Business report gives Washington state high marks – Pardon me, but do "we suck?"

Despite Mulally’s comments, state actually ranks eighth in U.S. for entrepreneurship

Bert Caldwell
The Spokesman-Review

Pardon me, but do "we suck?"

Alan Mulally, the head of Boeing’s commercial airplanes division, says we do, and that’s a quote. His comment kind of sucked the breath out of the 400-plus Rotarians who heard it Wednesday in Seattle.

The "we" Mulally was referring to is Washington. Boeing has long made known its unhappiness with the state’s business climate, but never so graphically. This from a company that has already uprooted its headquarters to Chicago — home of Wrigley Field and AirSosa — and could get $3.8 billion in tax breaks should it decide to build the 7E7 at Everett or Moses Lake.

His comments also happen to coincide with the release of three reports on state and local business climate, notably the first-ever survey of sentiment among Spokane Regional Chamber of Commerce members.

The situation does not seem to be as black as Mulally suggests.

The most startling report in the bunch was released by the Small Business Survival Committee last month. Its "Small Business Survival Index 2003" ranks Washington’s environment for entrepreneurship 8th among all states, with South Dakota tops at No. 1 and Hawaii No. 50. (Question: Does this mean the islands get kicked off the island?)

Before shock from Washington’s performance knocks you over, the 20 factors used to calculate the rankings do not include any related to regulations and permitting. They do, however, include 11 different types of taxation, as well as worker compensation costs. Not surprisingly, Washington ranked next to last for state and local sales, gross receipt and excise taxes, and did poorly on worker’s comp, unemployment and gasoline taxes.

The highest minimum wage in the country did not help either, but the absence of any sort of income tax made up for a lot.

Also, with 5.13 full-time state and local workers per 100 residents, Washington ranks a surprising 8th-best for that category, one behind, if you can believe it, California.

For its part, Idaho ranked 29th overall, with its relatively high personal and corporate income tax rates exerting most of the drag. The state did lead in one category — health care costs.

For the most part, the results of the "2004 Competitiveness Redbook" published by the Washington Alliance for a Competitive Economy track those of the Survival Index.

Association of Washington Business President Don Brunell says members report some improvement in the regulatory environment and overall sensitivity to business concerns.

"The attitude to make us more competitive is very strong, very encouraging," he says.

But Brunell adds that he agrees with Mulally that a lot of work remains to be done. Somehow, he says, the state must pare some business costs to offset electricity rate increases that have eroded the advantage on energy costs Washington once enjoyed.

Finally, there is the just-released survey of Spokane Chamber members. Returns were supplemented with focus group discussions that included local government leaders. Just as well, because that is a group from which the business community expects a lot more.

Their most fervent wish; that government officials model civil and collaborative leadership. Where could they be coming from?

"In the last few years, it has been very difficult," Chamber president Rich Hadley says, stressing a truth often lost sight of: "We’re competing with the world, not each other."

Criticism of local permitting offices was muted, especially by those who have done business elsewhere, but there was a sense they must do more to compensate for the state’s regulatory burden.

"The city and the county have to be best of class," Hadley says, adding that local officials should become ambassadors to Olympia arguing the case for a more accommodating state business environment.

He says more training in how to deal with business as a customer, not an adversary, would help. So would benchmarks to help measure progress toward service excellence.

Hadley says the Chamber board will meet later this month to draft an action plan based on the survey results and recommendations.

One survey comment suggested a worthy objective; a community always riding a post-Hoopfest high, not a City Council meeting hangover.

As for Mulally’s comment, we don’t suck. We sip.

http://www.spokesmanreview.com/news-story.asp?date=101203&ID=s1423015&cat=section.business