Gov. Christine Gregoire on Thursday proposed a list of new tax incentives and capital investments aimed at creating jobs and stimulating the economy.
The governor, speaking at an economic forecast conference in Seattle, said her plan would produce 40,000 jobs and $2 billion in investment for the state.
But the programs would cost $75.2 million to implement over the next four years.
Gregoire said benefits from the investments would outweigh the expenses.
“There’s a huge net gain,” she said. “When they do their fiscal notes in Olympia and they say it costs us money, that’s a fiction. It doesn’t cost us money, because if we didn’t do anything, we weren’t going to get anything anyway.”
The governor’s plan includes a $2,000 tax credit for each new hire that small businesses make over the next three years, as well as a drop in the employee increase required to qualify for the rural-county new-employee tax credit – from 15 percent down to 10-percent.
Gregoire said those measures would create 15,000 jobs and help businesses stay open during the recession.
The governor also proposed a sales-tax waiver for counties with unemployment greater than 14 percent, saying the move would spur private investment and produce jobs.
Tracy Corley, chair of the Seattle Chamber of Commerce’s council for small business, supported the governor’s plan during a press conference Thursday.
“This is how our economy is going to recover,” she said. “It’s going to be a partnership between private enterprise and public policy that is going to help us get through this.”
Gregoire’s plan also calls for a business-and-occupation tax credit for large capital projects that she said would create 20,000 construction jobs over the next three years. That program would be capped at $100 million.
The governor also proposed extending all previously approved development permits for two years and expanding the state’s permitting teams to reduce review times.
Gregoire said those actions would generate $2 billion in private investments for Washington over the next two years.
The governor also said she has ordered the state Department of Commerce to create a new program aimed at growing the number of clean-energy jobs for Washington, and she promised the state will retrofit its inefficient buildings to unlock $60 million in energy savings.
Gregoire additionally proposed extending state exemptions for retail sales tax on clean fuel vehicles and biofuels, as well as incentives for Federal Aviation Regulation repair stations.
State lawmakers are trying to solve a $2.6 billion state budget deficit during the 60-day legislative session that began Jan. 6.
The governor has proposed a budget that would close the gap with $950 million in cuts, and $779 million in new revenue that would come by way of federal grants and the elimination of tax loopholes for out-of-state companies.
Gregoire’s budget would cover the remaining deficit with $230 million in rainy day funds, $400 million in one-time transfers, and $200 million in fund balances.
Legislators are also considering a number of possible tax measures, including new taxes on candy and gum, baked goods, and cigarettes, although each would raise a relatively small amount of revenue.
