Gov. Jay Inslee

Gov. Jay Inslee on Wednesday unveiled a $120 million package of proposals to spur job growth around the state.

The plan includes tax breaks for new high tech companies, funding for aerospace training programs and new oversight ensuring the success of  STEM (Science, Technology, Engineering, Math) programs. The plan also includes a $50 million investment in clean energy programs.

Inslee also said he expects 10,000 new health care jobs through Medicaid expansion.

He characterized the plan as a “first step” in a broader jobs package. The $120 million price tag does not include funding for transportation projects, he said.

The state’s unemployment rate dropped  to 7.8 percent last month, but the  Employment Security Department has said recent drops in unemployment may be tied to unemployed job seekers who have stopped looking for work.

When asked how many jobs he hoped the plan would create, Inslee did not offer a specific number.

“More than we have today and enough to justify the investment and enough that it would be inexcusable not to adopt these common sense measures,” he said.

Republican leaders who met with the governor earlier to review the plan said they were open to many of the proposals, but questioned the timing.

“I think we are a little behind schedule. If he is going to run out a 75-part plan, I’d like to see it soon,” said House Minority Leader Richard DeBolt (R-Chehalis). “It’s one thing to go out and say you are going to change the world and do something different, but if you miss your timelines that doesn’t work for anybody.”

Republican Senate Caucus Leader Mark Schoesler (R-Ritzville) said they were trying to find common ground with Inslee’s proposals instead of just “throwing rocks.”

“I think we are all very interested in some of the STEM (Science, Technology, Engineering, Math) programs,” he said. “The problem is for our committee chairmen, we are extremely close to cutoff so if they don’t have budget implications they are going to be hard-pressed for time.”

Republicans have also called Inslee’s tax incentive proposals for high tech companies unfair, claiming he is “picking winners and losers.”

The governor defended the tax breaks on Wednesday, saying the plan identifies sectors where there is a potential for significant industrial growth.

“We want to target the companies that can offer innovative ways to do business,” he said.

TVW taped Inslee’s press conference. Watch it here.

Lawmakers are considering legislation that would create a new “training wage” lower than the state minimum wage for employers with less than 50 workers.

House Bill 1150 would allow some employers to pay 10 percent of their employees a wage set at 75 percent of the state minimum wage or the federal minimum wage, whichever is greater. It would apply to the employee’s first 680 hours. The federal minimum wage is currently $7.25 an hour.

The bill’s sponsor, Rep. Cary Condotta (R-East Wenatchee), told the House Committee on Labor and Workforce the program would help get teens back into the workforce and off the street.

“I believe it is reasonable. I want a solution to this problem because it has gotten very serious,” Condotta said.

Grant County Prosecuting Attorney Angus Lee agreed, telling committee members the program would help solve the gang problems he sees everyday in his community.

“It benefits people who need a chance,” he said. “I look at it as somebody who cares about my community. This is a bill about saving lives.”

Opponents of the bill say the law would hurt working families who depend on the state’s minimum wage to get by.

“These working families are barely hanging on. I’ve heard of training wheels and training pants but I’ve never heard of a training wage,” said Pamela Crone, a lobbyist with Legal Voice.

Teresa Mosqueda with the Washington State Labor Council called the proposal a “poverty creation bill.”

“This is about all workers and this is taking money off the kitchen table,” she said.

Erin Shannon with the Washington Policy Center told lawmakers the state has one of the highest teen unemployment rates in the country at 28 percent. Shannon said employers need an economic incentive to take a gamble on young workers.

Those feelings were echoed by Pam Pellegrino, owner of Pellegrino’s Italian Kitchen in Olympia.

“When we go to hire to fill a position, at this point we don’t look for teenagers. We can’t invest the time at the minimum wage to train them,” she said.

The committee took no action on the bill Tuesday.

Stephen Lerch

Washington economists forecast an increase in state revenue in the current budget cycle, as well as the two that follow.

The state can expect to collect about $30.5 billion in the current two-year budget cycle, which is $29 million more than June’s forecast, the Economic and Revenue Forecast Council announced today in its quarterly forecast. The 2011-2013 biennium ends in July 2013.

The council’s executive director, Stephen Lerch, said there’s been positive growth in housing and auto sales. On the downside, exports are declining and job growth has been “very very slow,” Lerch said.

Consumers are paying down big chunks of debt, but that means they aren’t going out and making new purchases — which is something to “watch for,” given the state’s reliance on sales tax, Lerch said.

Liquor sales have jumped widely since stores were privatized in June. In May, liquor stores saw a 27 percent spike in sales as restaurants and consumers stocked up. Sales dropped steeply in June, then rebounded in July. Lerch said he’s raised the forecast on revenue from liquor, but it’s “hard to say where the trend is going on liquor sales.”

