Washington

WASHINGTON Home to major employers such as Boeing, Starbucks, and Microsoft, the state of Washington continued to suffer the economic effects of the recent recession in 2010.

Unemployment rates peaked near 11 percent, before showing some signs of easing later in the year. Like the current year. Beyond its headline corporate citizens, Washington has focused its economic development and job creation efforts on several established and emerging industries, including aerospace, clean energy, life sciences, IT, manufacturing, marine technologies, agriculture and food, and tourism.

Budget Situation and Gubernatorial Priorities Entering the budgeting period for the upcoming biennium, Washington state legislators and Governor Christine billion. The debate over closing this gap has, as in many other states, proved to be challenging. With the state’s House, Senate, and governor all pushing for different combinations of cuts and revenue increases, the budgeting process was forced into overtime in the form of a special session.

Governor Gregoire presented a biennial budget that called for an increased focus on core services throughout state agencies. Cuts were found throughout the proposal, along with calls for restructuring government agencies, including rolling 21 existing departments into nine new ones, in order to save money on administration and operations.

The governor has also placed pension reform on the policy agenda, calling for halting automatic increases, which held the potential to save the state up to $2 billion over the next four years, and north of $11 billion over 25 years.

In order to support the state’s businesses, Gregoire asked for legislative support for cuts to workers’ compensation and unemployment insurance, allowing the state to invest the savings in other activities including job creation. The administration has supported continued funding for tax incentives to attract and retain business, including tax credits for new hires. The governor has also advanced a 10-point job creation plan that calls for regulatory changes and streamlining permitting processes.

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Washington’s Place in the Rankings 1st

Export Intensity

1st

STEM Job Concentration

5th

Small Business Survival Index

9th

Economic Output Per Job

9th

Business Birth Rate

11th

Median Family Income

11th

STEM Job Growth

11th

Business Tax Climate

15th

College Affordability

16th

Long-term Job Growth

16th 17th

Educational Attainment

17th

High Speed Broadband Intensity

17th

Transportation Infrastructure Performance

18th

High Speed Broadband Availability

19th

High School Advanced Placement Intensity

20th

Gross State Product Growth

22nd

State and Local Tax Burden

Job Creation and Enterprise-Friendly Initiatives Innovation and technology-based economic development efforts are a central part of Washington’s job creation agenda. The state offers multiple tax incentives and programs focused on attracting, retaining, and growing job opportunities in key advanced industries. The state’s

high technology business and occupation tax credit is available to businesses in the advanced computing, advanced materials, biotech, electronic device, and environmental tech industries that conduct research and development (R&D) activities in the state. Companies in the same industry set also have access to a sales and

workforce training that will make it more competitive.

Washington also maintains an active apprenticeship funding program, which offers one-year program development funding in support of creation and expansion of apprenticeship programs through the state’s Board for Community and Technical Colleges.

manufacturing activity expenses. Biotech and medical devices companies also receive sales and use tax breaks

Washington’s Community Economic Revitalization Board (CERB) provides infrastructure funding support to communities throughout the state. CERB focuses on

job creation.

Aerospace manufacturing and product development continues to be an industry of vast importance in structure. The state offers several special aerospace tax incentives, including a business and occupation tax rate decrease, aerospace research and development tax credits, a sales and use tax exemption on computers used in aerospace design.

Multiple other tax credits for research and development, sales and use taxes, and capital investment activities are offered to other target industries, including timber extraction, manufacturing, food processing, biofuel and renewable energy production, semiconductor manufacture, smelting, farming, and warehousing.

Washington’s Innovation Partnership Zones are locally driven technology job development efforts focused around key industry clusters throughout the state. Local economic development agencies, workforce development councils, and local governments work together with private sector partners to build technology commercialization efforts, offer incubation services for entrepreneurial start-ups, support tech transfer, and provide needed workforce training to companies located in the innovation zones.

University researchers are also actively involved in the partnerships, which last for four years before a community must reapply.

Washington also offers an array of workforce development services and incentives. These include a workforce business and operations tax credit equal to up to 50 percent Customized Employment Training Program (CTP).

The CTP pays the upfront costs for customized training, which businesses can later repay free of interest. Back payments for training can be made over an 18-month period, and businesses receiving training services are only required to pay for 25 percent of the costs upon completion of the training. Such repayment options remove cost barriers that might otherwise keep a business from pursing

creation opportunities. Since 1982, CERB has provided local governments throughout Washington with $149 million of infrastructure investment, which was used to leverage $5.2 billion in private business investment. In addition to funding, CERB offers communities support in evaluating potential infrastructure projects and development of overall funding strategies for proposed projects.

Rural areas are not overlooked in Washington’s job creation efforts. The Rural Washington Loan Fund cost of a business project that will create or retain jobs in a rural area of the state. Funding is focused on property acquisition, improvement, or construction, with up to $1 In order to help reduce the regulatory burdens on small businesses, Washington’s Department of Licensing offers businesses seeking to apply for or renew licenses access to a Master Business Application. The master application for multiple classes and types of license, at both the state and pay system, the master application helps entrepreneurs access needed licensing more quickly and easily, allowing them to focus on business matters instead of paperwork.

Clusters in Washington Largest Cluster: Business & Financial Services, 415,931 jobs Largest Growth Cluster: Business & Financial Services, 89,290 new jobs since 2002 Most Competitive Cluster: Information Technology & Telecommunications, 37,215 new or retained jobs due to state competitive advantage Most Concentrated Cluster: Transportation Equipment Manufacturing, 3.06 times the national concentration level

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