Challenge for Washington’s New Governor: Economic Competitiveness and Transportation Issues

Port of Seattle. Image – flickr user Slack Action (www.flickr.comphotosslackaction).

Washington State’s economic vitality is due in part to the thousands of businesses and jobs engaged in the import-export industry. Infrastructure maintenance and improvements will, in part, determine how competitive those businesses and the state will be in the future.

Fortunately, Washington State Governor-elect Jay Inslee inherits a state economy that is “healthier and has better bones than most.” So says Jon Talton, an insightful tell-it-like-it-is economic columnist for the Seattle Times. Talton laid out ten areas that could benefit from gubernatorial leadership. Two of the ten are related to transportation and are included below along with our commentary. To read all ten areas see “How next governor can keep state competitive.”

Talton’s first transportation-related area needing gubernatorial leadership:

“An unhealthy port rivalry. Tacoma and Seattle fight a tit-for-tat battle over container traffic, but the dirty secret is that the region is losing market share. These pressures will only grow as the wider Panama Canal opens and Canada’s Prince Rupert gains business.

Port consolidation is the place where angels fear to swim and Pierce County would never allow it. But the governor can work with both ports to gain new business.

. . . .Washington is among the nation’s most trade-dependent states, so the governor must be constantly pushing state exports, working to attract foreign direct investment and draw tourists.”

Our view: Talton is spot-on. Washington’s ports face being the proverbial frog in the slow-to-boil pot. Other states and regions (e.g., Florida, Georgia, British Columbia) have their act together and are aggressively investing to upgrade their port facilities to increase their share of overseas imports. I believe the Ports of Seattle and Tacoma spend more time trying to expand their business than compete with each other and that both ports recognize and are communicating the threats posed by other national and international ports.

But that communication often falls on too many deaf ears in the state capital. The state has long known what infrastructure projects need to be funded to maintain and expand Washington port-related infrastructure and the thousands of jobs across the state which they support. A 2007 report estimated ports contribute about $500 million in state and local taxes annually. The Ports of Tacoma and Seattle alone account for over 260,000 jobs. But “hope” alone is unlikely to get the new Governor and the necessary majority of legislators to agree on a path forward to act in 2013. It will also require a well-coordinated outcry from the (often silent) thousands of businesses and workers involved in the import-export industry and supply chain.

Some good news: Governor-elect Inslee is familiar with the issues, having represented agriculture-oriented central Washington in Congress, and later represented the ports-and-trade-oriented Puget Sound in Congress.

Talton’s second transportation-related area that could use gubernatorial leadership:

“Infrastructure. Washington must continue investing in infrastructure to compete against international rivals. Urban areas need more and better transit, as well as better freight-rail capacity in some places. Rural areas need better ways to get their goods to market, both highways and rail.

Trucking executive Gordon said, “We need better integration between state and local funding mechanisms because the ‘last mile’ connectors are often afterthoughts in the process and can create large safety and congestion issues.”

Our comment: Talton again is spot-on, with “continue investing” being the key phrase. The state has a good record to build upon, since legislators and voters approved transportation investment proposals in 2003 and 2005 that funded 421 projects.

As of June 30, 81% of the 330 completed projects were delivered both on time and on budget (88% were completed early or on time, 91% were completed on or under budget). Those projects improved traveler safety, fixed roads to reduce vehicle maintenance costs for thousands of travelers, preserved many roads and bridges for years to come, and in some cases reduced the costs of getting goods to market.

Unfortunately, few voters and legislators are award of that record. In large part, that’s because the media would rather focus on the State DOT’s occasional missteps. If Governor-elect wants to increase public trust in WSDOT, he could begin with a very regular, aggressive, and articulate explanation of all that WSDOT is getting right.

And few voters and legislators are aware of the transportation needs.  In late 2011 a non-partisan committee of transportation interests and elected officials, “Connecting Washington”, studied the state’s transportation needs and finances. They recommended a ten-year, $21 billion multi-modal, state and local transportation improvements program, a prioritized program culled from the overall state and local improvements program estimated to cost $50 billion. In January 2012 the Governor proposed a two-year, $3.6 billion improvements program which the legislature reduced to about $90 million, and approved.

Assume for the moment the $21 billion proposal contains some “nice-to-haves” and reduce it by about 25% to about $16 billion.  Obviously, $90 million every two years gets you nowhere close. The state simply falls further behind in maintaining its transportation network.

Two minor quibbles with Talton’s analysis. First, as noted earlier, Washington is competing not only against international rivals like Prince Rupert (British Columbia) and emerging Mexican ports. Other states and regions across the country are investing in infrastructure, particularly trade-oriented port infrastructure and last-mile connectors. Second, transit is equally important in rural communities, where it is arguably more challenging to fund transit operations.

During the campaign, candidate Inslee remarked he wanted to build more trust in government, and implement “lean management,” before asking voters to support a transportation investment proposal. Let’s hope that Governor Inslee will accomplish those tasks sooner rather than later. A number of stakeholders are nervous it will be “later.” Acting sooner is important for businesses and commuters who waste time and money due to congestion and rough roads, and for growing the state’s economy.

Learn more about what Jay Inslee said about transportation issues during the campaign.