2002 Policy Agenda

Signs of Washington State’s deteriorating business climate are everywhere. Corporate headquarters have been lost through mergers, acquisitions and departures. Employers large and small have announced substantial layoffs, while others have decided to focus job growth elsewhere. Business people are aggressively responding to their cost structures and asking questions like “Can we survive here? Is this a good place to make investments? Is the state committed to a competitive business climate?” In the current environment, quick fixes and symbolic gestures are not going to convince many that Washington State is serious about addressing the issues necessary to improve its business climate. The Washington Roundtable calls on state policymakers over the next twelve months to demonstrate their commitment by:

• Addressing the State’s Failing Transportation Infrastructure
• Resolving the State Fiscal Crisis Without Further Eroding the Business Climate
• Maintaining the Commitment to Higher Academic Standards
  

Address State’s Failing Transportation Infrastructure

Solving our transportation problems is the most important economic stimulus action the state can take in the next 12 months. The negative economic impacts caused by the inability to move people and products are obvious. While we recognize the state’s current fiscal dilemma, action must be taken in 2002. At a minimum the legislature should:

• Commit additional revenues to fund statewide transportation infrastructure investments.
• Create regional authorities to provide areas with the greatest transportation needs the ability to develop local solutions
• Strengthen and expand accountability measures to ensure investments deliver promised results.

Resolve State Fiscal Crisis Without Further Eroding the Business Climate

The downturn in the state economy has exacerbated an already precarious fiscal situation resulting from voter initiatives that have reduced revenues and increased spending obligations, as well as the adoption of a 2001-03 biennial budget with significantly greater appropriations than projected revenues. The quicker actions are taken to address this crisis, the more effective they will be. We urge the following steps:

• Take action now to arrest spending in targeted programs so that immediate savings can be achieved.
• Convene “five corner” meetings and develop a bipartisan plan to restore budget sustainability and replenish an adequate reserve fund by the end of the 2003-05 biennium.
• Avoid actions that increase the cost of doing business in Washington or otherwise harm the state’s economic competitiveness, including any increase in the proportion of total state taxes paid by businesses, which is already very high relative to other western states.
• Make fundamental changes in the way government operates, including:
• Eliminating the practice of “earmarking” funds at both the state and local levels to give policymakers greater flexibility; and
• Establishing more efficient means for the delivery of services.
• Communicate economic, revenue and budgetary information in a timely, understandable fashion.

Maintain Commitment to High Academic Standards

Healthy public schools are critical to the development of an educated citizenry. As a result of Washington’s standards-based reforms, important strides have been made to ensure that students are learning important skills and knowledge they will need to participate in our democracy and successfully pursue career or postsecondary education opportunities after high school. However, much more work needs to be done. Critical next steps include:

• Developing a rigorous, orderly process to implement the certificate of mastery graduation requirement in 2008 that includes: (1) additional student incentives to achieve the certificate, such as scholarships and postsecondary education admissions requirements; (2) access to appropriate additional learning opportunities for those who do not meet all of the certificate requirements in the 10th grade; (3) multiple opportunities for students to retake the 10th grade WASL; and (4) alternative assessment methods for students in special circumstances to demonstrate their knowledge of the 10th grade standards.
• Building the state’s capacity to assist chronically low performing schools with the funds appropriated last year as a first step toward a comprehensive accountability system.
• Providing leadership opportunities for teachers by adding elements of increased responsibility and performance incentives to their compensation system, including significant salary increases for teachers who receive National Board Certification.

OTHER STEPS CRITICAL TO COMPETITIVENESS

Create a Positive Regulatory Culture. Members of the Governor’s Competitiveness Council have identified Washington’s regulatory environment as a major inhibitor of competitiveness and employment growth. The Roundtable believes that the state’s regulatory approach must be more collaborative and solution-oriented. State officials and regulators must recognize that “one size fits all” regulatory approaches are ineffective and inadequate, take the lead to resolve conflicting standards between federal, state and local standards, and establish time-certain standards for permitting processes.

Use Performance Benchmarks. The Washington Roundtable maintains its long-held belief that policymakers should use benchmarks and service indicators to drive the performance of state government. We urge state agencies to establish performance indicators aligned with state level benchmarks and state policymakers to utilize such information to guide decision-making.

Protect State’s Higher Education Investment and Delegate Greater Management Flexibility to Institutions. An effective and adaptable higher education system is one of the most critical factors affecting Washington State’s ability to compete in an international, knowledge-based economy. The Roundtable urges policymakers to maintain the state’s investment in this critical resource, despite challenging economic conditions. In turn, our higher education institutions must respond and adapt to changing circumstances, and the Roundtable recommends delegation of significantly increased management flexibility to the institutions.

Address State’s Energy Needs. Washington State was fortunate to avoid a serious energy shortage this summer. While the immediate crisis has passed, it is clear the state still needs additional energy generation capacity and accompanying infrastructure. The Roundtable recommends that policymakers update the state’s energy strategy to: (1) encourage new generation and transmission capacity as well as more efficient use of existing capacity; (2) provide the regulatory predictability and time certainty required for new investment; (3) encourage conservation and improved energy use management; and (4) protect the benefits of Northwest federal hydropower (BPA).