Budget director Stan Marshburn said the state is still expecting a $500 million shortfall in the current biennium. “This forecast changes it by $50 million, so the problem remains about the same,” he said.

As for 2013-2015, economists are forecasting revenue of about $32.6 billion, which is $23 million more than expected.

For the first time, economists also looked at the 2015-2017 biennium and expect the state will be able to collect $35.5 billion — an 8.8 percent increase.

Watch the full meeting below:

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Washington’s unemployment rate rose to 8.6 percent in August, up from 8.5 percent in July, the state Employment Security Department said today. The state saw a net loss of about 1,100 jobs.

The good news is that construction jobs are on the rise — the industry added 1,900 jobs in August, the most of any sector.

“This is consistent with what we’re seeing in home construction,” said chief labor economist Joe Elling. Seattle in particular has seen “really good growth” of multi-family units, Elling said, and the construction of single-family homes is up 19 percent across the state.

Still, numbers remain far below what they were at the peak in 2007, when Washington had about 208,000 construction jobs. Today, the construction industry employs about 140,000 workers.  “We have a long ways to go to get construction back to a more healthy level,” Elling said.

The state saw “unusually large losses” in the hospitality and leisure sector, which lost 2,300 jobs in August. Retail and wholesalers also saw a big drop. Elling said retail typically sees a boost in August, but that didn’t occur this time. He cautioned against reading too much into the month-to-month numbers.

The rate remains lower than a year ago. In August 2011, unemployment was at 9.2 percent.

More economic news is coming today.

At 2:30 p.m., the Economic and Revenue Forecast Council will release the quarterly revenue forecast. If trends hold from an economic update released earlier this month, the state may be bringing in more revenue than expected.

The meeting will be aired live on TVW, and we’ll also have updates here on the blog.

The Economic Review and Forecast Council released an update on the state’s economy today, providing a preview to the quarterly revenue report that will come out later this month.

The news was cautiously optimistic: Revenue is about $22 million higher than expected since the last forecast in June.

Growth has been a “bit stronger” than expected — the state has added 10,300 jobs in the last two months, which is 3,500 better than economists had predicted. Still, uncertainty remains “very high,” interim director Stephen Lerch said.

On the downside, rising rents in Seattle are driving up inflation faster than the national average. Rents in Seattle have risen 3.9 percent over the last year, compared to 2.2 percent for the rest of the nation.

The council also formally voted to hire Lerch to be the new director of the council at today’s meeting, a move that was announced earlier this week.

Full video of the meeting below:

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The Economic and Revenue Forecast Council said Friday they’ll make Stephen Lerch the permanent executive director, replacing Arun Raha. Lerch has been serving as the interim director since Raha left for the private sector.

Stephen Lerch

As the state’s chief economist and forecaster, Lerch will be responsible for predicting how much revenue money the state will bring in. The governor and state Legislature use the quarterly forecasts as a blueprint for writing the budget.

The council launched a national search for a new director after Raha resigned in January. At the time, the council estimated the process could take six or seven months.

In a press release, council chair Rep. Ed Orcutt said Lerch “was the top pick out of several highly qualified candidates from around the country and around the world.”

Lerch holds a PhD in economics from John Hopkins University. He was the research director for the Washington State Investment Board before coming to the council, where he has twice served as the interim director during candidate searches.

The council said it will vote for Lerch at the next economic review meeting on Sept. 6th. Read the full announcement.

Legislative changes adopted this year are expected to add a modest $156 million to the state’s coffers, according to the latest economic forecast report released Wednesday.

New tax laws and fund transfers are expected to increase revenue by about $172 million through June 2013. That number was reduced by about $16 million because of weak economic conditions — leaving a net gain of about $156 million.

The report noted that there’s lots of outside risks at play that could affect revenue — the debt crisis in Europe, for example, and uncertainty in oil-producing countries. Read the full report by the Washington State Economic and Revenue Forecast Council here.

Gov. Chris Gregoire said she welcomed the news after a series of downward projections.

“The economy is slowly recovering, but is not yet stabilized. Our priority has been and will continue to be to put people back to work and get the economy on its feet,” Gregoire said.

But council chair Rep. Ed Orcutt, R-Kalama, said the small improvement was mostly a result of the Legislature moving money out of dedicated accounts, rather than job creation.

“We’ve kind of flatlined. We’re not any worse off than the previous revenue forecast, but we’re not in better shape either,” Orcutt said.

Orcutt and Democratic Rep. Ross Hunter, who also sits on the council, talked more about the significance of the revenue forecast on this week’s edition of The Impact. Watch it below: