Spokane Journal of Business

Transportation to top session

Business groups also want more regulatory reform, tax-increment financing

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Discussions of how to rebuild crumbling roads and bridges, improve the transportation of freight around the state, and ease traffic congestion are expected to dominate the Washington Legislatures 1998 session.

Business groups say they will push for movement on the worsening problems.

I know transportation will be a big, big issue, says Don Brunell, president of the Association of Washington Business (AWB). Whether a solution can come together this session remains to be seen.

AWB and other business groups generally believe the state needs to invest more in its transportation system. The Spokane Area Chamber of Commerce includes comprehensive transportation funding enhancements among its primary objectives for the 1998 session.

Even the Washington state office of the National Federation of Independent Business (NFIB), which reports that increased transportation funding isnt a top-10 priority for its small-business members, says it will watch the issue closely and will promote funding alternatives that dont include tax increases.

The business groups are somewhat divided over the rest of the business agenda for the 1998 Legislature. Statewide, theyre promoting such things as more regulatory reforms, changes in the workers compensation system and Growth Management Act, and granting employers immunity from liability when providing references for former employees.

Closer to home, the chamber plans to urge approval of tax-increment financing, $1 million a year for research and development projects at the Spokane Intercollegiate Research & Technology Institute, and money for other projects here, such as a major expansion of the citys convention facilities downtown.

In general, the chamber is looking to promote measures that will help the community create 10,000 new jobs over the next five yearsthe much-publicized goal of Focus 21, Spokanes new economic-development effort, says Dan Kirschner, the chambers public affairs director.

The chamber believes its recent decision to contract for year-round lobbying services from Pacific Communication Strategies Inc., the Spokane lobbying firm owned in part by former state Rep. Todd Mielke, should boost its efforts during the 1998 session.

The intensity of our efforts is increasedjust having a presence over there (in Olympia) full time should increase our effectiveness, he says.

The chamber and other business groups say theyre keeping their agendas brief for this session, in part because legislators meet in a short 60-day session in 1998, which is a non-budget year in the states biennium and also is an election year. During budget years, the Legislature meets for 105 days.

By and large, the message Im getting is they want to get in and get out, Kirschner says, adding that lawmakers want a light session.No tax increasesThe transportation question, however, could mess up plans for a quick escape from Olympia. Gov. Gary Locke had been looking at a gas-tax increase to pay for additional transportation projects, but House Speaker Clyde Ballard and Senate Majority Leader Dan McDonald said Nov. 10 that Republicans wont consider a gas-tax increase in the next session. Republicans control both houses of the Legislature.

Carolyn Logue, NFIBs Washington state director, says NFIB members and many other residents cant stomach a tax increase when the state is expected to have extra money available in other areas.

We need to prioritize government spending, she asserts. Its hard to argue (for) a tax increase when theres an $800 million surplus.

Based on the latest budget projections, the state is expected to post an $861 million general-fund surplus for the 1997-99 biennium, says Richard Davis, president of the Seattle-based Washington Research Council, a nonprofit organization that researches public-policy issues.

The Legislature likely will keep some $500 million in reserves, leaving about $360 million of the surplus to play with during the 1998 session, he says.

General-fund spending can be increased only by about $185 million and still be kept under the spending limits set by Initiative 601, and Davis says he believes the Legislature wont hit that spending ceiling. I dont see a whole lot of enthusiasm for spending money from the general fund, he adds.

Therefore, its likely that the Legislature will consider shifting some money to the state transportation budget, which is separate from the general fund, to address transportation concerns, then perhaps look to provide some tax relief with the rest of the surplus that it doesnt earmark for reserves, Davis says.

One plan thats gaining favor includes diverting to transportation more of the money paid in through the motor vehicle excise tax, which motorists pay when they license their cars. Bonds also could be sold against that money to allow for even more road improvements.

The vehicle excise tax, which brings in a whopping $1.6 billion every two years, is swelling the general fund surplus, Davis says. However, theres some question how such a transfer would work given the constraints of Initiative 601.

Davis asserts that the Legislature must do something during the session about the transportation problems. It doesnt have to be coming up with a whole $20 billion solution, he says, but there has to be a clear commitment to increase funding. Transportation has spent the last four years as everyones top priority without anything being accomplished, Davis notes. Protect advancesOn the other hand, business has made large strides in other areas in the last few years, pushing through a rollback of large business-and-occupation tax increases and repeal of much of a 1993 health-care reform law that would have required employers to provide health insurance for employees.

There have been many gains made, and our desire is to keep them in place, and to work to gain more pro-business changes in the 1998 session, says the AWBs Brunell.

He says continued regulatory reform is needed. AWB would like to ensure that state agencies go through a formal rule-making process when they promulgate regulations, rather than just issuing directives that can have the power of those rules.

A regular review of rules and regulations that are already on the books also is a priority for the group.

AWB also is promoting changes to the workers compensation system that would allow small businesses to join together and buy insurance from the private sector, Brunell says. That would give small businesses a choice, he adds.

More refinement also is needed in the states Growth Management Act, Brunell says. AWB hopes to promote more streamlined land-use regulations, greater coordination between the growth management law and the State Environmental Policy Act, and better delineation of the respective responsibilities of state growth management hearing boards and local jurisdictions.

The NFIB, meanwhile, is hoping for broad-based tax relief, perhaps through additional decreases in the B&O tax, and will promote reducing worker benefits and employer costs under the states unemployment insurance system.

In addition, the group also will seek legislation to make employers immune from liability when they provide references on former employees. Many employers arent giving out information at all on former employees, the NFIBs Logue says, because they fear retaliation if former employees dont get jobs they apply for.

The Spokane Area Chamber of Commerce plans a big push for tax-increment financing, which would allow local governments to use property-tax revenues generated by new private developments to pay for public improvements, such as infrastructure, that allow the developments to be built.

The lack of tax-increment financing was a factor in a decision by Moses Lake-based Advanced Silicon Materials Inc. two years ago to build a $500 million plant in Butte, Mont., rather than near Spokane.

We need that flexibility here, says the chambers Kirschner. Were looking at creating jobs.

A similar proposal, that would do the same thing with B&O and sales-tax receipts, is being floated by other communities in the state, including Tacoma.

Id be tickled if both proposals passed, Kirschner says. I dont think its a slam dunk, but we have the interest of several legislators.

  • Marlene Mehlhaff

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