Building Industry Association of Washington reports the cost of not fixing Hirst: $6.9 Billion in lost economic activity

Lawmakers left Olympia without passing a capital budget or fixing the state Supreme Court’s Hirst decision. The issues are linked. And despite occasional references to ongoing discussions, there’s been little visible progress. 

Now there’s a quantitative analysis of the costs of failing to resolve the Hirst decision. The Building Industry Association of Washington commissioned an economic impact analysis by HR2 Research and Analytics.

BIAW reports the results and provides relevant background.

On October 6, 2016, the Washington State Supreme Court ruled in the so-called “Hirst” case. The implications of this decision have the potential of eliminating all or nearly all new household or exempt wells in rural Washington.

During the 2017 legislative sessions, press conferences of all four corners (both caucuses in both houses) and the Governor’s office repeatedly told the press there would be a Hirst fix, yet it didn’t get done. BIAW commissioned HR2 Research and Analytics to examine the economic impacts resulting from the Court’s decision. The results from the study reveal a significant impact to rural communities and residents as well as other parts of Washington state:

  • $6.9 billion lost in economic activity each year in Washington, predominantly in rural communities
  • $452.3 million in lost employee wages due to the impacts of Hirst, annually
  • Nearly 9,300 lost jobs (FTEs) in rural Washington, annually
  • $392.7 million in lost taxes to state and local governments, annually
  • $4.59 billion in losses to the construction industry, annually
  • $37 billion in lost property values in areas impacted by Hirst
  • $346 million in property taxes shifted to other properties in Washington due to the decision

Failure to produce a capital budget also has costs, of course. As we’ve written previously, it’s hard to understand why lawmakers cannot reach agreement on the two pieces of unfinished business.