[October 18, 2004] WashACE Report Shows Washington's Competitiveness is Falling in Several Key Areas; Washington Among the Most Expensive States to Do Business SEATTLE --(Business Wire)-- Oct. 18, 2004 -- The WashACE annual report that lists key indicators of the state's business climate in comparison to other states shows that, despite signs of the slowly recovering state economy, Washington has fallen in several areas critical to keeping local business competitive. Produced by the Washington Alliance for a Competitive Economy (WashACE), the 2005 Competitiveness Redbook reports data gathered on factors that contribute to economic growth, employment and quality of life in Washington. To rank Washington's appeal as a place to do business, the report notes such categories as tax foundation estimates, R&D per capita, airport on-time performance and percentage of roads in need of repair. According to the Redbook report, Washington is the top exporting state on a per-capita basis in the nation, remains in the top five in venture capital investments, and is in the top 15 in net jobs added -- all signs that the state economy is on the mend. Other advantages include a well-educated population, and comparatively moderate and uniform property taxes. But other factors are less encouraging. The Cost of Doing Business in Washington Going Up In the category of the cost of doing business -- where Hawaii is noted as the most expensive state (with a mean index of 134) -- Washington ranks eighth with a mean index of 107.9, just behind such states as California, Massachusetts and New York. Washington leads the nation in unemployment insurance taxes at a $695 average cost per employee, and is ranked sixth in unemployment insurance benefits. It ranks 40th in the annual average investment per employee in manufacturing. Washington also has the nation's highest minimum wages, and its workers comp costs continue to move up sharply because of increased time-loss benefits caused by recent Supreme Court decisions, and actions taken by the legislature in 1993. The high-tech boom and bust took its toll on the state economy -- a year ago, Washington led the country in high technology and employment; this year, the ranking dropped to 15. Estimated public school spending per pupil also experienced one of the hardest falls, going from number one last year to number 16, with Washington spending $10,516 per pupil. Such dramatic falls underscore the need for a strong effort between public and private organizations if Washington is to regain and retain its competitive position, said Steve Mullin, president of the Washington Roundtable. "It is critical that lawmakers stay committed to priorities-based budgeting, and job retention and creation," said Mullin. "Our focus must remain on rebuilding Washington's economy through targeted high-impact investments in transportation and overdue reforms to the state's workers' compensation and liability systems. And we need continued dedication to K-12 reform and innovation in higher education to better prepare the workforce for our state's future." AWB President Don Brunell noted, "As we look ahead to the 2005 legislative session, our state is facing a revenue shortfall. We cannot afford to set the clock back to 1993 and see employer taxes and fees increase. Our economy is slowly recovering, but if we are not careful, we could set it back dramatically." Richard Davis, president of the Washington Research Council, agreed: "The annual changes in the rankings demonstrate that, just as Washington policymakers work to improve the state's business climate, we must keep working to make this state the best in the nation for job creation and investment." Prepared by the Washington Research Council for WashACE and co-sponsored by the Washington Association of REALTORS(R)., the Redbook report has been so successful that the National Association of Manufacturers contracted with WashACE to produce a nationwide version to distribute to its members, Congress, the national media and federal agencies. The Washington Alliance for a Competitive Economy (WashACE) is a partnership between the Association of Washington Business (AWB), the Washington Roundtable and the Washington Research Council. Formed five years ago to identify key factors affecting job creation and economic development in Washington, WashACE developed a set of recommendations to the legislature and regulatory agencies to increase competitiveness; many recommendations that were embraced by Gov. Gary Locke's Competitiveness Council. [ Back To TMCnet.com's Homepage ]