Two Important Competitiveness Articles

Friday's Puget Sound Business Journal ran an excellent editorial by George Erb (subscription required). Erb concisely sets out a smart competitiveness agenda for the state, hitting themes similar to those of WashACE. Specifically, he commends the governor for shunning tax increases, encourages investment in the future (public works and higher education), and urges the state to nurture entrepreneurial activity. I encourage you to find a copy or read it on line.

I particularly like Erb's close, which reminds us to look beyond the recession.

The coming state and local budget cuts are unavoidable. They will be painful. But they don?t have to be debilitating, and we cannot let today?s harsh climate diminish our hopes for tomorrow.

Erb rightly cautions lawmakers not to fall into the trap of thinking their problems could be solved by closing "tax loopholes."

Too often,?loophole�� is just a rhetorical term for an incentive that someone disagrees with. It?s better to judge incentives on how effectively they meet government policy objectives.

And on that score, Don Brunell's column in today's Columbian provides good support for one possible target, the manufacturing machinery and equipment sales tax exemption.

Research by John Urbanchuk, the nation?s foremost expert on tax incentives, projects that, between now and 2016, the M&E exemption will create 54,100 new jobs in Washington, expand our state?s economy by $49.3 billion, put $22 billion in the pockets of Washington families, increase tax revenues for state and local governments by $2 billion, prompt $4.4 billion in new investment, and spark $1.3 billion in construction spending and equipment purchases.

Pretty good deal.