Archive for the ‘Public Policy’ Category
August 12, 2014 (Seattle, WA) – The decisions that voters make this year will have more dramatic implications on state government than normal, State Senator Marko Liias told the WCTA. If Democrats control the legislature—or voters insist on the development of a moderate Republican faction, important decisions will be made and things will get done. If the legislature stays as divided as is has been, we will face continual impasses on important issues such as education funding, research & development, and climate. Read More…
Published on Xconomy, August 5, 2014. Written by Tom Ranken (WCTA President) and Eric Viola (WCTA Public Policy Analyst). The WCTA board voted unanimously to support re-authorization of the program in its January 2014 meeting.
Washington state’s principal high tech innovation tax incentives are set to expire on January 1. Adopted in 1994, the programs removed large tax barriers to performing new research and development activities in Washington. They have been counted on by the high tech sector for twenty years, providing early boosts for young, innovative companies, and high-value jobs for the state.
Before the programs, Washington tax law was punitive to R&D growth—and the job growth that goes with it. Building a $10 million R&D facility, for example, would incur more than $1 million in tax liability. Other states offered tax breaks and even helped pay for new facilities outright, banking that such investments would pay dividends in the form of high-paying jobs for the state. Our state has an unusual constitutional prohibition against the lending of state credit, which has severely limited our ability to compete with other states for business growth. The R&D tax credits were a legal means of addressing a small portion of that problem.
In the coming years, the state budget is going to get even more challenging. In 2012, the state Supreme Court ruled that Washington State had not met its “paramount duty” of making “ample provision for the education of all children.” It is not yet clear what the budget impact of that decision will be, but it is expected to require large additions to the education budget. The R&D incentives, painted as wastefully throwing millions of state dollars at established companies, made an easy target.
Do the programs really create jobs? The state’s research (PDF) shows inconsistent results over the past seven years. The research is almost entirely drawn from the Great Recession. With raging volatility surrounding it, the high tech sector was hit hard.
The data for 2012, when the state had gotten its head above water, reveals the true value of these programs.
In 2012, job growth among companies receiving the R&D tax incentives was 4 percent—double the national high tech sector rate and far outstripping the 1.6 percent rate of Washington companies that didn’t use the incentives. Executives at young, growing cleantech companies like 3Tier and UniEnergy Technologies have been quite clear that the people, equipment, and facilities they’ve invested in under this program have been critical to their scaling up.
At the same time, that job growth stayed in state: 86 percent of new employees hired by companies receiving the incentives were Washington residents, compared to 67 percent in 2008. And their survival rate was 53 percent, compared to less than 39 percent for those that did not get incentives. Washington ranked third in patents per capita in 2012, up from seventh at the program’s inception. Washington’s average annual growth in high tech patents from the same time period is 8 percent. The next-highest state is California, with 6.4 percent annual growth.
The 2013 Department of Revenue study concluded that, compared to other states, Washington’s growth in the high tech industry was competitive without the incentives. But unsurprisingly, adding the R&D incentives improved Washington’s rank. The data is in strong, if not unanimous, support of the state’s high tech R&D incentives.
But if the data is strong, why are these programs set to perish on January 1?
The companies that benefitted the most from these programs were the worst equipped to protect them. Small, young, innovative companies for which the limited state funds had the greatest impact simply couldn’t afford to lobby the legislature. And so, on January 1, the small startups and labs that benefitted the most from the R&D incentives will get just a little bit smaller.
The Washington Clean Tech Alliance’s inaugural showcase event earlier this summer revealed the robust growth of R&D under the current system. Prominent local job creators like Boeing and Alaska Airlines were in attendance, bolstered by the innovation and potential represented by the sheer number of young, R&D-heavy companies that presented their research at the event. Whether the achievements made will remain salient without continued incentives will be seen in the coming months as small innovators prepare to cut back R&D spending, including new project development, construction, and research positions.
We believe, ultimately, that an important part of the solution to our state’s budget challenges is the creation of new jobs; it doesn’t make sense to cut a program engineered specifically to meet that goal.
Follow Tom Ranken on Twitter at @jthomasranken.
Gov. Jay Inslee is putting a cap-and-trade system and a carbon tax into play as ways to tackle the fallout from global warming in Washington.
Those are the two propositions that an Inslee-appointed carbon emissions advisory task force will begin studying today, according to a document posted on the governor’s Web site on Monday. The task force will be briefed on the propositions at 10 a.m. in Bellevue.
Inslee wants the task force to look at the cap-and-trade system and a carbon tax and tinker with the details that would be involved before submitting recommendations to him in December. Inslee will use those recommendations to pitch bills to tackle carbon emissions in the 2015 legislative session.
