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Caldwell: Bigger in Texas? Maybe just its budget deficit

Sun., Oct. 31, 2010

Select Washington businesses got a letter this month from Texas Gov. Rick Perry, who like Idaho Gov. Butch Otter, aims to poach anyone disaffected by a possible state individual income tax.

Like the worst of hunters, Perry doesn’t know his target.

Why, for example, solicit the head of three Seattle-based seafood companies? Who lands a salmon catch in Galveston?

Does he fancy apple processors Stemelt and Treetop relocating to Amarillo? Or any one of several timber firms transplanting themselves to the Texas hill country?

And just how broad is the charter of the Columbia Community Credit Union in Vancouver?

In Spokane, Avista Corp. Chairman Scott Morris got that letter. So did the heads of Itron Inc., URM Stores Inc., Clearwater Paper Corp., and Sterling Financial Corp.

Not that Washington officials should be complacent. Most took the cure nine years ago, when Boeing Co. headquarters departed to Chicago.

But state Department of Commerce Director Rogers Weed says recruited companies, though prized, make an economic contribution dwarfed by home-grown businesses. Commerce is the state agency most responsible for supporting business development, and Gov. Chris Gregoire just put more on his plate.

In an executive order issued last week, she directed the department to nail down $20 million the state will receive to increase small business access to credit. Commerce must also expand its export initiatives, especially for farm commodities; figure out ways to consolidate business licensing materials to one online site; and just generally get out of the way unless public safety is compromised.

Other state departments got similar marching orders.

Will anything change? Stay tuned.

But no one had to tell the former Microsoft Corp. executive that Washington faces challenges. His own budget tells him so.

To cut costs associated with trade promotion, he says, state and federal officials are working on an agreement to co-locate offices. “That is really going to help us line up our priorities,” he says.

Government and business officials have been working to define what Washington does well, and how it can do it better. Aerospace is an obvious strength, clean energy another.

If more new planes are going to be made in Europe, Brazil, Canada and China instead of Everett and Renton, companies like Triumph Composites should be supplying components, he says.

Looking outside his own box, Weed wants Commerce at the table when education and transportation priorities are debated. Keep your infrastructure up, he says, and you remain competitive.

And that Perry letter?

Weed says Texas or Washington may be slightly higher or lower than the other in any given ranking of competitiveness. Texas state finances are considered the most sound in a new, generally bleak assessment of the 15 largest states by an analyst who foretold Wall Street’s meltdown. Washington tied for third.

But while Perry told the Washington executives Texas has a balanced two-year budget, at home he’s telling folks a looming deficit will not be as bad as the $20 billion projected in some estimates.

Perry not only doesn’t know his target, he may not know the range.

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