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Chair's Corner: The Challenges Ahead |
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Written On: September/October 2006 |
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Written By: by Creigh H. Agnew - Chair, Board of Directors |
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As my time as AWB chair draws to a close, I have been reflecting on our organization and the important work it does in support of businesses and improving the competitiveness climate in Washington. I want to thank Don Brunell and his great staff for their tireless efforts on our behalf. At Weyerhaeuser, we value the long relationship our company has had with AWB. As their oldest member, we are proud of this organization and what it has accomplished over the past 102 years.
AWB started as an organization of private-sector employers banding together to promote policies that would create jobs and economic activity. Through the years, one of our focuses has been to fund essential government services through growth in tax revenue from the private sector. We want our economic growth — not tax increases — to pay for education, police and fire protection, and other essential government services.
In the last couple of years, we have been successful in preventing increases in the B&O, general sales and property taxes, and were able to work with the governor and Legislature to provide tax incentives for manufacturing. For example, last year, thanks to Sen. Mark Doumit, D-Cathlamet; Rep. Lynn Kessler, D-Hoquiam; and many other legislators, Gov. Gregoire signed into law incentives to revitalize the forest products industry. It produced immediate results as Boise Cascade LLC announced a $72 million expansion of its Wallula mill near Pasco.
Looking ahead, lawmakers face serious revenue challenges in 2007 as they address health care, pensions and funding for education. Between 2000 and 2006, state health care costs grew from $2.7 billion to $4.5 billion, which is 28 percent of the state budget.
Health care inflation is an issue for all of us. It is a vexing problem that has no simple solution. AWB is not only addressing the policy side, but also has an excellent small business health plan called HealthChoice. By aggregating small businesses to gain volume pricing, over 2,200 AWB members are providing health insurance for their employees. Interestingly, more than 40 percent of the employers on the HealthChoice plan did not offer insurance before joining. The key is to encourage the private sector to innovate and find solutions, rather than government simply mandating well-intentioned — but often misguided — solutions.
Making Washington a more competitive state is essential. Becoming more competitive requires us to think differently and come up with innovative solutions. For example, this year we were able to drive some needed reforms to our nation’s most costly unemployment insurance system. We made good progress on UI reforms in 2003, but those reforms were reversed in 2005. If the legislation that initially passed the state Senate had been signed into law, our UI system would have been even more expensive than it was before 2003. We needed to approach the issue differently. Hopefully, the reforms passed this year will continue to lower UI costs.
Looking forward, we need to focus on costs. Nowhere is that more evident than with energy. Energy-intensive industries, such as aluminum, forest products, aerospace, irrigated agriculture, food processing, and semi-conductor manufacturing, depend on reliable, reasonably-priced electricity.
Increasingly, we recognize the need to develop an array of new energy sources. Solar, wind, tidal and biomass generation needs to be part of the energy mix, but we also need power from traditional sources such as wood wastes, hydro, coal, gas and nuclear. Fortunately, while the technology for alternatives is developing, so is clean coal and safer nuclear energy. No simple solutions exist to our energy situation, and we need to look to conservation, energy reduction, and new generation from the most economical and reliable sources.
Thank you for a great year. It has been a rewarding experience to chair such a wonderful organization and I hope that you, like me, will remain involved at AWB. Together, we can make the difference for our state, our children and our grandchildren.
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