Last summer, state Dept. of Commerce director Rogers Weed listened to members of a Southwest Washington business community still struggling through a protracted economic recession.
Last week, Weed returned to the region in the hopes of convincing many of the same business leaders that the state had the tools to both balance the budget and propel Washington's economy into a full-fledged recovery.
Appearing as the featured guest at Washington State University Vancouver's Chancellor's Seminar Series on Jan. 15, Weed made the case for a mix of business tax credit proposals aimed at getting firms to increase orders, jump-start stalled development projects and most pressingly, to hire more workers.
The proposals – outlined by Gov. Chris Gregoire (D-Wash.) in last week's state of the state address – include a Business and Occupation tax credit for small businesses to hire new employees, as well as another B&O credit for construction projects deemed to be of "statewide interest" by the Dept. of Commerce. Weed also touted the state's proposed increased investment in energy-efficient retrofits of existing buildings.
The main goal of the measures was to combat one sobering statistic: 154,000 – the number of jobs lost across Washington state since September 2008.
According to Weed, if passed by the state legislature, the tax credit and efficient energy investment proposals could create as many as 40,000 jobs statewide.
But Carl Gipson, small business director at the Washington Policy Center in Seattle, doubted the Gregoire administration's job-creation measures would hit that target. "I think it will be analogous to President Obama's stimulus package, with people searching for the jobs created," Gipson said.
While Gipson saw the B&O tax credit proposals as a positive development for hard-hit small businesses in the state, he pointed to the rising cost of unemployment and workers compensation insurance as a continuing barrier to true economic recovery for many companies.
In the past year, workers compensation rates on average rose 7.6 percent across the state, while unemployment insurance jumped 54 percent due to a flood of jobless benefit claims, Gipson said.
According to Columbia River Economic Development Council president Bart Phillips, though Weed failed to follow-through on many of the suggestions made by the region's business community during his listening tour last summer, the tax credit and energy-efficiency measures were a step in the right direction. "It's about bringing back jobs quicker," Phillips said. "And as a package, I think it delivers."
A former executive at Microsoft Corp., Weed took over the department last March, leading the agency in a time of rising healthcare costs and an eroding business tax base, which have resulted in a projected $2.6 billion deficit in the state budget.
To help raise badly-needed revenue, Weed floated several new tax proposals, including a levy on out-of-state firms doing business in Washington, such as credit-card issuers.
As for economic issues specific to Southwest Washington, the Commerce director mostly deferred to the CREDC – an arrangement Phillips, who was in attendance at last week's event, seemed more than comfortable with.
"Like it or not, it's our job to know the regional economy and to let them know what we need," he said.
