Two stories in The Lens looking at legislative efforts to boost exports and manufacturing in Washington

The Lens has a pair of stories today on legislative proposals to lure major export industry to Washington and to make our state more appealing for manufacturing. Together the articles are good reminders of how state policy can work to promote opportunity and economic vitality.

The export story, by TJ Martinell, focuses on semiconductor manufacturing.

In 2016, the semiconductor manufacturing industry exported $43.1 billion worth of product, making it the third most lucrative U.S. export. A new report by the Semiconductor Industry Association (SIA) found that global sales have grown by 16.5 percent each year. State lawmakers want to keep and attract these manufactures located in southwest Washington with SB 5916, which would extend business and occupation tax and sales and use tax incentives for these employers. The bill cleared Senate Ways and Means on Tuesday, April 4 after a public hearing that same day, and has been sent to Rules.

The bill has bipartisan sponsorship. And it is supported by regional economic development professionals.

The incentives would add to Washington’s ideal location on the West Coast as a major trade port. That’s according to Max Ault, Vice President of the Columbia River Economic Development Council based in Clark County. The county has seven primary semiconductor manufacturers.

He told the committee at the April 4 public hearing that “for decades, a cornerstone of southwest Washington’s economy has been semiconductor manufacturing industry, with a significant capital investment these companies have made in their facilities over the years in our community. They resulted in thousands of both middle and high skilled jobs, high wage jobs, along with increasingly close collaboration with our education and workforce partners.”

The manufacturing piece is by Mike Richards, who reports,

A Senate bill making its way through the Washington State Legislature aims to attract more manufacturing companies to move to the state and incentivize those and any existing businesses to remain and build their projects within Washington. SB 5642, which would offer tax deferrals for eligible manufacturing projects to be reinvested into job training programs, was voted out of committee this week and sent to Rules.

Proponents of the bill argue the money would be well-spent. According to the National Association of Manufacturers’ website, manufacturing has the highest multiplier effect of any sector, at a $1.81 economic return per dollar invested nationally.

Among the bill’s supporters is the Association of Washington Business.

During the bill’s first public hearing in [February in the Agriculture, Water, Trade and Economic Development] committee [Senate Majority Deputy Leader Sharon] Brown said, “The genesis for this bill came because I was getting exasperated of listening to a lot of requests for B&O tax exemptions” and she “absolutely loved” the idea of a pilot program for the entire state.

“We had manufacturers across the entire state that were able to avail themselves of this program…we had manufacturers that were getting ready to leave this state that wrote to me that ‘you know what, because of this program we are now going to stay here, we’re going to build our manufacturing facility here,” she added.

“These are manufacturing jobs you guys are incentivizing,” Eric Lohnes told the committee. He is Government Affairs Director for the Association of Washington Business.

In 2015, “those programs were picked up quickly and this just allows other companies and other economic development regions to take advantage of this,” he added. “Those deferred amounts are then reinvested back into employee training.”

The bill passed the Senate Ways and Means Committee Monday, April 3.

We have supported tax policies to maintain and increase economic activity in our state. For a good overview of how such policies work, we recommend the Washington Research Council special report, Using Tax Policy to Promote Economic Vitality.