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Washington’s high cost of doing business | Column
Gov. Jay Inslee was in New York for the world rollout of BMW’s new electric car, the BMW i3, which is partially built in Washington. We are all justifiably proud of our state’s role and see the car as a harbinger of Washington’s economic future.
The BMW i3 features parts made from carbon fiber processed at the SGL plant in Moses Lake. The $100 million SGL plant is located in Moses Lake largely because of affordable energy from hydropower and tax incentives that encourage companies to locate in rural areas.
SGL employs 80 people and we hope that number will grow. But that growth is not assured.
SGL would like to expand its Moses Lake facility, but the tax incentive that helped convince the company to locate there has expired. That puts a microscope on other factors that make Washington a high-cost state in which to do business.
For example, workers’ compensation, an insurance program for workers injured on the job. Washington, has the highest workers’ comp benefits in the nation. Another big cost driver for Washington employers is unemployment insurance (UI).
Our state’s top manufacturer, The Boeing Company, is dealing with many of these issues.
Asked about recent job cuts and future job prospects, Boeing’s chief financial officer, Greg Smith, says the company is focusing on growing jobs elsewhere, in lower-cost regions of the country.
Perhaps it is time to build on the success of tax incentives that convince employers to locate in Washington by offering similar incentives to existing employers to expand and add jobs here.
Employers need a consistent and predictable tax and regulatory environment to make long-term plans. Similarly, state lawmakers should constantly reassess the impacts of business costs in Washington and ensure that we offer competitive advantages to employers.
Washington state has many attributes that attract new employers to our beautiful state. The challenge may be convincing them to stay here.
Don Brunell is the president of the Association of Washington Business.