talk into action. There are common sense solutions in all six major areas referenced by Boeing:

• Transportation - Raising taxes will not unlock our state’s gridlock. Rather than pursue the tried-and-failed course of taxing citizens without providing accountability for funds, the Governor needs to allow DOT to look for cost savings while still providing the highest quality product to the taxpayer. This can be accomplished by taking these five steps: making the transportation budget process effective, allowing meaningful performance measures and performance audits, implementing cost savings, restructuring the DOT, and identifying alternative funding sources.

• Taxes - Washington’s B&O tax rates must be immediately reduced, sales taxes should not be levied against new plant construction, and property taxes must be lowered or the state will continue to face tax reform initiatives. The Governor must also reduce the size of government to maximize the potential of current tax revenue.

• Energy - Rather than focus only on conservation, the state must encourage production by addressing the current anti-business practices that deter companies from investing in increased energy production. If freed from excessive regulations, energy companies will be able to utilize five potential energy sources within the state: geothermal, increased hydro-power, landfill gas recovery, burning mixed wood, and nuclear.

• Education - Competition always spurs entities to produce the best product for the consumer. It is time we demand the same from our education system. Governor Locke should demand that all education dollars be tied to the student allowing the public schools to compete against each other not only for the student but the funds.

• Unemployment Insurance (UI) - Governor Locke should seek to end federal involvement in the UI program, allowing all UI funds collected from state businesses to stay in Washington. The program must be reformed to remove the current perverse incentives to remain unemployed that exist within the system. UI claimants should face vigorous accountability measures to demonstrate progress toward re-employment. Mulally stressed that Washington’s UI rates were the highest Boeing faced anywhere in the world.

• Regulations - Rather than allowing agency rules like the soon-to-be imposed ergonomic standards to add to the thousands of pages of regulations businesses face, the Governor should use his executive order power and eliminate regulations that fail to pass the "common sense test." All agency rules should also be subject to a sunset review. Washington needs to stop bleeding businesses to death by a thousand paper cuts.

The Governor has a choice: He can seriously address these problems and take action, or he can just keep talking about them. Likewise, businesses like Boeing have a choice: They can continue to provide jobs and services in Washington, or they can move somewhere more competitive.

Jason Mercier is deputy communications director for the Olympia-based Evergreen Freedom Foundation. He can be reached at (360) 956-3482 or jmercier@effwa.org

Business Matters - A ten-part series on resolving Washington's anti-business climate

Evergreen Freedom Foundation P.O. Box 552, Olympia, WA 98507 Phone: (360) 956-3482, Fax: (360) 352-1874 Email: effwa@effwa.org