It's no secret that Boeing, for the first time, is considering building a new commercial jetliner, the 7E7, in another state. The 7E7 represents the next generation in airplane technology and is designed to meet the evolving needs of airline travelers for years to come. The state Boeing chooses will be rewarded with more than 4,000 direct jobs, plus thousands more generated by new economic activity.
In recent weeks a number of editorials by policymakers, business leaders and labor representatives have expressed differing views on how to make Washington a more attractive place for Boeing to do business. Governor Locke went so far as to ask the legislature to consider Boeing's needs during the ongoing special session. While the focus on Boeing is necessary, the policy debate is too narrow. Boeing's local manufacturing facilities continue to be a vital part of our economy, although their share of total employment has declined.
Entire new industries have grown out of Microsoft, Amazon, Starbucks and the University of Washington's highly regarded research programs. Individual entrepreneurs have developed new, successful products, and the general small business community has grown substantially, now totaling nearly 200,000 firms across the state. Much of this growth has been aided by Boeing's practice of outsourcing large parts of its production to small, flexible and efficient local businesses.
Yet it is small businesses that are hardest hit by the tax and regulatory policies of state and local governments. Costly and time consuming permitting processes, burdensome environmental regulations, staggering traffic congestion and an amazingly complex tax system (state and local governments levy more than 119 different taxes) add substantially to the cost of doing business in Washington state. The local businesses on which Boeing now relies are struggling to continue providing the high service levels and low cost the company requires.
Boeing's suppliers are just a sampling of the small businesses in every sector of the economy that are struggling to make ends meet. Results from Washington Policy Center's Small Business Project highlight the ways state and local governments work daily against business success.
In Seattle, for example, the City Council recently passed a rule that puts most small dumpster haulers out of business. City law now requires all construction and re-modeling debris to be carried away by one or two national companies, often at a much higher cost. In Kennewick, one electrical contractor reported he needs 29 separate licenses just to do business legally in that city. Similarly, a homebuilder in Pierce County said in some cases he must get 21 different permits, licenses and assessments before he can break ground on one new single-family home.
Improving our business climate should not be difficult. The research is complete and the facts are clear. For Washington businesses to succeed, including Boeing, our state needs comprehensive tax and regulatory reform, a clear and efficient transportation plan and health care and education policies that meet the needs of our growing economy. Some examples of these reforms include:
- Enact meaningful reductions in regulations, including elimination of the state's expensive new ergonomics rules, updating the state's shorelines regulations and an honest review of how the State Environmental Protection Act (SEPA) hurts small and growing businesses.
- Revitalize the health care market to allow the sale of basic health insurance, place a cap on soaring medical malpractice costs and impose a moratorium on costly new health insurance mandates.
- Let the Department of Transportation do one-stop permitting to cut red tape and speed up road projects, and make local, state and federal regulators coordinate so they are no longer working against each other.
- Improve the attitude of state employees by applying a new focus on customer service, particularly in agencies that control industrial and environmental permitting.
The business climate debate is bigger than Boeing and more important that targeted, short-term policy changes. State policymakers should enact practical, enduring reforms that open our state to new investment and new jobs, jumpstart the stalled economy and encourage business people who are willing to take risks. That is the best way to show Boeing that Washington is the right place to build the 7E7.
