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Vestal: Contrary to rhetoric, business can boom in Washington

Shawn Vestal
Shawn Vestal

Hold on a second: Is Washington good for business?

I don’t mean not bad, but actually good? Not unfriendly? Not hostile?

The United States Chamber of Commerce, in a new national report, repeatedly places Washington in the top 10 of economic measures: long-term job growth, short-term job growth, economic output per job, productivity growth, median family income, export “intensity,” science and technology job growth and … business tax climate.

Whoa. Washington ranks sixth overall, out of all 50 states, for the best business tax climate. Washington is also sixth on the chamber’s Business Policy Index, a metric that combines 46 separate measures of government-imposed or government-related business cost measures.

Both of these are improved from the 2012 report.

In other words, according to the biggest business advocacy group there is, Washington is relatively good for business and getting better.

Friendlier.

Idaho is 31st, if you’re wondering.

Is this what you’d think, listening to the politicians who talk the most about business and government? Might you be under the impression that we are actually horrible for business here in Washington state? Might you come to the conclusion that our business climate is not unlike that of, say, Mars – a rocky, stifling environment where nothing grows?

Obviously, the unwavering insistence on the state’s “poor business climate” is a self-serving narrative of a powerful political constituency. You can’t continually fight off the closure of tax loopholes, for example, if you don’t cry wolf, and the crying of wolf – regarding Washington’s business climate – never really changes with the circumstances.

A few high-profile examples serve this narrative. Around here, we’ve got Cabela’s and Buck Knives – they went to Idaho, you know. Statewide, nothing trumps Boeing and the losses the state has suffered as that company has moved operations elsewhere.

These examples are bad individual cases, for sure. But the naysayers say they are more: signs of our oppressive business climate.

Sen. Mike Hewitt, a Walla Walla Republican, hit the main notes of this song in a recent op-ed piece published in the Seattle Times about Boeing’s decision to move some jobs elsewhere: “Moving jobs is a continuation of the company’s steady migration out of Washington state and the latest in a series of wake-up calls that demonstrate an urgent need for lawmakers to improve our state’s business climate.”

Hewitt also wrote: “I don’t know that the sky is falling quite yet, but make no mistake: If action isn’t taken, we will see jobs like these continue flying off into the horizon. The governor’s response to this crisis, like his predecessor’s, is simply not adequate. … Boeing’s announcement is only a symptom of what’s wrong with Washington’s business climate. What’s needed is not action taken to appease one company. We need to make our state a desirable destination for all businesses.”

Hewitt’s main argument there was in favor of reforming some workers’ comp and unemployment-insurance provisions. But it’s impossible to ignore the dire tone – the sky isn’t quite falling yet – and it’s a more or less constant one from his quarter.

Odd that the U.S. Chamber – that relentless foe of taxation and regulation – doesn’t concur.

This isn’t the first time that Washington’s business-friendliness has made a strong showing. In 2011, the Small Business and Entrepreneur Council ranked Washington fifth for its business climate for small businesses. The Tax Foundation has ranked Washington sixth for the best overall tax climate for businesses for the past two years. That’s improved over 2011, when we were 11th.

Somehow, those who speak for the business community in politics never see it this way. They deny this climate change. Those folks are more or less relentlessly negative about the business climate: Government is overtaxing, over-regulating, positively killing business in this state. If the business climate is not repaired, usually with an immediate, urgent reduction or prevention of any tax, then jobs will flee for a friendlier climate.

Except that, well, look what the Chamber of Commerce says:

Washington’s short-term and long-term job growth has been in the top 10 in the nation – eighth and ninth, respectively. We’re ninth in economic output per job, ninth in adjusted median family income and eighth in productivity growth. Our “business birthrate” – the rate of business startups – is 11th in the nation and more than double the national average. As noted, we’re sixth in business tax climate.

Meanwhile, our overall tax burden is utterly, absolutely, exactly average: We pay, overall, 9.3 percent of our income in state and local taxes, which is the national mean, according to the report.

It ain’t all sunshine, of course. For a lot of people everywhere, the economy has been lousy – regardless of Washington’s relative position within it. And Washington has its definite weak spots. We’re 32nd in producing college degrees, 29th in cost per degree, 26th in college affordability, 30th in bridge quality  …

Which is to say nothing of poverty, of which the report says nothing, and of which we have, particularly here in Spokane, both short-term and long-term problems.

Still, we can take some comfort in the chamber report. Comfort about the climate for business. Perhaps – just possibly – it is not nearly as bad as advertised.

Don’t take my word for it. Just listen to the United States Chamber of Commerce – the largest business organization in the world.

Shawn Vestal can be reached at (509) 459-5431 or shawnv@spokesman.com. Follow him on Twitter at @vestal13.


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