State’s economic problems must be dealt with now, Don Brunell says

The Association of Washington Business president says legislators in Olympia face some tough choices to make the state competitive.

Speaking to the Lakewood Chamber of Commerce on Thursday of last week, Association of Washington Business President Don Brunell said the state’s $2.6 billion budget shortfall must be dealt with now, as “it won’t get any easier in the future.”

Brunell, the featured speaker at the chamber’s general membership luncheon at the Tacoma Country & Golf Club, told business and community leaders that lawmakers in Olympia need to use the “Priorities of Government” process initiated by Gov. Gary Locke to deal with the deficit.

The “Priorities of Government” plan was started after economic indicators in June 2001 showed the state’s business cycle and economy were on a downturn, Brunell explained.

The terrorist attacks of Sept. 11, 2001, exacerbated the state’s economic woes.

“In this state we’ve been hit pretty hard,” Brunell said, making reference to Boeing moving its headquarters from Seattle to Chicago and the struggling airline industry.

“There are no easy answers,” he said. “There are no easy solutions.”

Brunell continued: “If we don’t deal with this now and just raise taxes, it creates a bow wave of more taxes in future budgets.”

The Association of Washington Business plan to deal with the state’s budget shortfall includes:

– Reforming the state’s unemployment system – to reverse the average 15 percent rate increase, which went into effect earlier this month – and workers’ compensation premiums. The Department of Labor and Industries has raised workers’ compensation premiums by 29 percent.

– Passing liability insurance reforms to reduce the skyrocketing costs of court decisions for doctors, contractors, school districts, local and state governments and employers in general. The state alone allocated $100 million in the 2003-2005 biennium to pay court settlements.

– Passing legislation allowing more flexibility in health insurance plans to lower costs and make health insurance more affordable for employees and employers. “Health care is a big budget driver in Olympia,” Brunell said. “We have to bring some of those costs under control.”

– Passing legislation allowing various economic regions in the state to set their own minimum wage rates. “Minimum wage is an issue that’s got to change,” Brunell stated. Washington state’s minimum wage is $7.01 per hour, the second highest in the nation.

“What happens in Olympia really makes a difference,” Brunell said, noting Washington needs to be more competitive to attract and keep businesses in the state.

There is a lot of deflation in the economy, he said, and there is pressure for businesses to reduce costs. “The economy is changed, and we’ve got to change with it.”

Still, it wasn’t all bad news as far the economy goes. “Our economy is going to grow over the next two years,” Brunell predicted. “It’s just not going to grow as much as we hoped.”

The Association of Washington Business, with 3,700 members, is the oldest and most influential business organization in the state, serving as the state’s chamber of commerce. The organization lobbies in Olympia for public policy that encourages economic growth, boosts production and creates jobs.

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