Dear Neighbors,
I’m currently in Chicago for a youth violence summit after finishing up a busy week in Olympia for our fall Assembly Days. One of the hot topics in the committee that I chair, the Senate Labor, Commerce & Consumer Protection Committee, was the proposed workers’ compensation rate increase. Misinformation is beginning to circulate about this rate increase, and I want to make it very clear this increase does not suggest that our worker comp program is mismanaged or inefficient. In fact, the Oregon Department of Consumer and Business Services’ widely cited comparison of the most costly workers’ compensation systems ranks Washington 38th. And workers here pay about 25 percent of those premiums, meaning that only four states have lower costs for employers.
The national recession has done about $1 billion worth of damage to the workers’ compensation trust fund. Investments have suffered, unemployment has increased, and work hours have been reduced. Ultimately, workers and employers are paying less to support the system. Meanwhile, the health-care cost of treating injured workers is growing by about 8.5 percent a year. That’s why the state just announced a proposed 7.6 percent premium increase for 2010. If approved following a series of public hearings, the increase would raise an additional $117 million to keep the system solvent.
The second-best state for business in the country
Two national entities recognized Washington’s strong business climate last week. First, The Tax Foundation ranked us the ninth friendliest state in which to do business, up from 12th place the year before. Then Forbes.com ranked us the second best state for business in the country, behind only Virginia and up from third place the year before.
The Tax Foundation describes its 2010 State Business Tax Climate Index as “a tool for lawmakers, businesses and individuals alike to gauge how their states' tax systems compare.” The Forbes rankings measure, among other things, the cost of doing business in each state; labor supply; regulatory environment; current economic climate; energy costs; taxes; growth prospects; and quality of life. According to Forbes.com, a key component among top-ranked states is an expanding, educated work force — a prime focus of the Senate’s Higher Education and Economic Development, Trade & Innovation committees in recent years.
These rankings confirm something we’ve worked hard in the Legislature to establish: Our state is a great place to do business and is only getting better. What’s more, these two rankings are consistent with rankings our state has received in the past 12 months from numerous other independent associations that rate states on business-focused measures:
§ U.S. News & World Report’s “7 Best States to Start a Business” in 2009, ranks us first.
§ The Kauffman Foundation’s 2008 State New Economy Index rates our state second in the nation.
§ The 2008 State Competitiveness Report from the Beacon Hill Institute at Suffolk University rates sixth in the country in ability to “attract and retain businesses and to provide a high standard of living for its residents in the long run.”
§ Even when you look just at taxes and nothing else, we stack up well. The Small Business & Entrepreneurship Council’s 2009 Business Tax Index rates our state fourth best in the country.
Do these ratings mean our economic problems will vanish overnight? No — we’re still dealing with the effects of an international recession that has entire countries on the ropes. But as our nation and our state begin the slow process of economic recovery, our state’s positive business climate positions us to recover faster than others. And that’s good news for everyone in Washington.
November economic forecast will be key
According to the state Economic Forecast Council, our state’s economic trajectory is playing out pretty much as predicted earlier this year. The latest indicators suggest we are bottoming out and include some possible signs of recovery. Those signs are incremental and don’t begin to appear until the tail end of the quarter, so we can’t be sure they represent a trend until we see the next quarter’s results. That makes the November forecast pivotal. If we are in the beginnings of economic recovery, November’s forecast will confirm it.
The path to recovery is expected to be steady but gradual. First, consumers will need to feel confident enough to resume spending. Then, as their spending increases, revenues will begin to go back up. Finally, as revenues rise and demand increases, employment should rise as well.
Upcoming public meeting on health care reform
The details of the health care town hall I wrote about last week have been confirmed. I do hope you join Reps. Mary Lou Dickerson and Reuven Carlyle and myself for a town hall with Sen. Karen Keiser, chair of the Senate Health & Long-Term Care Committee, and Rep. Eileen Cody, chair of the House Health Care & Wellness Committee. Keiser and Cody will address questions about health care issues and discuss how federal health reform efforts could impact Washington residents.
The town hall will be held at the Ballard Swedish Medical Center, Room A on the 1st Floor from 7-9 p.m. Oct. 27. The Ballard Swedish is at 5300 Tallman Ave.
Tour the waterfront portion of the bored tunnel
Reps. Carlyle and Dickerson and I invite you to join WSDOT’s Ron Paananen and SDOT’s Bob Powers for a special walk through and work session regarding the waterfront portion of the SR 99 bored tunnel project. The walk-through will occur Friday, Oct. 9th from 2:00 – 4:00 p.m. The tour will begin at Rep. Carlyle’s and my new district office in the Northwest Work Lofts at 3131 Western Ave, Ste. 421.
There is limited space, so please RSVP to Rep. Dickerson’s assistant Melissa Bailey at bailey.melissa@leg.wa.gov or 206-545-6513.
As always, it’s my pleasure to serve you. Please don’t hesitate to contact me if I can be of any help.
Warmly,
