June 7, 2023

Legislative session yields economic development gains

When the final gavel dropped on April 23 to signal the end of this year’s Washington State legislative session, lawmakers had approved a $69.3 billion two-year state budget that will provide funding for a range of programs across the state, from affordable housing projects and K-12 schools to environmental programs, mental health systems and more.

There was also much to celebrate around legislation that boosts economic development in the state.

WEDA for the wins

Special thanks to the Washington Economic Development Association (WEDA) for working hard to ensure that Washington State remains competitive. Executive Director Suzanne Dale Estey, Director of Operations Carey Sheffield, and Director of Legislative Advocacy Jim Justin were critical players in helping WEDA members make a difference.

“We made a big impact and significant strides on our 2023 legislative agenda and won 3.5 of our 4 top legislative priorities,” Dale Estey said. “We will stay the course to advocate for resources that ensure Washington State remains competitive.”

“This was a huge accomplishment,” said EDB President Bruce Kendall, who is also on WEDA’s board of directors. “As usual, Suzanne and her team led us to victory on many fronts.”

WEDA’s highest legislative priorities this year were to:

  • Strengthen the economic development ecosystem.
  • Foster catalysts for job recovery and growth.
  • Increase economic vitality for all of Washington.

Here’s a look at how WEDA’s top legislative priorities fared:

  • TIF fix bill. This legislation makes several critical corrections to the Tax Increment Financing (TIF) for Jobs bill passed by the legislature in 2021. The financing tool can be used by local governments for key development projects. The updated legislation will expand eligible uses of TIF to spur infrastructure and economic development across the state.
  • .09 rural tax. Legislation that extends the expiration for the rural county sales tax for public facilities and economic development until 2054.
  • $2.5 million for regional manufacturing pre-development will continue funding the Department of Commerce’s Industrial Site Readiness Grant program. (WEDA had advocated for $4.5 million.)
  • ADO funding. First, the good news. Legislation was signed into law that provides $1.4 million in grant-writing support for rural ADOs.

On the flip side, proposed legislation would have created an ongoing $10 million fund for associate development organizations (like the EDB) to catalyze initiatives that foster innovation, sustainability, partnerships and equity, and provide much-needed support to ADOs. The legislation made it through the House, Senate Business Committee and Ways & Means Committee, but was not passed before the Fiscal Committee cutoff.

WEDA also requested $10 million in funding that was proposed as a legislative request by champions in both chambers. In a shocking turn, the house and senate reduced maintenance level funding by $2 million. A rapid response by WEDA and its members helped get the message to lawmakers that the slash in funding would cause serious harm to the ADO network and its results-driven work. Fortunately, funding was retained at the current level.

A disappointing shortfall in the final budget was $1 million in funding to begin development of the Innovation Cluster Accelerator Program (ICAP). The program’s aim is to strengthen industry ecosystems and accelerate economic development. ICAP funding fell far short of the $13 million Department of Commerce decision package and the governor’s proposed $3.1 million.

Additional WEDA-supported budget items include:

  • $5.966 million for statewide tourism marketing and $9 million for the Washington Tourism Marketing Authority.
  • $4.2 million for the Strategic Reserve Fund to fund Manufacturing Council operations and the Evergreen Manufacturing Growth Grants
  • $250,000 for a military economic impact analysis to measure the economic impact of Washington’s five major military installations.
  • $820,000 for manufacturing to create the Washington Clean Manufacturing Leadership Act, which requires Commerce to perform an independent assessment of opportunities for new and emerging industries and appoint an industrial policy advisor.
  • $22 million for procurement technical assistance for local governments and contractors on public works contracting.
  • $7 million for the Small Business Innovation Fund (SBIF). Commerce will use funding for a few SBIF projects that have significant timing issues.
  • $1 million for business engagement tool licenses to renew existing licenses and procure additional licenses for cloud-based business engagement tools for state agencies, local workforce boards and economic development boards, to assist in complying with the state supplier diversity policy.
  • $2 million for arts business and nonprofit grants to provide bridge funding for continued recovery from the COVID-19 pandemic and related economic impacts.
  • $2.325 million for middle housing to develop model middle housing ordinances, establish a process for cities to seek approval of alternative local actions and provide technical assistance to cities.

Capital budget gains

The state’s $8.9 billion biennium construction budget also yielded some notable economic development wins, including:

  • $125 million for capital construction projects funded by the Community Economic Revitalization Board (CERB).
  • $50 million for state grants to administer statewide broadband equity, access and deployment through the state’s broadband office.
  • $40 million for awards to organizations for the statewide development of homeownership projects specific to first-time low-income households.
  • $37.2 million for CHIP (Connecting Housing to Infrastructure) grants and deferred loans to local governments, public utilities districts or their contracted service providers for system chargesand improvements for new affordable housing.
  • $20 million for CHIP grants for local governments or public utilities with a population of 150,000 or less and a jurisdiction that imposed sales and use tax.

Transportation on track

The final transportation budget of $13.5 billion includes $10 billion provided to the Washington State Department of Transportation. Within that lump sum is $873 million for the Puget Sound Gateway Program, bringing total funding for the project to $2.6 billion. The budget also includes funding for WSDOT to continue development of an I-5 master plan and planning for a new ultra-high-speed ground transportation corridor.

Swift special session addresses critical issue

A special legislative session that convened May 16 ended in a matter of hours with the passage of a new drug possession law. The so-called “Blake fix” – promptly signed into law by Gov. Inslee – focuses state and local efforts and resources on treatment and recovery and establishes a gross misdemeanor penalty for drug position and public drug use. It also offers some local control to municipalities.

Lawmakers needed to work quickly. Not only is the addiction crisis soaring in cities and counties across the state, but a temporary law that makes intentional drug possession illegal is set to expire July 1. Without a statewide law in place, local governments were poised to enact their own ordinances.


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