Spokane will soon top North Idaho and most other places in the West as a magnet to manufacturers on the move.
Whether they are relocating or just expanding, this will be the place to go and to grow.
It will, that is, if Republicans go along with his proposal to exempt new investments in plant equipment from the state’s sales tax, contends Washington Gov. Mike Lowry.
But right now, opposition party leaders, who effectively control the Washington Legislature, are understandably preoccupied with executing their “Contract With Washington State,” which pledges property tax relief.
Also, in both parties, there are many whose top priority is a rollback of the 1993 surcharge on business and occupation (B&O;) taxes.
And since there isn’t enough money to go around, lawmakers will have to choose.
Lowry sees a broad but very shallow property tax rollback as merely grandstanding to the middle class, with little real economic benefit to anyone.
At a cost of $100 million to the state, this ballyhooed break would trim the tax on a $100,000 house a whopping $19 a year. So don’t spend too much celebrating a vastly over-advertised windfall.
Instead of this empty gesture to the middle class, Lowry argues that his proposed $140-million manufacturing tax incentive will produce the biggest economic bang for the buck by creating new family-wage jobs.
It appears the Democratic governor will receive a welcome boost from a key Republican leader, Jean Silver of Spokane, incoming chair of the powerful House Appropriations Committee (Check this).
“We want to help small business,” Silver said on behalf of Republicans, in a recent meeting with editors of The Spokesman-Review. “Businesses were really damaged last year by the B&O; surtax that went on, and by the other taxes that Lowry put on.
“Lowry and we (Republicans) want to exempt the manufacturers’ sales tax,” she said.
“And we (Republicans) want to get the other taxes off businesses - all the taxes that the governor put on last year.”
Most important to businesses on a broad front is a GOP commitment to cut B&O; taxes across the board.
At a press conference Thursday in Olympia, leaders of the House Republicans unveiled sector-by-sector rollbacks tallying $180 million.
Turning again to Lowry’s proposed sales tax exemption for new equipment, if enacted it will go into effect July 1.
And it will revolutionize corporate recruiting efforts in Washington, particularly in border communities such as Spokane, claims Len McComb, director of the State Department of Revenue.
McComb said a task force of business leaders and government analysts examined a dozen states in terms of their financial implications for manufacturers seeking a place to move or to expand.
From Spokane, Bill Williams of Telect, served on the task force, and his wife, Judy, attended all the meetings, said McComb.
“They felt this is a very significant improvement,” he said of Lowry’s proposed manufacturing sales-tax exemption.
“There are lots of other factors (in addition to taxes),” McComb acknowledged, mentioning a few - ports, transportation, wage rates, access to markets. But all these, he said, are “our strong points.”
However, he said, “In the area of financials, we are 10th out of 12.”
With Lowry’s proposed tax break, Spokane would zoom from third from the bottom to third from the top.
McComb said the incentive could be a key to attracting companies like Micron Inc. of Boise, which is scoping out sites for a billion-dollar-plus plant expansion.
However, in the case of Micron, Spokane is cooperating with Idaho in this particular recruiting effort. A plant next door on the I-90 corridor that provided thousands more high-paying jobs would be a giant plus for Spokane workers, who would commute en masse.
And, realistically, North Idaho would seem to enjoy an edge in this competition, being in Micron’s home state.
In Washington, the Tri-Cities and Lacey are contenders.