In a cap-and-trade program, Washington would have an overall annual limit to its carbon dioxide emissions. Limits would be set for specific geographic areas. Firms would obtain rights for specific amounts of emissions in those areas and could trade their rights. A carbon tax is simply a levy on a firm’s carbon dioxide emissions, which is supposed to inspire a business to decrease its emissions. Read More…
July 24, 2014 (Olympia, WA) – Gov. Jay Inslee came to AWB earlier this week to share with the business community his perspectives behind his climate initiative. Carbon reduction is a cornerstone of Inslee’s administration, and he made the case that innovating toward a low-carbon future can boost Washington’s economy.
That message was met with questions and skepticism by AWB members. They asked how can Washington maintain a competitive footing if rules imposed to reduce carbon emissions cause the costs of energy, fuel, and other business operations to rise. Read More…
A surprising but frustrating obstacle to carbon tax progress has been opinion polling. It took years for pollsters to even ask about a carbon tax rather than (or in addition to) cap-and-trade proposals. Even when that changed, little or no context was provided about possible uses of the revenues. Asking “do you support a carbon tax?” without at least hinting at possible revenue uses was akin to asking “Where should we land this punch?”
A revenue-neutral carbon tax, in which all tax revenue would be returned to the public as a rebate check ["dividend"], receives 56% support. The largest gains in support [relative to opinion on a carbon tax w/o revenue mention] come from Republicans. Read More…
We know cleantech is important in our state–it’s time to figure out how important it is.
To begin figuring this out, the WCTA has helped to convene a task force of expert stakeholders to get a grip on this hard-to-define sector. At the WCTA offices on July 22, 2014, the process began. Included in the task force were representatives from the Washington State Department of Commerce, the Washington State Department of Revenue, Washington State Employment Security Department, the Economic Development Council of Seattle-King County, and the WCTA. Two WCTA Board members joined the conversation: Board Chair Steve Gerritson and Richard Locke of the Washington State Department of Commerce. Read More…
We’ve been talking a lot recently about the need to rebuild and strengthen our nation’s infrastructure. As the President has made clear, a world-class infrastructure system is a vital part of a top-performing economy.
But there’s another important reason why we need to rebuild our infrastructure: climate change.
Communities across America need more resilient infrastructure that can withstand the impacts of climate change — like more extreme weather and increased flooding. That’s part of the reason why the President established the State, Local, and Tribal Leaders Task Force on Climate Preparedness and Resilience last November.
The Task Force, made up of 26 governors, mayors, and county and tribal officials from across the country, advises the President on how the federal government can best help American communities dealing with the effects of climate change. Today, the Task Force came to the White House for their fourth and final meeting, and will give the President final recommendations this fall.
“These leaders are here because states and communities that they represent are already dealing with the effects of climate change,” the President said at today’s meeting. “They’re seeing rising sea levels, more powerful hurricanes, more intense heatwaves, severe droughts, and wildfires out west. So this is already happening, and these leaders understand that climate change is a threat to public safety, it’s a threat to public health, and to something that we want to emphasize today — the infrastructure upon which our economy depends.” Read More…
Provided by Michael Grossman, FiftyPlusOne.
July 11, 2014 (Seattle, WA) – In support of the President’s Climate Action Plan, the U.S. Department of Energy is making up to $4 billion in loan guarantees available for innovative renewable energy and energy efficiency projects that avoid, reduce, or sequester greenhouse gasses. Read More…
WASHINGTON state is one of the cleanest, greenest states in the country, and its use of renewable energy is a source of great pride.
But drastic energy regulations could cause Washington families to see higher energy bills. And those higher bills, coupled with a weakened economy, would hurt moms and dads already struggling to make ends meet.
The Environmental Protection Agency (EPA) recently announced proposals that would require Washington state to cut its carbon emissions by a staggering 72 percent — a rate higher than anywhere else in the nation.
While coal makes up just over 3 percent of the state’s energy production, the stringent methodology behind the EPA’s calculations treats Washington as a top emitter. The state’s residents are being penalized, even though Washington is leading the way when it comes to clean energy. It just doesn’t add up. Read More…
By Eric Viola, WCTA Public Policy Analyst
June 30, 2014 (Seattle, WA) –There was little consensus amongst the panelists—even on issues as fundamental as whether or not carbon emissions were a problem—which contributed to a lively discussion at the final event in the WCTA’s Climate Series: A discussion of Cap and Trade policy.
Daniel Malarkey, WCTA Government Affairs Committee Chair and Vice President of Business Development and Public Policy at 1Energy Systems, opened the event and introduced Chamber President Maud Daudon. Ms. Daudon introduced the Seattle Metropolitan Chamber of Commerce’s commitment to the issue, explaining her three-part bottom-line position. “You need to have economic development, environmental stewardship, and you can’t leave anyone behind,” she described, “you need to make sure the rising tide really does lift all boats.” Part of that involves encouraging the spread of information and rational debate, and the Chamber has been proud to collaborate with the WCTA to present the four-part Climate Series. Read More…