What the 2019 state legislative session means for Pierce County

The 66th Washington State legislative session came to a close, yielding some big economic development wins for Tacoma-Pierce County. From a bill that will help pump up development of commercial office space in Tacoma and other smaller cities in Washington State, to funds that will fast-track completion of key transportation corridors, there’s a lot to celebrate. On the flip side, the session also produced major tax increases likely to be felt across the business community.

Here’s a look at results from the 2019 session that impact Tacoma-Pierce County.

A unified voice in Olympia 

For the  Washington Economic Development Association (WEDA), a partner of the  Economic Development Board for Tacoma-Pierce County, the 2019 legislative session was an opportunity to reverse some negative trends and put more resources in the pockets of organizations across Washington State working to retain, expand, and recruit jobs and investment.

“In the last year, we cranked up the volume on the benefits of economic development investments, helping people understand we can’t be complacent,” said Suzanne Dale Estey, WEDA executive director. “We need to be intentional across the whole state, where many people are still struggling.”

The nonprofit group is Washington State’s only trade association focused on economic development, comprised of private businesses, economic development councils, ports, governments, tribes and others committed to enhancing the state’s job-creation climate. When WEDA speaks, Olympia listens.

Bolstering the state’s economic development ecosystem topped WEDA’s 2019 legislative agenda. Here are some of the results of WEDA’s focused effort.

Fortification across the state. Following a decade-long decline in funding for Washington State’s Association Development Organizations (ADOs), such as the EDB, the 2019 legislative session brought a rebound in funding that will benefit regional economic development in counties of all sizes across the state. The $1 million bump is the first increase in ADO funding since 2007. “The message was clear,” Dale Estey said. “It’s not ok that we made these drastic cuts. We need to empower communities across Washington with tools to be world-class economic engines and assist businesses large and small in becoming globally competitive. Now, we’re on our way to restoring this critical economic development ecosystem.”

Conversely, the state’s economic development Strategic Reserve Fund (SRF) took a $2 million hit. The discretionary job creation/retention incentive can be used for workforce development, technical or planning assistance, environmental analysis or relocation assistance. Dale Estey is optimistic a fix to restore funding is in the works for the next supplemental session.

Tacoma leads office development incentive. A huge win for Tacoma-Pierce County was passage of HB 1746, which incentivizes the development of commercial office space in cities in counties with a population of less than 1.5 million. The City of Tacoma led the way on the bipartisan bill with outstanding assistance from the Tacoma-Pierce County Chamber and WEDA. The bill was sponsored by Representatives Jake Fey (WA-27), Chris Gildon (WA-25), Kristine Kilduff (WA-28), Mari Leavitt (WA-28), Kelly Chambers (WA-25), Kristine Reeves (WA-30), Laurie Jinkins (WA-27), June Robinson (WA-38) and Andrew Barkis (WA-2). Senators Steve O’Ban (WA-28), Sharon Brown (WA-8), Guy Palumbo (WA-1) and Keith Wagoner (WA-39) sponsored the senate bill, SB 5051.

Photo: Morf Morford
Photo: Morf Morford

While market conditions have changed since work on the bill began years ago, the message to the business community hasn’t. “Tacoma welcomes businesses, their employees and their families,” said Elly Walkowiak, assistant director, City of Tacoma Community and Economic Development Department. “Tacoma worked hard to ensure that investment in commercial office space in smaller cities can compete with the Seattle market and its higher lease rates.” The legislation applies to historic preservation, seismic retrofit and redevelopment of existing buildings as well as new development. And it’s one more vital tool cities can use to offer a competitive package to investors.

Green light for transportation projects

The legislative session paved the way for transportation improvements expected to pump up economic development in the region. Most significant, passage of SB 5825 provided the final major piece of state funding ($180 million) for the Puget Sound Gateway Program, which will complete State Route 167 in Pierce County and State Route 509 in King County, essential gateways to Tacoma and Seattle ports. Additionally, the bill bonds $340 million for the project, accelerating both cash flow and the construction schedule. Construction time is expected to be reduced by 25 percent, with completion scheduled for 2028.

Other transportation wins include:

$332 million for I-5 improvements including a new lane between Thorne Lane and the Mounts Road interchange near Joint Base Lewis McChord, which is expected to reduce chronic traffic congestion through the corridor and provide safer interchanges and improved traffic flow.

$4 million for DuPont-Steilacoom Road lane construction in both directions, easing congestion for local commuters.

$4.2 million for Pierce Transit stations along the Pacific Ave./SR-7 Bus Rapid Transit (BRT) route. The new BRT line is expected to encourage economic development and increase transportation options along one of Pierce County’s busiest corridors.

Big pluses for Port

Along with SR 167/509 project acceleration funding, the 2019 legislative session produced additional victories that will benefit The Northwest Seaport Alliance (NWSA).

HB 1254 allows unregistered vehicles shipped as marine cargo to be operated on public roadways. The bill avoids potential disruption to the Port of Tacoma auto line of business and potential secondary adverse impacts to the breakbulk business. “The bill not only preserved 277 jobs associated with autos being shipped through Auto Warehousing Company, it also will allow for the growth of the new Taylor Way auto processing facility operated by Wallenius Wilhelmsen Logistics,” said Sean Eagan, Port of Tacoma government affairs director.

HB 1512 authorizes utilities to invest in transportation electrification projects. Passage of the bill allows Tacoma Public Utilities to invest in shore power infrastructure at the Port of Tacoma’s marine terminals, for example, helping reduce initial capital costs for the NWSA and/or terminal operators while expanding the customer base for the utilities.

Mix of taxes

Not every tax is created equal and the session had some surprises, including a significant increase in business and occupation taxes on large banks and a change to the state’s real estate excise tax. The business community is still digesting the results and their impact on local job creation and investment.

Building boom

The two-year Washington State capital budget appropriates funds for state construction projects, grants and loan programs for local governments, and to build and improve K-12 schools and facilities for higher education.

Some notable line items in the $4.9 billion biennium budget include:

$96.5M for local government infrastructure

$175M for affordable housing projects

$241.7M for local and community projects

$70.1M for clean-energy tech, energy efficient grants, weatherization and housing rehab

$148.4M for toxics cleanup and prevention projects

$974M for higher education facilities

$1.12B for public school constructions

On the federal front

In the 115th Congress, Rep. Derek Kilmer (WA-6), former EDB VP, cosponsored the Investing in Opportunity Act (HR 828). The bill is the basis for the Opportunity Zone program that created an incentive for entrepreneurs and businesses to invest in communities throughout the region. Pierce County is home to 12 designated Opportunity Zones.

Rep. Kilmer also used his position on the Appropriations Committee to urge the Department of Treasury and Small Business Administration to work together to develop a strategy to identify resources to support entrepreneurs and promote greater investments in Opportunity Zones. Also this year, Pierce Transit worked alongside Rep. Kilmer’s office to include language in the House Transportation, Housing and Urban Development, and Related Agencies (THUD) bill that encourages the Federal Transit Administration to prioritize funding transit projects serving Opportunity Zones. (The Pacific Ave./SR-7 BRT corridor touches six of the zones.)

“Working at the EDB gave me a front-row seat to the ways in which public policy makes an impact on economic development, on our competitiveness and on growing jobs,” Rep. Kilmer said. “I still look at economic development as a central part of my job. I want to ensure everyone-regardless of where they live-has the opportunity to earn a good living in our ever-changing economy.”

– Originally appeared: Economic Development Board for Tacoma-Pierce County